The Indian machine tool makers, who are facing a huge rise in demand following the resurgence of the economy and automobile industry, have urged the government to set up a technology upgrade fund with a corpus of Rs 2,000 crore to meet the growing demand for new technology products.
The Indian Machine Tool Manufacturers’ Association (IMTMA), an apex body of the machine tool sector, has submitted a proposal before the Union ministry of heavy industries for setting up the fund, C P Rangachar, former president of IMTMA, said.
“The industry has set a target of achieving a compounded annual growth rate of 25 per cent starting with the present fiscal till 2020. The turnover of the industry will touch Rs 23,000 crore by then from Rs 3,100 crore in March this year. However, to achieve this growth, the industry needs to invest Rs 4,000 crore over the next 10 years on technology development to enhance its competitiveness. While the industry will invest Rs 2,000 crore, we are seeking matching grant from the government to achieve the desired targets,” Rangachar told reporters, here today.
The entire investment and the corpus fund would be utilised in extending loans to manufacturers at lowest interest rate to carry out technology development, he said.
The production of machine tools during 2010-11 was expected to touch a level ofRs 3,100 crore as against the demand for Rs 8,382 crore.
The industry turnover would touch Rs 9,450 crore by 2015-16, he said.
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On challenges facing the sector, Rangachar said getting finance for the industry was an issue, as the machine tools industry was considered a high risk industry by banks. He stressed on the need to increase production capacity on a wider product base to meet demands of aerospace, energy, defence, construction, health and other industries with good financing from banks.
IMTMA also reiterated its plea to the government to sanction Rs 1,400 crore funds for establishing machine tool parks.
Rangachar said the proposal had evoked a positive response from the Government, which now plans to set up a park on a pilot basis and upon evaluating its success, spread it to other parts of the country.
The IMTMA has also demanded regulation of imported used machines and keeping the machine tool industry out of FTA, upgradation of IITs for increasing skilled power and engineering colleges starting courses on machine tools.
The association is holding its flagship event, IMTEX 2011, the 15th edition of international metal cutting machine tool exhibition here from January 20-26, showcasing innovations and technological refinements in the machine tools sector.
Companies from 23 countries, besides India will participate in the event, said Shailesh Sheth, media chairman, Indian Machine Tool Manufacturers’ Association.