The National Manufacturing Policy envisaged manufacturing to contribute 25% to GDP and create 100 million jobs. In contrast, till date, manufacturing activity contributes to 17% of India’s GDP and only 4 million jobs are estimated to have been created in the sector since 2010. The gap to stated aspiration is large.
The Capital Goods sector is a critical element to boost manufacturing activity by providing critical inputs, that is, machinery and equipment.
Hence Government has come out with 1st ever policy for the country’s capital goods sector. It envisages carving out a roadmap to boost manufacturing in Capital Goods (CG) sector so that it becomes a part of global value chains apart from mere supply chains.
Vision: The National Capital Goods Policy is formulated with the vision to increase the share of capital 24 goods contribution from present 12% to 20% of total manufacturing activity by 2025.
Objectives of the Policy:
The objectives of the National Capital Goods Policy are to:
• Increase total production: To create an ecosystem for a globally competitive capital goods sector to achieve total production in excess of Rs. 750,000 Cr by 2025 from the current Rs. 230,000 Cr.
• Increase employment: Raising direct and indirect employment from the current 8.4 million to Rs.30 million by 2025.
• Increase domestic market share: To increase the share of domestic production in India’s capital goods demand from 60% to 80% by 2025 and in the process improve domestic capacity utilization to 80-90%.
• Increase exports: To increase exports to 40% of total production (from Rs 61,000 Cr to Rs 300,000 Cr) by 2025 from current 27%, enabling India’s share of global exports in capital goods to increase to 2.5% and making India a net exporter of capital goods.
• The policy also aims to facilitate improvement in technology depth across sub-sectors (increasing research intensity in India from 0.9% to at least 2.8% of GDP), increase skill availability (training Rs.50 lakh people by 2025), ensure mandatory standards and promote growth and capacity building of MSMEs
The objectives of the policy will be met by the Department of Heavy Industry in a time bound manner through obtaining approval for schemes as per the roadmap of policy interventions.