The government on Wednesday gave its green light to India's first-ever policy on capital goods that intends to make the country a world-class hub and looks to create over 21 million additional jobs by 2025.
The decision was taken at a meeting of the Cabinet chaired by Prime Minister Narendra Modi here.
"The policy will help in realising the vision of building India as the world-class hub for capital goods. It will also play a pivotal role in overall manufacturing as the pillar of strength to the vision of Make in India," an official statement read.
"This is the first-ever policy for the capital goods sector with a clear objective of increasing production of capital goods from Rs 2,30,000 crore in 2014-15 to Rs 7,50,000 crore in 2025 and raising direct and indirect employment from the current 8.4 million to 30 million."
The policy envisions increasing the share of capital goods in total manufacturing activity to 20 per cent by 2025, from 12 per cent at present .
"Capital goods manufacturing if it happens in India along with the manufacturing that is going to happen downstream, the entire economy gets a fillip," Union Railways Minister Suresh Prabhu said.
The policy aims to increase direct domestic employment to at least 5 million from the current 1.4 million and indirect employment to 25 million from the current 7 million by 2025, potentially providing an additional employment to over 21 million people.
"The objectives of the policy will be met by the Department of Heavy Industry in a time-bound manner through obtaining approval for schemes as per the road map of policy interventions," according to the statement.
The policy envisages ramping up exports to 40 per cent of production, from the current 27 per cent. It will increase the share of domestic production in India's demand to 80 per cent from 60 per cent, which would make India a net exporter of capital goods.
It also seeks to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs.
"The aim of the policy is create game-changing strategies for the capital goods sector. Some of the key issues addressed include availability of finance, raw material, innovation and technology, productivity, quality and environment-friendly manufacturing practices, promoting exports and creating domestic demand," the statement added.
The whole idea is to unlock the potential of this promising sector and establish India as a global manufacturing powerhouse, said the document unveiled earlier this year.
To create an ecosystem for globally-competitive capital goods sector, the policy bats for devising a long-term, stable and rationalised tax and duty structure.
It also advocates adoption of a uniform Goods and Services Tax (GST) regime ensuring effective GST rate across all capital goods sub-sectors with a view to ensuring a level-playing field.
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