Lok Sabha Question No. 3862 (UNSTARRED), answered on 2025-08-12
Subject: Challenges faced by Capital Goods Sector
Ministry: HEAVY INDUSTRIES
Asked by: Smt. Pratima Mondal

## GOVERNMENT OF INDIA MINISTRY OF HEAVY INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 3862

ANSWERED ON 12.08.2025

## CHALLENGES FACED BY CAPITAL GOODS SECTOR

## 3862.  SMT. PRATIMA MONDAL:

## Will the Minister of HEAVY INDUSTRIES be pleased to state:

(a) the manner in which the Government plan to address the challenges faced by the capital goods sector in terms of technology obsolescence, low capacity utilization and inadequate R&D investments;

(b) the support extended to Bharat Heavy Electricals Limited (BHEL) to diversify its product portfolio and improve its financial performance in a competitive market environment; and

(c)  the  manner  in  which  the  Government  assess  the  effectiveness  of  budget  allocations  and flagship  schemes in driving technological innovation, improving global competitiveness and fostering sustainable growth of heavy industries?

## ANSWER

## THE MINISTER OF STATE FOR HEAVY INDUSTRIES (SHRI BHUPATHIRAJU SRINIVASA VARMA)

(a): In order to encourage the technology development, research, innovation and to augment the  manufacturing  infrastructure  in  the  Capital  Goods  sector,  Ministry  of  Heavy  Industries (MHI) is implementing the Scheme for 'Enhancement of Competitiveness in the Indian Capital Goods Sector- Phase II' with a financial outlay of Rs. 1207 crores, budgetary support of Rs.975 crore and industry contribution of Rs.232 crores.  Under the Scheme, a total of 33 projects have been  approved.  These  33  projects  include  9  Centres  of  Excellence  (CoEs),  5  Common Engineering  Facility  Centres  (CEFCs),  7  Testing  and  Certification  Centres,  9  Industry Accelerators for Technology development and 3 projects for Creation of Qualification Packs (QPs) for skill level 6 and above.

(b): Bharat  Heavy  Electricals  Limited  (BHEL),  under  guidance  and  support  from  the Ministry of Heavy Industries (MHI), has strategized itself to reduce its reliance on thermal power sector by broadening its product offerings in new and emerging areas in the following sectors:

- (i) Coal Gasification:
-  Indigenously developed Pressurized Fluidized Bed Gasification (PFBG) technology
-  Formed  JV  with  Coal  India  Limited  (CIL)  i.e.  Bharat  Coal  Gasification  and Chemicals Limited (BCGCL) to develop a Coal-to-Ammonium Nitrate Plant.
-  Through strategic policy advocacy of MHI, BCGCL's Coal to Ammonium Nitrate Project identified by GoI for Viability Gap Funding (VGF) of INR 1,350 Crore.
- (ii) AUSC (Advanced Ultra Supercritical Technology): BHEL in association with IGCAR & NTPC has developed an indigenous Advance Ultra Super Critical (AUSC) technology with the substantial investment of ~Rs. 900 crores by Ministry of Heavy Industries.
- (iii) Establishment of strategic equipment and Li-ion battery (integration & testing)

- (iv) Augmentation of Testing and Certification Facilities, namely 'Test and Calibration Centre  at  BHEL  Bhopal';  'Test  Lab  for  SIL  and  HIL  Testing  Centre  at  BHEL, Hyderabad' and 'Test Lab for pumps at BHEL Hyderabad' under the Scheme for 'Enhancement of Competitiveness in the Indian Capital Goods Sector- Phase II'.
- (v) Regular review, monitoring and guidance in identified diversification areas such as
-  Transportation -  Vande  Bharat  trainsets,  Signaling  (Train  Collision  Avoidance System)
-  Defence - Upgraded SRGM, Air Defence Gun, Strategic Equipment.

(c): Every project sanctioned under the Scheme for 'Enhancement of Competitiveness in the Indian Capital Goods Sector' is screened by the Screening Committee and approved by the Apex Committee  for  its  relevance  and  effectiveness  in  driving  technological  innovation  and improving global competitiveness in the Capital Goods Sector.  In addition, a Project Review and Monitoring Committee (PRMC) has also been constituted for each of the project sanctioned under the Scheme.  The meetings of the PRMC are held periodically in order to review the progress of the project and effectiveness of the funds released by MHI for the project.

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