The government should earmark Rs 1,500 crore for modernisation of the capital goods sector and development of industrial parks for them to reduce India's dependence on imports, Ficci today said.
A Rs 500-crore fund should be set up for technology modernisation, including R&D and Rs 1,000 crore should go towards developing capital goods parks, the industry chamber said.
"The development of capital goods parks is required to overcome infrastructure deficiencies faced by Indian capital goods sector," it said, adding that the demand comes in the wake of increasing competition from rising imports.
India's capital good imports have increased by about five times in the last six years to $30 billion in 2008-09 from $6.5 billion in 2003-04.
Ficci said the parks would ensure timely delivery of components and standardisation of manufacturing processes. They would also improve productivity and thereby help the sector become cost effective and competitive.
The proposed fund should be used for productivity enhancement through technology transfer, support to research and development projects, climate change, common facility centers and market development support, it added.
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"The primary reason for lower productivity of capital goods sector in India is lack of availability of latest technology," it said, adding that assistance could be provided to Small and Medium Enterprises (SMEs) to cover their expenses for various aspects of technology transfer like license and legal fees associated with technology transfer and training expenses.
Ficci further said there is also a need for setting up common facility centres in public-private partnership mode for segments of capital goods sector, which do not have major R&D, testing and other common infrastructure facilities.