Reading Time: 5 minutesOn Wednesday, the Central Government, through its Union Cabinet, gave its nod to the National Capital Goods Policy (NCGP) with an aim to create around 31 million jobs by 2025 and increase production to Rs. 7.5 lakh crore from the current Rs. 2.3 lakh crore.
About the current NCGP
The National Capital Goods Policy, which was first presented by the Department of Heavy Industry to the PM in the workshop of the ‘Make in India’ held in December 2014, has set the goal to increase exports to 40% of production from the current 27% that is going to raise the share of domestic production in India’s demand from 60% to 80% that is sure to make India a net exporter of capital goods.
The National Capital Goods Policy intends to enhance direct domestic employment from the current 1.4 million to at least 5 million and indirect employment from the current 7 million to 25 million by 2025.
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The policy also talks of adopting a uniform Goods and Services Tax (GST) regime making sure effecting GST rate across all capital goods sub-sectors competitive with import duty after set-off with a view to secure a level-playing field.
The policy also intends to expedite improvement in technology depth in all sectors, raise skill availability, make sure mandatory standards and encourage growth and capacity building of MSMEs. The policy is going to help in acquiring the vision of Building India as the ‘World Class hub for Capital Goods’.
The Department of Heavy Industry has the responsibility of meeting the objectives of the National Capital Goods Policy in a time bound manner by getting approval for schemes as per the roadways of policy interventions.
Vision of the National Capital Goods
Chapter 4 of the Draft National Capital Goods Policy, October 2015, while describing its vision says: The National Capital Goods is formulated with the vision to increase the share of capital goods contribution from present 12% to 20% of total manufacturing activity by 2025.
Mission of the National Capital Goods Policy
According to the Draft Policy the mission of the National Capital Goods Policy is to acquire the position of one of top capital goods producing countries of the world by enhancing the total production to over twice the current level.
One of the missions of the National Capital Goods Policy is to increase exports to a significant level of at least 40% of the total production and therefore procure substantial share in global exports of capital goods.
The Mission also includes to mend technology depth in Indian Capital Goods from the present basic and intermediate levels to advanced levels.
Objectives of the National Capital Goods Policy
In order to accomplish its objective of increasing total production the Policy aims to create an ecosystem for a globally competitive capital goods sector to get to the total production Rs. 220,000 crore.
One of the objective of National Capital Goods Policy is to raise domestic employment from the current 1,500,000 to at least 5000,000 by the year 2025, therefore, catering additional employment to over 350,000 people.
National Capital Goods Policy aspires to achieve its objective of increasing the share of domestic production in India’s capital goods from 56% to 80% by 2025 and in the process better domestic capacity utilization to 80-90%.
The National Capital Goods Policy policy has the objective to enhance exports to 40% of the total production – from Rs. 62,000 crore to Rs. 200,000 crore, by 2025, that is going to enable India’s share of global exports in capital goods to raise to 2.5%.
The National Capital Goods Policy, as described in detail in the Drof Policy, has the objective to substantially increase the availability of skilled manpower having higher productivity in the Capital Goods Sector by imparting training to 50 Lakh people by the year 2025, and initiate institutions having the responsibility of delivering human resources with skills, knowledge and capabilities to speed up growth and productivity.
The NCGP envisages to accomplish its objective of improving technology depth in capital goods sub-sectors by raising the intensity of research in India from 0.9 to at least 2.8 per cent of the Gross Domestic Product (GDP) to secure a rank amongst the top ten countries in research intensity and get to the global benchmarks for intellectual property in the capital goods sector.
One of the objectives of the National Capital Goods Policy is to restrict inflow of sub-standard capital goods by consent to commissioning technical and safety standard that securing compliance to the same.
The last, but not the least, objective of the National Capital Goods Policy is to encourage development and raise capacity of SEMs in order to compete with well-set domestic and international firms and acquire the status of national and international champions of capital goods in the days to come.
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