The Union government on Thursday proposed the creation of a corpus of Rs 1 lakh crore to boost private sector investment in sunrise industries.

“For our tech-savvy youth, this will be a golden era. A corpus of Rs 1 lakh crore will be established with a 50-year interest-free loan.

“The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates,” finance minister Nirmala Sitharaman said while presenting the interim budget.

“This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology,” Sitharaman said.

A new scheme would be launched to strengthen deep-tech technologies for defence purposes.

Sitharaman has also extended the tax holiday for start-ups till March 31, 2025. Under section 80-IAC, eligible start-ups could claim a deduction of 100 per cent of their profits and gains if they are incorporated after April 1, 2016, but before April 1, 2024. The end date has now been extended by one year.

“The extension of tax exemption for startup and sovereign wealth funds until March 2025 is a welcome move, fostering a conducive environment for entrepreneurial growth.

“Moreover, the emphasis on deep-tech investments, particularly in the defence sector, aligns with our vision for innovation and technological advancement.”

“The budget’s commitment to supporting R&D and innovation in India with the announcement of a Rs 1 lakh crore corpus for long-term financing in sunrise sectors and a holistic scheme for the bio-pharmaceuticals sector demonstrates a proactive stance towards fostering sustainable growth,” said Karthik Reddy, founder and managing partner, Blume Ventures and chairperson IVCA.

“The allocation of Rs 1 lakh crore for long-term funding, along with interest-free 50-year loans, for new age technology, sunrise domains and deep tech in defence could stimulate entrepreneur interest in these segments.

“This corpus will help reduce entrepreneurs’ reliance on high-cost equity funding while building investor confidence and conventional lender comfort,” said Rahul Guha, director, Crisil Ratings.