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Set up modernization fund for capital goods sector: Ficci

By A Staff Reporter

Realizing the need for technology upgradation and enhancing the R&D activity in the capital goods sector, FICCI recently sought a modernization fund of Rs 500 crore for the Indian capital goods sector. In addition to the modernization fund, FICCI also emphasized the need for developing capital goods parks in the country for which an allocation of Rs 1,000 crore would be required.

The development of such parks is required to overcome infrastructure deficiencies faced by Indian capital goods sector, FICCI said. The demand comes in the wake of increasing competition from rising imports of capital goods in the country. Capital good imports in India have increased by over five times in the last six years from $6.5 billion in 2003-04 to $30 billion in 2008-09.

Elaborating the details of the modernization fund, FICCI said that the fund would have five components namely: Productivity Enhancement through Technology Transfer; Support to Research & Development Projects; Climate Change & Capital Goods Sector; Common Facility Centers and Market Development Support.

FICCI observed that the primary reason for lower productivity of capital goods sector in India is lack of availability of latest technology in various segments. This could be overcome by Government support to the industry for technology transfer programmes in which assistance could be provided to small and medium enterprises to cover their expenses for various aspects of technology transfer like license fees, legal fees associated with technology transfer and training expenses. The areas which could be looked into for technology transfer and absorption programmes are special welding techniques like friction stir welding and laser MIG welding, narrow gap welding with auto bead sequencing and hot wire narrow gap TIG welding.

In R&D, FICCI said that it is imperative to have collaborative approach to R&D by all the stakeholders of the industry -- enterprises as well as research institutes and academia. This intervention can be made operational by providing support to joint arrangements made by and between the research institutes, industry players/association for innovation and product development through R&D, pointed out FICCI.

Also, support could be provided for promoting joint development programmes on key equipments for future power plants between plant producers and equipment companies, FICCI emphasised.