Lok Sabha Question No. 1810 (UNSTARRED), answered on 2016-03-08
Subject: National Capital Goods Policy
Ministry: HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
Asked by: SHIVAJI ADHALRAO PATIL, Shrirang Appa Barne, DHARMENDRA YADAV, ANANDRAO  ADSUL

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

## LOK SABHA UNSTARRED QUESTION NO.1810 TO BE ANSWERED ON 08.03.2016

## National Capital Goods Policy

1810.   SHRI ADHALRAO PATIL SHIVAJIRAO:

SHRI SHRIRANG APPA BARNE:

SHRI DHARMENDRA YADAV:

SHRI ANANDRAO ADSUL:

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

- (a)  whether  the  Government  has  decided  to  turn  the  country  into  a  world  class  hub  for  capital goods and if so, the details thereof;
- (b) whether the Government has introduced a National Capital Goods policy to spur capital goods sector under Make in India initiative, if so, the salient features of the aforesaid policy;
- (c) whether there are some key issues such as availability of finance, raw material, innovation and technology,  productivity,  quality  and  environment  friendly  manufacturing  practices,  promoting exports and creating domestic demand;
- (d) if so, the steps taken by the Union Government to address these key issues;
- (e)  whether  the  Government  is  considering  to  introduce  a  Technology  Development  Fund, upgrading the existing and setting up a new testing and certification facility; and
- (f) if so, the details thereof?

## ANSWER

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

(a) and (b):  The Government has launched an integrated capital goods policy for overall redressal of  issues,  challenges  and  also  to  take  benefit  of  'Make  in  India'  opportunities.  The  Policy  is formulated with the vision to increase the share of capital goods contribution from present 12% to 20|% of total manufacturing activity by 2025.  National Capital Goods Policy envisages   to strive for  boosting  the CG sector by providing for an enabling ecosystem for capital goods growth and ensuring  sustained  incentive  for  domestic  manufacturers  to  service  domestic  as  well  as  export market demand

A soft copy of the National Policy on Capital  Goods  has been uploaded in the Department of Heavy Industry website ( www.dhi.nic.in ).

- (c):  The following key issues impacting Indian Capital Goods industry have been identified:
- (i) Issues  affecting  domestic  demand  creation  and  expansion  which  include  capacity under utilisation, public procurement policy, import of second hand machinery, zero duty import under project import.

(ii) Issues affecting technology depth which include significant technology gaps, lack of scheme availability, inadequate support infrastructure, inadequate fiscal incentive, need to improve Indian standards.

(iii) Issues affecting cost competitiveness which include cost disabilities due to   tax and duty structure, distortions, in duty structure and higher infrastructure and logistics costs.

- (iv) Issues related to sub-scale units which include limited ability of MSMEs to develop new products and processes, low awareness of standards and inadequate access to capital.

(d):  A  Scheme  for  'enhancement  of  competitiveness  in  the  Indian  Capital  Goods  Sector'  was launched by the Department of Heavy Industry on 5 th November, 2014. Key policy recommendations include strengthening this Scheme already containing components like Centre of Excellence for technology development, Common Engineering Facility Centre etc. by increasing its scope and budgetary allocation, launching of a Technology Development Fund, Creation of a 'Start up Center' for Capital Goods Sector, Mandatory Standardization, Upgrading development, testing and  certification infrastructure,  skill  development,  providing  scheme  for  increasing enhancement through a cluster approach, to modernize the existing Capital Goods manufacturing units and to create an enabling scheme a   pilot for Heavy Industry Export & Market Development Assistance Scheme.

(e)  and (f):    The policy  has recommended launching of 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. The Policy also envisages  upgradation  of  testing  and  certification  facilities  such  as  Central  Power  Research Institute  (CPRI)  and  setting  up  of  10  more  CMTI  like  institutions  to  meet  the  requirements  of different sub- sectors of Capital Goods.

***************