Capital goods sector in India: Relevance
- GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Capital goods in India: Context
Recently, Ministry of Heavy Industries has Notifies Scheme on Enhancement of Competitiveness in the Indian Capital Goods Sector- Phase-II for providing assistance to Common Technology Development and Services Infrastructure.
Capital goods in India: Key points
- The scheme has a financial outlay of Rs. 1207 crores with budgetary support of Rs.975 crore and Industry Contribution of Rs.232 crores.
- Objective: To expand and enlarge the impact created by Phase I pilot scheme, thereby providing greater impetus through creation of a strong and globally competitive capital goods sector that contributes at least 25% to the manufacturing sector.
Scheme on Enhancement of Competitiveness in the Indian Capital Goods Sector Phase 2: Six components of the scheme
There are six components under the Scheme for Enhancement of Capital Goods Sector Phase II.
- Identification of Technologies through Technology Innovation Portals;
- Setting up of four New Advanced Centres of Excellence and augmentation of Existing Centres of Excellence;
- Promotion of skilling in Capital Goods Sector–creation of Qualification packages for skill levels 6 and above;
- Setting up of four Common Engineering Facility Centres (CEFCs) and augmentation of existing CEFCs;
- Augmentation of Existing Testing and Certification Centres.
- Setting up of ten Industry Accelerators for Technology Development.
Capital goods sector in India
- Capital goods sector forms the base of many industries, and thus is an essential component of manufacturing.
- Capital goods sector has a total market size of US$ 92 billion and production valued at US$ 32 billion.
- The sector contributes to 12% of India’s manufacturing output and 1.8% to GDP.
- Employment: The capital goods industry employs 1.4 million of people and is estimated to employ 2.8 million by 2017.
Capital goods sector in India: Issues
- Although there is a potential of propelling the sector to around Rs. 7 lakh crore over the next 4- 5 years, the sector is currently facing insufficient off-take due to lack of domestic and global demand.