Cabinet nod to capital goods sector enhancement scheme

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SME Times News Bureau | 16 Sep, 2014
Aiming to make the Indian capital goods sector globally competitive, the Cabinet Committee on Economic Affairs (CCEA) Monday approved the "Scheme for Enhancement of Competitiveness of the Capital Goods Sector" to boost the Indian economy, an official statement said New Delhi.

The scheme will be implemented in the 12th Plan period and spill over to the 13th Plan period with an estimated outlay of Rs.930.96 crore. 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, the statement said.

“This scheme, on its implementation, would attempt to make the Indian capital goods sector globally competitive. The sub sectors of capital goods covered under the scheme are mainly for machine tools, textile machinery, construction and mining machinery and process plant machinery. The proposed scheme addresses the issue of technological depth creation in the capital goods sector, besides creating common industrial facility centres,” it said.

The capital goods value added contributes a fairly constant proportion of 9-12 percent of the total manufacturing value added. The apparent consumption of capital goods constitutes a constant share of 17-21 percent of the total gross domestic investment in the country.

The scheme has five components to achieve the desired result in pilot mode. Firstly, creation of "Advanced Centres of Excellence" for research and development and technology development with national centres of excellence in education and technology.

Secondly, establishment of "Integrated Industrial Infrastructure Facilities" popularly known as Machine Tool Parks with a basic objective of making the machine tool sector more competitive by providing an ecosystem for production.

Thirdly, “Common Engineering Facility Centre" for textile machinery will be be set up with active participation of the local industry and the industry association, which in turn would improve facilitation to the users along with visibility.

Fourthly, “Testing and Certification Centre" for earth moving machineries in view of the fact that it is soon going to be made a mandatory requirement and at present there is no test facility to test earthmoving machinery like that in the automobile industry.

And finally, the creation of a "Technology Acquisition Fund" under the Technology Acquisition Fund Programme 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 release added.