Sunrise beckons, turn from sunset: Aim for high-end services, manufacture–the economic times

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Writing on this page on Thursday, NITI Aayog CEO Amitabh Kant identified some sunrise sectors for Indian industry: high-performance batteries for electric vehicles, green hydrogen, artificial intelligence, genomics, the 5G telecom ecosystem. This is a welcome departure from the thinking that has brought out the production-linked incentive scheme, which sets aside ₹1,45,000 crore over several years as a subsidy for increased production in 10 sectors, ranging from automotive components and textiles to pharmaceuticals and information technology products, in the hope that this would trigger large-scale investment and job creation, along with exports. What is striking about this list of 10 sectors being promoted is missing discrimination between sunrise and sunset sectors.
Any kind of value addition is better than no value addition. That said, more value is created in one hour at an automobile component factory than in an hour spent on collecting tendu leaves in the forest. Writing computer code for an hour produces even more value. Designing a new molecule or dreaming up a new building architecture is higher up on the scale. Value addition in creative services, including service-intensive manufacture such as forging a microprocessor with three-nanometer circuits, tends to be higher than in conventional manufacturing. Given the size advantage India has in its young, college-going cohort that can be trained in assorted science, technology, engineering, mathematics and creative disciplines, India has an advantage in the value-addition opportunities of tomorrow. Spending budgetary resources as incentives for, and directing private resources towards, sunset sectors is to waste a huge opportunity for India to make good on industries of the future.

These would include, apart from those mentioned by Kant, quantum computing and communications, new materials and nanotechnology, the entire range of synthetic biology and bioinformatics, and advanced nuclear and space technologies. Policymakers and industry must raise their levels of ambition.

This piece appeared as an editorial opinion in the print edition of The Economic Times.


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