The past two years have indisputably been a learning curve for businesses across verticals. With the pandemic causing tectonic shifts in the way the world works, businesses, particularly startups, have evolved and adapted to the fast-changing scenario. While some sectors were impacted heavily, especially at the outset, some have thrived in the market even amid cut-throat competition through innovation, realigning their approaches, and ultimately delivering substantial returns to their investors.
Although most of the progress and growth businesses have achieved have been through their unique strategies, one cannot deny that ample support from the government also plays an integral role.
The Union Budget 2022-2023 is on the horizon, with the Finance Minister Nirmala Sitharaman presenting it on 1 February 2022. With the ongoing third wave of the pandemic, businesses across verticals eagerly await this year’s Budget, expecting it to play a supporting role in facilitating their respective industries’ sustained growth and progress. On that note, here are five key sectors that are bound to benefit from this year’s budget.
Government must allocate more funds to agriculture, prioritise MSP
It’s a well-known fact that India is predominantly an agrarian economy, with agriculture being the chief source of livelihood for approximately 57 percent of the population. However, as opposed to other sectors, agriculture has been relatively slow in technology adoption and progress until recently. Over the last few years, the scenario has changed with the emergence of agritech companies looking to blend technology into farming, improve farmers’ livelihoods, and enhance the quality of produce.
Budget 2022 will see the sector having clear-cut expectations from the government, including the allocation of more funds and the prioritization of MSPs (Minimum Support Price), amongst others. It’s expected that the government will focus on bolstering the industry through increased investment in infrastructure and a greater degree of support for emerging agritech platforms and farmers, especially considering the recent amendments in farm laws.
Provide tax benefits for infra sector
Although infra is one of the few sectors that may never lose its demand completely, it’s an industry that was significantly impacted by the pandemic. As it gradually makes a recovery, this year’s Budget will see the government push the fiscal pedal more to support the sector, allowing players, especially emerging ones, to revive the business. It’s expected that the government will provide tax benefits and relaxations to aid the industry’s recovery.
Increase investment in EV infra
A sector that was at the forefront of being impacted by the global health crisis, the automobile industry has made a steady recovery post-the first and second waves. As consumers and automobile players become more environment-conscious alongside the government’s incentives for electric vehicles (EVs) to promote the segment, EVs have seen a steady increase in adoption. However, the segment continues to face certain challenges, such as the lack of robust infrastructure, resulting in a slow shift. With the prime minister speaking of net-zero carbon emissions by 2070 at the 2021 United Nations Climate Change Conference in Glasgow, the adoption of EVs will be critical to help turn this into reality. This year, it’s expected that the Budget will focus on increasing the investment in EV infrastructure to create a conducive environment that will fuel greater adoption of EVs across the country.
Healthcare requires significant reforms
The global pandemic put a heavy strain on the healthcare system, not just in India but across the globe, and underscored the significance of robust, efficient, and resilient healthcare infrastructure. Union Budget 2022-2023 is bound to focus primarily on bolstering healthcare infrastructure, particularly amidst the third wave of the pandemic. The Indian healthcare industry will be expecting significant reforms and ramping up of infrastructure such as additional critical care units and well-equipped hospital beds, testing centers in tier-II and tier-III cities as well as rural areas, and most importantly, increased digitisation, technology adoption, and R&D investments.
Increase capital allocation for startups
India’s startup ecosystem, the third-largest segment, has perhaps proven to be the most innovative with high potential for growth. Although it was impacted by the crisis, the startup community has managed to revive business quickly, raise substantial capital from both Indian and foreign investors, and grow. The ecosystem will now look to the government to provide support and incentives to fuel further progress. Startups are crucial to boosting economic growth, especially in the current scenario, and the ecosystem is hoping that the government will increase the budget allocation for startups to help drive growth.
Bottomline
This year’s Budget will hold special relevance for businesses across verticals as it will determine how the foreseeable future will take shape and whether a complete economic recovery is on the horizon. But to be certain, we will have to wait and watch.
The author is Partner, Burgeon Law. Views are personal.
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