Data Drive: Capitalising on capital goods

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Updated: October 31, 2015 12:51:04 AM

The government’s draft national capital goods policy aims to increase the share of capital goods from 12% to 20% of total manufacturing activity by 2025.

The government’s draft national capital goods policy aims to increase the share of capital goods from 12% to 20% of total manufacturing activity by 2025. While the sector employs over 1.5 lakh people, growth over the past three years has been a mere 0.3% annually. Around 45% of India’s demand for capital goods is met by imports and domestic capacity utilisation across its sub-sectors is only around 60-70%. Local manufacturers have not been able to effectively tap the global market. Delay in implementation of approved projects stymied the growth of the sector.

Though the policy has outlined measures like correction of inverted duty structure and improvement in R&D and funding for the capital goods sector, unless there is a change in the overall business environment, isolated policies like this will translate to little on the ground.

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