Lok Sabha Question No. 4179 (UNSTARRED), answered on 2017-03-28
Subject: Capital Goods Policy
Ministry: HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
Asked by: POONAMBEN HEMATBHAI MAADAM

## GOVERNMENT OF INDIA MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES DEPARTMENT OF HEAVY INDUSTRY

## LOK SABHA UNSTARRED QUESTION NO.4179 TO BE ANSWERED ON 28.03.2017

## Capital Goods Policy

## 4179. SHRIMATI POONAMBEN MAADAM:

Will the Minister of HEAVY INDUSTRIES AND PUBLIC ENTERPRISES be pleased to state:

- (a) whether the Government has recently launched a National Capital Goods Policy and if so, the salient features of the Policy;
- (b)  the  manner  in  which  the  Policy  is  likely  to  boost  the  manufacturing  sector  which  is  not performing well in the recent past as expected; and
- (c) the number of jobs likely to be created in the coming five years as a result of the said policy?

## ANSWER

## MINISTER OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES (SHRI ANANT G. GEETE)

(a): Yes Madam.

A National Capital Goods Policy has been launched in 2016 with a view to increase the share of capital  goods  contribution  from  12%  to  20%  of  total  manufacturing  activity  by  the  year 2025.The policy aims to make India one of the top capital goods producing nations of the world by  raising  the  total  production  and  exports  level  significantly.  The  Policy  also  envisages improving technology depth of the Indian Capital Goods to reach advanced level.

Major recommendations of the National Capital Goods Policy are:

- (1) Make  in  India  initiative: To  integrate  major  capital  goods  sub-sectors  like  machine tools,  textile  machinery,  earthmoving,  construction  and  mining  machinery,  heavy  electrical equipment, plastic machinery, process plant equipment, etc as priority sectors to be envisaged under 'Make in India' initiative.
- (2) To  create  an  enabling  scheme  as  a  pilot  for 'Heavy  Industry  Export  &  Market Development  Assistance  Scheme  (HIEMDA)' with  a  view  to  enhance  the  export  of  Indian made capital goods along with a branding plan for capital goods.
- (3) Strengthen  existing  capital  goods  scheme :  The  policy  recommends  increasing  the budgetary  allocation  &  scope  of  the  present  'Scheme  on  Enhancement  of  Competitiveness  of Capital Goods' by  adding a set of components including technology, skills & capacity building, user promotional activities, green engineering and energy, advanced manufacturing and cluster development

- (4) To  launch  a  Technology  Development  Fund under  PPP  model  to  fund  technology acquisition,  transfer  of  technology,  purchase  of  IPRs,  designs  &  drawings  as  well  as  for commercialization of such technologies of capital goods.
- (5) To  create  a  'Start-up  Center  for  Capital  Goods  Sector' shared  by  DHI  and  CG industry/  industry  association  in  80:20  ratio  to  provide  an  array  of  technical,  business  and financial  support  resources  and  services  to  promising  start-ups  in  both  the  manufacturing  and services space with focus on   Pre-incubation, Incubation and Post-Incubation phases of a startup's growth.
- (6) Mandatory Standardization which  includes,  inter  alia,  defining  minimum  acceptable standards for the industry and adoption of International Organization for Standardization (ISO) standards  in  the  absence  of  other  standards,  to  institute  formal  development  program  for promoting and framing Standards with Standards Developing Organizations (SDOs) including Bureau of Indian Standards (BIS), international standard bodies, test / research institutions and concerned industry/ industry associations.
- (7) To  upgrade  development,  testing  and  certification  infrastructure such  as  Central Power  Research  Institute  (CPRI),  and  set  up  10  more  CMTI  like  institutes  to  meet  the requirements of all sub-sectors of capital goods.
- (8) Skill  development: To  develop  a  comprehensive skill  development  plan/  scheme  with Capital Goods Skill Council and to upgrade existing training centers and set up 5 regional Stateof-the-Art Greenfield Centers of Excellence for skill development of CG sector.
- (9) Cluster approach :- To provide schemes for enhancing competitiveness through a cluster approach,  especially  for  CG  manufacturing  SMEs  with  thrust  on  critical  components  of competitiveness such as Quality management, Plant maintenance management, Energy management, Cost management, Human Resource management and prevention of corrosion.
- (10) To  modernize  the  existing  CG  manufacturing  units ,  especially  SMEs  for  adopting modern, computer controlled and energy efficient machineries  on the basis of  capital subsidy to promote the manufacturing of quality product. Details of the National Capital Goods Policy are available at dhi.nic.in
8. (b): Capital Goods Sector is a capital intensive industry with long gestation period. Implementation of key recommendations of National Capital Goods Policy is likely to enhance technology depth, production and export and improve skill availability and standardization in the domestic capital goods sector. Since Capital Goods is considered as the mother industry for the manufacturing sector,  this  is  expected  to  have  a  positive  cascading  effect  on  the  performance indigenous manufacturing sector.
9. (c): The said Policy envisages an increase in direct domestic employment to 5 million by the year 2025.

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