Government approves capital goods sector policy

NEW DELHI,YUTHIKA BHARGAVA:The Cabinet approved the first-ever policy for the capital goods sector in the country that aims to triple the value of production of these goods to Rs.7.5 lakh crore by 2025 and create more than 21 million jobs.

A dock worker stands as a container is prepared prior to being loaded onto a ship at the Container Terminal at

The policy also envisages increasing exports to 40 per cent of production from the present 27 per cent. The share of domestic production in India’s demand will also be increased from 60 per cent to 80 per cent, making India a net exporter of capital goods.

“This is first ever policy for 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,” according to a government statement.

“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’,’ according to the statement.

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 roadmap of policy interventions.

HSCL takeover

The Union Cabinet also approved financial restructuring of Hindustan Steel Works Construction Limited (HSCL) and its takeover by National Buildings Construction Corporation Limited (NBCC), which is a PSU under the Ministry of Urban Development.

HSCL will become subsidiary of NBCC with the latter holding 51 per cent equity. The shareholding of Government of India in HSCL will be reduced to 49 per cent.

As per the proposal, the government’s loan along with accumulated interest and outstanding guarantee fee worth Rs.1,502.2 crore will be converted into equity and equity capital of the company will be raised to that extent.

The paid-up equity capital of the company will become Rs.619.3 crore from Rs.117.1 crore at present. After writing off of the accumulated losses, the equity and paid up capital of HSCL will become Rs.34.3 crore.

Further, NBCC will infuse funds of Rs.35.7 crore as equity into HSCL. The equity and paid up capital of HSCL will become Rs.70 crore.

The government will provide one-time support of Rs.200 crore for settling term loans availed from commercial banks.

HFCL loan waiver

The Cabinet also approved waiving off of loan Rs.1,916.14 crore (as on 31.03.2015) and the outstanding interest of Rs.7,163.35 crore on the loan owed by Hindustan Fertilizer Corporation Ltd (HFCL) as part of a financial restructuring package for the PSU.

The transfer of 56 acres of ash dyke land of Barauni unit to Bihar State Power Generation Company Limited (BSPGCL) to settle dues of HFCL for faster revival of Barauni Unit was also given a nod.

India Posts

The Cabinet also granted ex-post facto approval to the proposal for undertaking cadre review of the Indian Postal Service.

The government said this will enable the Department of Posts to meet the functional requirements and strengthen the cadre structure both in the headquarters and in the field on the basis of functional requirement.

It will also reduce the existing stagnation and improve the career prospects of Indian postal service officers.

The proposal will be implemented through measures that include creation of various posts at different levels. However, there will be no change in overall number of posts in the cadre.