Industry welcomes Govt’s nod to capital goods policy
The Dollar Business Bureau
The government's nod to India’s first-ever policy for capital goods industry is welcomed by India Inc. Referring to it as the ‘need of the hour, it said the focus on exports, creating depth in demand and technology will help in coping with the issues and challenges faced by the industry.
The government gave its approval to the first-ever policy on capital goods of the country that is aimed to make India a world-class destination and looks to generate additional 21 million jobs by the year 2025.
The decision came after a meeting of the Cabinet committee headed by the Prime Minister Narendra Modi in New Delhi.
“The major focus of the policy on technology depth, demand creation and exports will, in the long term, help in addressing the issues and challenges the sector is currently facing,” said Chandrajit Banerjee, Director General, Confederation of Indian Industries (CII).
“Actualisation of these major areas of focus will definitely add pace and vigour in supporting efforts towards the growth of the capital goods sector thereby, contributing to the growth of manufacturing activity in India,” Banerjee added.
Harshvardhan Neotia, President, Federation of Indian Chambers of Commerce & Industry (FICCI) said, “India is capable to become the net exporter of capital goods from the current net importer. The national policy on capital goods is the need of the hour, which will give the much needed push to the industry and help in fulfilling the goals of Make in India.”
The policy is aimed at increasing the share of capital goods in overall manufacturing activities to 20 percent by the year 2025, from the present 12 percent. It also seeks to facilitate improvement in technology depth in all the sub-sectors, enhance skill availability, implementation of mandatory standards and encourage development and capacity building of medium and small scale enterprises (MSMEs).
The aim of the policy is to enhance direct local employment in the sector to about 5 million by 2025 from the present 1.4 million, and indirect employment from the existing 7 million, to 25 million by 2025, possibly creating additional jobs of around 21 million.
The policy advocates for creating a stable, long-term and rationalised structure for tax and duty in order to provide an ecosystem for world-class capital goods sector.
With a view to ensuring a level-playing field, it also supports the adoption of uniform structure for Goods and Services Tax (GST), to enable effective tax rates across all sub-sectors of capital goods.