Capital Goods Sector Policy Approved


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

The Government of India in May 2016 approved the first-ever policy for the capital goods sector (CGS) in the country.

The policy will help in realising the vision of ‘Building India as the World class hub for Capital Goods’. It will also play a pivotal role in overall manufacturing as the pillar of strength to the vision of ‘Make in India.

The aim is to enhance the export of Indian made capital goods through  a 'Heavy Industry Export & Market Development Assistance Scheme (HIEMDA)'. Launching a Technology Development Fund , upgrading the existing and setting up new testing & certification facilities, making standards mandatory in order to reduce sub-standard machine imports are other measures envisaged.
 
It also aims to provide opportunity to local manufacturing units by utilising their installed capacity and launching scheme of skill development for CG sector.
 
The policy also aims to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs.
 
The aim of the policy is create game changing strategies for the capital goods sector. Some of the key issues addressed include availability of finance, raw material, innovation and technology, productivity, quality and environment friendly manufacturing practices, promoting exports and creating domestic demand. 
 
Objectives

The following objectives of the policy will be met by the Department of Heavy Industry in a time-bound manner through obtaining approval for schemes as per the roadmap of policy interventions-
- To triple the value of production of these goods from Rs.2,30,000 crore in 2014-15 to Rs.7.5 lakh crore by 2025 and create more than 21 million jobs.

- The policy envisions increasing the share of capital goods in total manufacturing activity from 12 per cent at present to 20 per cent by 2025.

- To increase exports to 40 per cent of production from the present 27 per cent.

- The share of domestic production in India’s demand to be increased from 60 per cent to 80 per cent, making India a net exporter of capital goods.

Raising direct and indirect employment from the current 8.4 million to 30 million.  The policy aims to increase direct domestic employment from the current 1.4 million to at least 5 million and indirect employment from the current 7 million to 25 million by 2025, thus providing additional employment to over 21 million people.

- To create an ecosystem for globally competitive capital goods sector, the policy recommends devising a long-term, stable and rationalised tax and duty structure. It also advocates adoption of a uniform Goods and Services Tax (GST) regime ensuring effective GST rate across all capital goods sub-sectors competitive with import duty after set-off with a view to ensure a level-playing field.


Monday, 30th May 2016, 12:09:53 AM

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