National Capital Goods Policy
Objectives of National Capital Goods Policy:
- Increasing production of capital goods from ~Rs. 230,000 Cr in 2014-15 to Rs. 750,000 Cr in 2025 and
- Raising direct and indirect employment from the current 8.4 million to ~30 million
- The policy envisages increasing exports from the current 27% to 40% of production while increasing share of domestic production in India’s demand from 60% to 80%, thus making India a net exporter of capital goods.
- 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.
Vision: “Building India as the World class hub for Capital Goods”
- Key policy recommendations include strengthening the existing scheme of the DHI (Department of Heavy Industry) on “enhancement of competitiveness of Capital Goods Sector by increasing budgetary allocation” for increasing scope to further boost global competitiveness in various sub sectors of CG(Capital Goods).
- 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.
- Nine key policy actions are summarized below:
- Devising a long term, stable and rationalized tax and duty structure to ensure cost competitiveness of the sector
- Drafting a comprehensive public procurement policy with amended qualifying criteria and introducing special provisions in contracts for domestic value addition.
- Promoting development of new technology through indigenous sources.
- Providing Technology Upgrade Fund Support across all capital goods sub-sectors
- Creating a level playing field vis-à-vis imports by restricting imports of second hand machinery and mitigating duty disadvantages
- Supporting availability of short and long term of financing at competitive rates to capital goods manufacturers
- Enabling skill development by setting up sub-sector specific Skill Councils
- Enabling higher participation of India in standard creation and developing support system to improve compliance
- Developing manufacturing clusters with shared facilities especially for SMEs