Lok Sabha Question No. 801 (UNSTARRED), answered on 2016-04-28
Subject: Shipbuilding Subsidy Scheme
Ministry: SHIPPING
Asked by: NAGARAJAN P., CHANDRAKANT RAGHUNATH PATIL

801. SHRI P. NAGARAJAN: SHRI C.R. PATIL:

Will the Minister of SHIPPING be pleased to state:

- (a) whether the shipbuilding subsidy scheme has been discontinued in the country and if so, the details thereof along with the reasons therefor;
- (c) whether the Government proposes to start any new facility for shipbuilding in the country and if so, the details thereof along with the locations/ports identified for the purpose;
- (b) the target set and achieved for shipbuilding in the country during the 11th Five Year Plan (FYP) period;
- (d) whether the Government proposes to restore the said subsidy scheme to encourage shipbuilding industry in the country and make it more competitive in the global market; and

## ANSWER

- (e) if so, the details thereof and if not, the other measures taken/being taken by the Government in this regard?

## MINISTER OF STATE IN THE MINISTRY OF SHIPPING (SHRI PON RADHAKRISHNAN)

- (a) The shipbuilding subsidy scheme expired on 14 th August 2007. The Government decided in February 2009 to release subsidy for eligible shipbuilding contracts signed upto August 14, 2007 and, accordingly, budgetary provision was approved for the period 2008-09 to 2013-14.
- (b) As per Para 1.17 of the report of Working Group for Shipbuilding and Ship Repair Industry for the Eleventh Five Year Plan (2007-12), shipbuilding delivery of 2.50 million DWT worth  USD  2.5  billion  had  been  projected.  As  per  'STATISTICS  OF  INDIA'S SHIPBUILDING AND SHIP REPAIRING INDUSTRY' issued by Ministry of Shipping, Indian  Shipbuilding  industry  was  able  to  deliver  approximately  1.7292  million  DWT during this period.
- (c) No, Madam.
- (d)&(e):Request for extension of timelines for the previous shipbuilding scheme has been received from the industry. In the mean time, Government of India has approved a new Shipbuilding Financial Assistance Policy for Indian Shipyards to provide them a level playing field visà-vis foreign shipyards. Financial assistance @20% of the 'Contract Price' or the 'Fair

## GOVERNMENT OF INDIA MINISTRY OF SHIPPING

## LOK SABHA UNSTARRED QUESTION NO.801

## TO BE ANSWERED ON 28 TH APRIL, 2016 SHIPBUILDING SUBSIDY SCHEME

Price'  as  determined  by  international  valuers,  whichever  is  lower,  is  to  be  granted  to shipyards  for  shipbuilding  contracts  signed during  April  1,  2016  to  March  31,  2026 including the said dates. The 20% financial assistance would be provided for ten years reducing @3% every 3 years.

Further, the  Government of  India  has  taken  following  major  steps to  encourage  Indian shipbuilding industry:

-  Institutional Mechanism on Infrastructure in its 10 th meeting held on December 21, 2015  has  recommended  grant  of  'infrastructure  status'  to  stand  alone  shipyards. Infrastructure status would enable Indian shipyards to avail cheaper long-term source of capital to Indian shipyards. The attendant tax benefits would enable the shipyards to reduce their cost disadvantage and invest in capacity expansion thereby giving a boost to the Indian shipbuilding industry.
-  Procedure  for  procuring  goods  at  concessional/NIL  rate  of  Central  Excise  and Customs  duty  for  the  Ship  Building  and  Ship  repair  has  been  considerably streamlined.
-  Exemption on Customs and Central Excise duty on inputs used in shipbuilding vide Notification Nos. 54/2015-Customs, 55/2015-Customs, 44/2015-Central Excise and 45/2015-Central Excise all dated November 24, 2015. Central Excise duty exemption on inputs used in ship repair of ocean going vessels has been granted in the Union Budget 2016-2017.
-  All government departments or agencies including CPSUs have to provide Right of First  Refusal  to  Indian  shipyards  while  procuring  or  repairing  vessels  which  are utilized for governmental or own purpose.

*****