Lok Sabha Question No. 1632 (UNSTARRED), answered on 2016-03-08
Subject: Assessment of Industrial Sector
Ministry: HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
Asked by: PASHUPATI NATH SINGH

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

## LOK SABHA UNSTARRED QUESTION NO.1632 TO BE ANSWERED ON 08.03.2016

## Assessment of Industrial Sector

## 1632. SHRI PASHUPATI NATH SINGH:

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

- (a) whether the Government has made any assessment for development and growth of the Capital Goods, auto and electrical equipment sectors in the country during the last three years and if so, the details thereof;
- (b) whether the Government has formulated any policy to encourage development and growth of the said sectors in the country; and
- (c) if so, the details thereof ?

## ANSWER

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

(a): The capital goods sector has grown at a rate of 1.1% per annum over the last 3 years. The value of production, import & export of select sub sectors of capital goods  during the year 201415 and 5 year Compounded Annual Growth Rate (CAGR) are indicated below:

(Rs. in crore)

Export

| Sub Sector of CapitalGoods                       | Production (5 year CAGR)   | Import (5year CAGR)   | Export (5 year CAGR)   |
|--------------------------------------------------|----------------------------|-----------------------|------------------------|
| Machine Tools                                    | 4,230 (l1.2%)              | 5318 (1.9%)           | 28l (18.2%)            |
| Textile Machinery                                | 6,960 (10.4%)              | 7,814 (16%)           | 2,466 (34.7%)          |
| Earthmoving &MiningMachinery Machinery Machinery | I 7,000 (0.6%)             | 12,056 (16.4%)        | 7,385 (55.3%)          |
| Heavy Electrical Equipment                       | 1,36953 (6.6%)             | 55,987 (6.4%)         | 35,418 (14%)           |
| PlasticMachinery Equipment                       | 2,950 (9.6%)               | 1,350 (10.7%)         | 680 (11.6%)            |
| Process PlantEquipment Equipment                 | 18,900 (3.4%)              | 12,933 (120.9%)       | 7,684 (23.3%)          |
| Dies, Moulds &Press Tools &Press Tools Tools     | 14,647 (5.1%)              | 3,322 (-2.4%)         | 2,869 (-3.8%)          |
| Metallurgical Machinery Machinery                | 1,260 (5.0%)               | 2,593 (-4.4%)         | 1,103 (20.1%)          |
| Printing Machinery                               | 14,453 (14.4%)             | 6,38l (12.2%)         | 1,255 (13.9%)          |
| Food Processing Machinery                        | 12,180 (6.2%)              | 5,500 (5.5%)          | 2,080 (15.8%)          |
|                                                  | 229,533 (6.2%)             | 113,254 (9.8%)        | 61,221 (16.5%)         |

(Source: National Capital Good Policy 2016)

For Automobile Sector the Industry turnover for 2013- 14 and 2014- 15 (including both domestic sales and export figures) are Rs.3,55,442 crore and Rs.3,83,730 crore respectively. For Automobile component  the  Industry  turnover  for  2013-  14  and  2014-  15  are  Rs.  2,11,700  crore  and Rs.2,34,800 crore respectively.

(b):  Yes,  the  Government  has  announced  a  National  Policy  for  development  and  growth  of  the Capital Goods Sector .

For Indian  Electrical  Equipment  Industry the  Government  has  prepared  Indian  Electrical Equipment Industry Mission Plan 2012-2022 which was launched on 24.07.2013 seeking to steer, coordinate and synergize the efforts of all stake holders to accelerate and sustain the growth of the domestic electrical equipment industry.

For Automobile  Sector the  Government  prepared  Automotive  Mission  Plan    (AMP)  i.e.  AMP 2006-16. This will be followed by AMP 2016-26.

## (c): National Policy on Capital Goods Sector

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   striving for boosting the  CG  sector  by  providing  for  an  enabling  ecosystem  for  capital  goods  growth  and  ensuring sustained  incentive  for  domestic  manufacturers  to  manufacture  competitive  machinery  to  meet domestic as well as export market demand.

Key policy recommendations include strengthening the existing capital goods scheme launched by the  Department  in  November,  2014  with  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  Centre  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.   Details of the Policy is available in the website of the Department of Heavy Industry (dhi.nic.in)

## Policy related to Electrical Equipment Sector :

The vision 2022 articulated in the Indian Electrical Equipment Industry Mission Plan 20122022 for  Electrical  Equipment  Sector  is  to  make  India  the  country  of  choice  for  production  of electrical equipment and reach an output of USD 100 Billion by balancing exports and imports. The Mission Plan identifies five key areas for action (i) industry competitiveness; (ii) technology upgradation (iii) skills development (iv) exports and (v) conversion of latent demand.

Against each area of concern, detailed recommendations have been given for strategic and policy interventions by different stake holders, including the Government and the industry.  Details of the Mission  Plan  2012-  2022  is  available  in  the  website  of  the  Department  of  Heavy  Industry (dhi.nic.in)

Post launch of the Mission Plan two Inter-Ministerial Groups (IMG) have been set up to formulate a cogent and common approach to deal with the various recommended interventions under the key areas.

## Policy and schemes related to Auto sector:

Automotive Mission Plan (AMP) 2006-16 had the vision for Indian automotive sector  to emerge as  the  destination  of  choice  in  the  world  of  design  and  manufacture  of  automobiles    and  auto components with output reaching a level of US$ 145 billion accounting for more than 10% GDP, and providing employment to 25 million people by 2016.  During the operative period of AMP 2006-16,  the  country  witnessed  a    substantive    progress  in  the  automotive  sector      with  major global Original Equipment   Manufacturers (OEM)s setting their manufacturing units in India and filling the market with a variety of vehicles. During the period investment exceeded Rs.1,60,000 crore in the automobile  sector. India established as a global small car manufacturing hub. Details of  the  AMP  2006-  2016  is  available  in  the  website  of  the  Department  of  Heavy  Industry (dhi.nic.in)

AMP 2016-26 : The Mission Plan - AMP 2016-26 has been formulated with a view to continue the endeavour envisaged in AMP 2006-16.  The vision of AMP 2026 is that the Indian automotive industry  will  be  among  the  top  three  in  the  world  in  engineering,  manufacture  and  export  of vehicles and components and will encompass safe, efficient and environment friendly conditions for affordable  mobility of people and transportation of goods comparable with global standards. AMP 2026 envisages growth in auto sector in value exceeding 12% of India's GDP and generating an additional 65 million jobs.

The salient features of AMP 2026 are :

- (a) The Indian automotive industry to be a top job creator- 65 million additional jobs .
- (b) The Indian automotive industry to be the prime mover of manufacturing sector and 'Make in India' Programme.
- (c) Automotive industry aims to increase exports of vehicles by 5 times and components  by 7.5 times.
- (d) Specific  interventions  are  envisaged  to  sustain  and  improve  manufacturing  competitiveness and to address challenges of environment and safety.

The AMP 2016-26 is ready to be launched shortly.

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