Scheme on Enhancement of Competitiveness in the Indian Capital Goods Sector- Phase-II

Table of Contents

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.