Lok Sabha Question No. 2295 (UNSTARRED), answered on 2021-03-08
Subject: Capital Goods Industries
Ministry: FINANCE
Asked by: S. Jagathrakshakan

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 2295

TO BE ANSWERED ON MARCH 8th, 2021

## CAPITAL GOODS INDUSTRIES

## 2295. SHRI S. JAGATHRAKSHAKAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether it is true that though consumer goods industries have shown the biggest expansion, capital goods industries are still in the contraction zone;
- (b) if so, the preventive measures taken by the Government to improve the situation;
- (c) whether it is also true that the actual fiscal impact on the Government's finances is significantly less than 15 per cent figure; and
- (d) if so, the counter measures taken by the Government in this regard?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

(a) to (d)  National Statistical Office, Ministry of Statistics and Programme Implementation releases data on Index of  Industrial  Production  (IIP),  including  use  based  classification  e.g.  capital  goods,  consumer  goods  etc.  on  a monthly basis. Use based classification (UBC) data for capital goods, consumer durables and consumer nondurables from April 2020 onwards are given below:

Table : Monthly growth rate (in per cent) of capital goods, consumer durables and consumer non-durables

| Months /UBC    |   Capital Goods |   Consumer Durables |   Consumer Non-Durables |
|----------------|-----------------|---------------------|-------------------------|
| April 2020     |           -92.7 |               -95.7 |                   -48.1 |
| May 2020       |           -65.9 |               -70.3 |                    -9.7 |
| June 2020      |           -37.4 |               -34.8 |                     6.9 |
| July 2020      |           -22.8 |               -23.7 |                     1.8 |
| August 2020    |           -14.4 |               -10.2 |                    -3   |
| September 2020 |            -1.2 |                 5.3 |                     2.4 |
| October 2020   |             3.5 |                18   |                     7.1 |
| November 2020  |            -7.4 |                -3.4 |                    -1.3 |
| December 2020* |             0.6 |                 4.9 |                     2   |

Source: MOSPI. *Quick Estimate.

The  Government  has  taken  several  measures  to  boost  the  industry  sector  which  includes  introduction  of production linked incentives to create manufacturing global champions in 13 sectors, commercialization of the mineral sector, labour reforms, change in the definition of MSMEs, collateral free automatic loans for businesses and  subordinate  debt  for  stressed  MSMEs,  relief  to  MUDRA-Shishu  loans,  and  Ease  of  Doing  Business  for businesses including MSMEs. The National Infrastructure Pipeline, change in rules to enable enhanced public procurement  from  Indian  companies  and  equity  infusion  through  MSME  fund  of  funds  will  also  impact  the industry sector positively.

The fiscal impact on the Government Finances, as measured in fiscal deficit terms, increased from Rs.7,96,337 Crore in BE 2020-21 to Rs.18,48,655 Crore in RE 2020-21.