In the first of a planned series of initiatives under Prime Minister Narendra Modi's vision of 'Make in India', the Cabinet Committee on Economic Affairs on Monday cleared a Rs 931-crore (Rs 9.31 billion) scheme to raise competitiveness in the capital goods sector.
The aim of the project, to cost Rs 20,000 crore (Rs 200 billion) ultimately, is to boost manufacturing on a sustainable basis and through it, overall economic growth.
The scheme is to be implemented in the remaining period of the 12th five year Plan (2014-15 to 2016-17) and further in the 13th Plan period (2017-18 to 2021-22).
The Centre will give Rs 581 crore (Rs 5.81 billion) of budgetary support and another Rs 350 crore (Rs 3.5 billion) would come from stakeholder industries.
The sub-sectors covered are mainly machine tools, textile machinery, construction and mining machinery, and process plant machinery.
The aim is to upgrade technological depth and to create common industrial facility centres.
It will have five components.
These are creation of advanced centres of excellence for research and development and for technology development; establishment of integrated industrial infrastructure facilities, termed Machine Tools Parks; a common engineering facility centre for textile machinery; a testing and certification centre, and creation of a technology acquisition fund.
“This is a pilot project. We plan to expand it across the country,” heavy industries minister Anant Geete told reporters in New Delhi at a press conference.
Gross fixed capital formation, a proxy for investment, was 31 per cent of gross domestic product till the first quarter of 2012-13.
It had declined to 28.6 per cent in the first quarter of 2014-15.
Manufacturing also contracted this July, showing weakness in the sector.
There is uncertainty over sustaining of economic growth, which rose to a two-year high of 5.7 per cent in the first quarter of this financial year.
Image: Prime Minister Narendra Modi; Photograph: Kind courtesy, Business Standard
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