In what could be termed as first step in the direction of ‘made in India’ concept announced by Prime Minister Narendra Modi, the government on Monday approved a Rs 930 crore scheme to enhance the competitiveness of the capital goods sector in order to boost the economy. The scheme on enhancement of competitiveness in the Indian capital goods sector which will be implemented in the 12th Plan period and spill over to the 13th Plan period, requires an estimated outlay of Rs 930.96 crore. However, the gross budgetary support (GBS) from the government for the scheme would be Rs 581.22 crore and the balance Rs 349.74 crore would be contributed by the stakeholder industries.
Further, the scheme would cover sub sectors like machine tools, textile machinery, construction and mining machinery, and process plant machinery. However, for the scheme to be implemented, issue of technological depth creation in the capital goods sector and creation of common industrial facility centres would have to be addressed.
The scheme basically has five components to be achieved including creation of advanced centres of excellence for R&D and technology development, integrated industrial infrastructure facilities or machine tool parks and setting up common engineering facility centre for textile machinery. It would also include testing and certification centre for earth moving machineries and setting up of a technology acquisition fund under the Technology Acquisition Fund Programme (TAFP) to help the capital goods industry to acquire and assimilate specific technologies.
Interestingly, the announcement of this scheme comes at a time when Prime Minister is keen to turn India into a manufacturing hub and would also give a fillip to capital goods production that contracted 3.8% in July this year. The sector however provides 9%-12% of the total manufacturing value added, while the consumption of capital goods constitutes a constant share of 17%-21% of the total gross domestic investment in the country.
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