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Government unveils first-ever national Capital goods policy

16 Feb 2016 Evaluate

Addressing the need of the Capital Goods sector, the government has unveiled the first-ever policy for the country's capital goods sector which envisions increasing the share of capital goods in total manufacturing activity from 12 per cent at present to 20 per cent by 2025. The policy envisages increasing exports from the current 27% to 40% of production while increasing share of domestic production in India's demand from 60% to 80%, thus making India a net exporter of capital goods. The policy also aims to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs.

Union Minister of Heavy Industry and Public Enterprises Shri Anant Ganga Ram Geete said that realising the strategic importance of Capital Goods and the pivotal role played by it in the overall manufacturing, as the pillar of strength to the vision of “Make in India”, the government has now come out with this policy. He added that this is a  first time ever policy of this sector, with a clear objective of increasing production of capital goods from around Rs 230,000 crore in 2014-15 to Rs 750,000 Crore in 2025 and raising direct and indirect employment from the current 8.4 million to around 30 million.

The Department of Heavy Industry had set up a Joint Taskforce with Confederation of Indian industry (CII) as an attempt to ensure that the formulation of the Capital Goods Policy is done in the most democratic manner and the recommendations would carve out a roadmap for Capital Goods sector to become a part of global value chains apart from mere supply chains.

The policy has been framed after extensive stakeholders’ consultations with industry, academia, different ministries etc. Earlier, the government had put out the draft national capital goods policy, seeking comments and suggestions on the various proposals. The aim of the policy is to create game changing strategies for the capital goods sector. Some of the key issues addressed include availability of Finance, Raw Material, Innovation and Technology, Productivity, Quality and Environment Friendly Manufacturing Practices, Promoting Exports and Creating Domestic Demand. Key policy recommendations include strengthening the existing scheme of the DHI on enhancement of competitiveness of Capital Goods Sector by increasing budgetary allocation for increasing scope to further boost global competitiveness in various sub sectors of CG.

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