The union government has launched India’s first ever policy for capital goods sector with an aim to create 21 million additional jobs by the year 2025. The policy also aims to increase the share of capital goods in total manufacturing sector to 20% by 2025 from the current 12%.
- The prime objectives of the National Capital Goods Policy is to create a cohesive ecosystem for the competitive capital goods sector to achieve the total production target of Rs. 7.5 lakh by 2025 from Rs. 2.3 lakh crore at present. The policy also plans to increase direct domestic employment to a minimum 5 million from a current 1.4 million and indirect employment to 25 million from the current 7 million, both by the year of 2025.
- The policy is expected to establish India as a global manufacturing powerhouse. It also aims to increase the share of domestic production of the capital goods demand of India from a current 60% to 80% by 2025. The policy will also see relaxed norms and tax regulations.
- The National Capital Goods Policy’s major recommendations include strengthening the already existing schemes/policies of the Department of Heavy Industry to enhance the competitiveness of the capital goods sector and also to increase the money allocation in the coming budget to give boost to the sector. It also recommends for a universal customs duty regulation on all imported capital goods product.
- The policy also recommends equalization of Countervailing Duty (CVD) and Excise Duty, Special Additional Duty (SAD) with Sales tax/VAT/GST. As, MSMEs are the strength of the business sector, the policy also aims to improve/upgrade technology in all the sub-sectors, increase skill availability as well as increase the thorough capacity building off MSMEs.
- The policy also looks for exporting Indian capital goods through a ‘Heavy Industry Export & Market Development Assistance Scheme (HIEMDA), establishing new Technology Development Fund etc. The new policy envisages of increasing the export to 40% of total production (from Rs. 61,000 crore to Rs. 3 lakh crore) by the year 2025.
- The policy also calls for abolition of ‘Zero Duty’ clause for all the capital goods under Project Imports in the taxation policy provided that the goods are not manufactured in India. Lastly, the policy calls for enhancing the availability of skilled human resource with much higher productivity in the capital goods sector by proving training to over 50 lakh people by 2025 as well as establish training institutions for skill development in the capital goods sector.