CCEA approved the scheme titled Enhancement of Competitiveness of the Capital Goods Sector
CCEA approved the scheme titled Enhancement of Competitiveness of the Capital Goods Sector.
The Cabinet Committee on Economic Affairs (CCEA) on 15 September 2014 approved the scheme titled Enhancement of Competitiveness of the Capital Goods Sector.
This scheme aims to make the Indian capital goods sector globally competitive. It will mainly cover sectors such as machine tools, textile machinery, construction and mining machinery and process plant machinery.
The scheme will be implemented during the 12th Five Year Plan period and spill over to the 13th Plan with an estimated outlay of 930 crore rupees. The Gross Budgetary Support (GBS) from the government for the scheme will be 581.22 crore rupees and the balance 349.74 crore rupees will be contributed by the stakeholder industries.
Five components of the scheme to achieve the desired result:
1. Creation of Advanced Centres of Excellence for R&D and Technology Development with the help of National Centres of Excellence in Education and Technology such as the IIT Delhi, IIT Bombay, IIT Madras, IIT Kharagpur and the Central Manufacturing Technology Institute (CMTI) Bangalore.
2. Establishment of Machine Tool Parks for making the machine tool sector more competitive by providing an ecosystem for production. The park will be established by a Special Purpose Vehicle (SPV) formed by local industries, industry associations, financial institutions, Central or State Governments and R&D Institutions.
3. Setting up of a Common Engineering Facility Centre for Textile Machinery with active participation of the local industry and the industry association. This will also be established by a Special Purpose Vehicle (SPV).
4. Testing and Certification Centre for earth moving machineries. The setting up of Test and Certification Centre for Earthmoving Machinery will be done by the SPV specifically created by the Department of Heavy Industry with the approval of the Cabinet.
5. The creation of a Technology Acquisition Fund under the Technology Acquisition Fund Programme (TAFP) in order to help the Capital Goods Industry to acquire and assimilate specific technologies for achieving global standards and competitiveness within a short period of time.
The Capital Goods sector contributes nearly constant proportion of 9-12 percent of the total manufacturing sector. The apparent consumption of Capital Goods constitutes a constant share of 17-21 percent of the total Gross Domestic investment in the country.
However, the investments in the Capital Goods sector have declined with the decline in the relative profitability of the Capital Goods sector with respect to other sectors. The capital goods sector determines global competitiveness of the manufacturing sector by being a vehicle of technology.
The Enhancement of Competitiveness of the Capital Goods Sector scheme will help in reviving the capital goods sector.