Government has sought suggestions on a draft paper to frame policy on the capital goods industry, envisioning an increase in its contribution from 12 per cent at present to 20 per cent of the total manufacturing activity in the country by 2025. The “Draft Base Paper for National Policy on Capital Goods and Engineering” prepared by the Department of Heavy Industry points out that imports continue to address 35 to 40 percent of domestic demand with the proportion being significantly higher in “critical components” segment for each subsector.
The capital goods sector contributes 12% to the total manufacturing activity and 15% of the GDP, but this component in industrial production has lagged in recent years due to slow pace of domestic demand leading to growing dependence on imports and following slow growth in the world economy.
The draft paper has highlighted the fact that support facilities, technology development institutions and skilled man-power continue to lag behind global standards, even as cost disabilities such as higher cost of power, finance and infrastructure lead to higher operating cost.
The paper has asked suggestions to help implementing full-fledged scheme on “Enhancement of Competitiveness in the Indian capital goods sector” through enabling policies for technology transfer, up-gradation and innovation. It has set a mission to become one amongst top 10 capital goods producing nations of the world and raise exports to a significant level of at least 40% of total production.
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