The government on Monday unveiled the National Capital Goods Policy in order to give impetus to the capital goods sector. This is for the first time that a national policy has been framed for the sector.
Heavy industries secretary Rajan Katoch says this is the first-ever policy intervention as far as the capital goods sector is concerned. "Previously, there have been piecemeal approaches, but this is comprehensive. There are 10 sub-sections in capital goods and this policy addresses each one of them," he told CNBC-TV18.
He says not only is such a policy critical for Make in India, it is critical for any country that aspires to be a strong manufacturing base.
Katoch further says the government is using the inverted duty structure in the capital goods policy to combat cheap imports.
Below is the transcript of Rajan Katoch with Alexander Mathew on CNBC-TV18 on CNBC-TV18.
Q: Can you please explain us the significance of this policy?
A: It is the first ever intervention of this kind, first ever policy. You had piecemeal policy actions on certain parts of capital goods. This one is comprehensive. There are 10 sub-sectors of capital goods. The big ones are heavy electrical, machine tools, construction equipment and others.
This addresses each of them. It is comprehensive in the sense that you have taken very wide process of industry consultation to arrive at these specific measures that we need to undertake. These have been spelt out in the policy that we have the challenges, we have technology issues, we have competitiveness issues, standards, size of industry and each of them, how we propose to address them, not only as a whole, but for each sub-sector. So, that is the second part.
It is critical for the Make in India, generally, but for any country which aspires to manufacturing strength because capital goods are machinery equipment from which you manufacture. So, if you do not have a strong base in this, you are not likely to get the kind of strength that we aspire to. So, that is why it is critical.
Q: So, the policy goes onstream in the beginning of the next financial year, I believe. How are the regulations slotted to change? What is the timeline that we can expect for change in regulation and policy to spur capital goods?
A: Policy goes on stream immediately. It is approved and it starts off. What we have done is in the implementation in advance, in fact, even before this has been released, we have set up two standing committees. There will be one for the administrative coordination with all the ministries which are required because we are just one player. That is headed by the Secretary of Heavy Industries.
Second is on the technology aspect which is very critical and it is one of the reasons why we are not doing as well as it should. That would be headed by the member of Niti Aayog, Dr Saraswat. That would coordinate all the technology aspects and what all we need to do. So, these mechanisms have been put in place. Now, this policy will be slowly as we get on, these committees will start ironing out all the issues and proposed measures, which have to be then all approved of course. But I would say, I see it playing out over the period of next one year or so. Most of the measures should be under stream by then.