A day before it enters its third year, the Modi government approved the country’s first ‘National Capital Goods Policy’, which seeks to treble the production of capital goods in 10 years to ₹7,50,000 crore and raise employment in the sector almost four times to 30 million.

The government, which has been criticised for not being able to create jobs, is looking at giving direct and indirect employment to 30 million people from the current 8.4 million with this policy.

MSME thrust Promoting growth and capacity building of Micro Small and Medium Enterprises (MSME) are also on the agenda.

The capital goods segment is a key to the government’s ‘Make in India’ vision. The main recommendations include strengthening the existing scheme of the Department of Heavy Industry to enhance the competitiveness of the capital goods sector by increasing its budgetary allocation.

The policy also aims to increase exports from the current 27 per cent of production to 40 per cent.

“It will increase the share of domestic production in India’s demand from 60 per cent to 80 per cent, making India a net exporter of capital goods,” the release said. According to an official release, the policy addresses key issues such as availability of finance, raw materials, innovation and technology, and productivity, among other things.

It also proposes devising a long-term, stable and rationalised tax and duty structure to create an ecosystem for a globally competitive capital goods sector.

Welcoming the Cabinet decision, Chandrajit Banerjee, Director-General, CII, said the policy truly has the potential to script a new growth narrative in the history of India’s industrial development.   

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