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GOVERNMENT OF INDIADEPARTMENT OF HEAVY INDUSTRIES

MINISTRY OF HEAVY INDUSTRY & PUBLIC ENTERPRISES

MEMORANDUM FOR EXPENDITURE FINANCE COMMITTEE

1. Project identification1.1 Title of the project/scheme:

Scheme for Enhancement of Competitiveness in the Indian Capital Goods Sector (SEGC-Capital Goods)

1.2 Name of the sponsoring agency (Ministry/Department/Autonomous Body/Central PSE):Department of Heavy Industry (DHI), Ministry of Heavy Industries & Public Enterprises, Government of India

1.3 Proposed duration of the project:During 12th Five Year Plan

1.4 Total cost of the project over the proposed duration

The during the 12th Plan Period the proposed Government budgetary support to be given as grants to various proposals is Rs.1081.22 crore as alloted.

2. Project Status

2.1 Please indicate which category the project belongs to:(a) Continuing scheme from past Plan periods and included in current Plan period.

NA(b) New Plan Scheme included in the current Plan period

Planning Commission accorded with a condition to ‘in principle’ approval incorporate recommendations of the Working Group on the ‘Capital Goods and Engineering Sector’ as mentioned in the Chapter on Industry of the 12th Five Year Plan.

(c) New Plan Scheme not included in the current Plan periodNot applicable

(d) RCE proposalNot applicable

2.2 If project pertains to category 2.1 (a), please summarise the benefits already accrued and expenditure already incurred along with an independent evaluation of the past performance of the project scheme.

Not applicable

2.3 If the project pertains to category 2.1 (c), please indicate steps initiated for obtaining approval of Full Planning Commission.Not applicable.

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3. Justification for the project

3.1 The justifications for taking up/continuing the project or scheme may be provided.

I. Background: Indian capital Goods Sector is suffering from Adverse Policy regime, obsolete technologies, lack of skilled manpower and other infrastructure challenges. The capital goods industry is considered as the ‘mother’ of all manufacturing industry and consequently is of strategic importance for depth in technology in manufacturing sector, national security and economic independence. The Capital Goods sector consisting of machinery manufacturers has an estimated turnover of Rs 1,85,000 crore against a demand of Rs 2,67, 000 crore. The imports are at Rs 1,16,000 crore ( 43.5% of demand and 62.7% of production). Exports are a Rs 34,000 crore ( 18.4% of production).

The Prime Minister’s Group in its Report (PMGR) identified capital goods as one of the sectors that is strategic for strengthening national capabilities for the long term. The PMGR has recommended that a time-bound action plan should be prepared in each of these areas for building high class modern capacities with R&D facilities, appropriate programme to encourage growth and development of these areas in the private sector together with Industry strengthening of the existing public sector and revisiting the existing policies to protect and promote selected capital goods industries.

Industry has been demanding modernization of the Capital Goods sector at all forums for past five years. The Indian Capital Goods Sector presented a comprehensive study of the sector few years back. The study brought out the need for modernization and upgradation through Government support.

DHI, in association with Indian Capital Goods Sector, had conducted a study to develop a road map and scheme for modernization of the capital goods sector. India is amongst the five large consumers of Capital Goods. While very high tech Capital Goods will continue to be imported, India needs some degree of strategic independence by local manufacturing. Given the technology denial regime, we need to development our own technology and other infrastructural facilities, to make our industry globally competitive.

The Working Group formed under the aegis of the Planning Commission on the sector also recommended the modernization needs of the Industry (Annexure I). The 12th FYP document also attached significance to the capital Goods sector as strategic sector.

II. The major constraints affecting the competitiveness of the industry are: A. Technology & Knowledge Constraints i. Lack of Technology upgradation & Modernization – The current level of technology is

not contemporary. The large firms are able to modernize to some extent, but are dependent on vendors for supply of components and intermediates. Since the vendors are not cost competitive due to lack of modernization, the competitiveness of the large firms is also eroded.

ii. Lack of Cutting Edge Technology – Without institutional R & D support, Capital Goods units are unable to develop and adopt cutting edge technologies. This erodes their global competitiveness.

iii. Lack of Research & Development Support – The capital goods industry is a knowledge based industry which requires constant R&D efforts to produce state of the art machinery to meet the growing demands of the user industry. However, due to the non-availability


of sustained R&D support from institutions, experts, and in house R&D capabilities of the Capital Goods sector, the industry is out of pace with modern technology.

iv. Capacity constraints due to lack of new investments : Capital goods industries are capital intensive and also have a long gestation period; besides, creation of new capacities requires land and infrastructure. For these reasons, creation of new capacity has been slow, and this has further encouraged increased imports of capital goods. Bringing new investments for capacity enhancement is a priority for the CG sector.

v. Lack of Skilled Manpower – Primarily due to service sector absorbing a majority of technical manpower graduating from institutes like engineering colleges, manufacturing sector including Capital Goods sector is suffering from non- availability of trained manpower. Secondly, the quality of institutional output is not what is needed by the industry in sectors like R & D, design, product development, technology development & modernization, manufacturing processes etc.

vi. Lack of Level Playing field : Import of Capital Goods is easier and less expensive. Open trade policy has turned India into second largest importer of Capital Goods after China. Adverse policy regime creates unfavourable environment for technology upgradation and also domestic production. Imports are cheaper due to zero duties under FTA or special provisions and additional statutory duties like sales tax, entry tax, octroi, VAT and other local duties levied on domestic manufacturing of Capital Goods.

vi. Import of Second hand Capital Goods: Second hand capital goods are allowed to import freely in India without any technical barrier. Capital Goods is the largest manufactured commodity in India’s import basket. This hinders capacity utilization, modernization, investments and growth.

vii Infrastructure constraints in terms of unreliable power and its high cost, port congestion and high turnaround time, high cost of fuel and poor road connectivity of ports / airports with hinterland leading to higher transportation cost and high cost of money adversely impact global competitiveness.

Viii The above situation has resulted in India becoming largest market for import of capital Goods in the World , while creating and upgrading domestic capacity can reduce imports by increasing domestic production.

ix Without the scheme, the imports will continue to increase and adversely affect the indigenous capital goods industry and user industries in terms of closure of units, loss of employment, loss of investment and affecting the social fabric of the country.

X The scheme will encourage investment in technology upgradation, skill development and augmentation of modern manufacturing capacities for holistic growth of the industry. The technology upgradation of the SMEs will enable the large firms to get adequate support from small vendors in execution of large orders expeditiously.

Xi The scheme proposes to mitigate the impact of the some constraints and to enhance the competitiveness of the capital goods industry enabling it to withstand the import penetration and increased exports. The scheme will offset the global disadvantages to a large extent. Most importantly, the scheme envisages actions in synchronization with 12 th

FYP for rejuvenating growth in manufacturing sector. Xii The proposed scheme envisages Govt investment of Rs 1081.22 crore during 12 th FYP.

Most of which is proposed to create permanent technical services, industry parks for clusters & common facility centres.


Xiii The amount proposed to be spent is a fraction of contribution of the industry to the national exchequer as taxes. During the 12th FYP the industry is likely to have a turnover of not less than Rs 10,00,000 crore with the scheme. The tax contribution is calculated @ 16% of its turnover i.e. Rs 1,60,000 crore.

Xiv As per a back of the envelope calculations, atleast 1% of above turnover during the Plan may be attributed to the technologies and services through the proposed facilities. The additional tax component itself works out to be Rs 1600 crore during the 12 th FYP.

Xv The other intangible benefits arising out of the improved technology level are growth in employment and exports.

3.2 The alternatives that have been considered before firming up the design of the project may be stated. (This should also include alternate modes of project delivery, e.g. outsourcing PPP etc. that have been considered).

India does not have technology development facilities dedicated or general, which can be used by the Capital Goods sector. Though some efforts are made in laboratories and academic institutions, these efforts are far too inadequate and not in the direction needed by the industry. It can be safely concluded that the existing system has failed to address industry issues on technology and skill development. There is no alternative except to comprehensively address the problems faced by the sector by involving all stake holders – owners of the value chain in planning and implementation.

The proposed scheme is a part of integrated approach for transformation of the sector. The Industrial Park & Common Facilities project components are proposed to be implemented in PPP mode with stake holders ensuring efficient project delivery. Pre-competitive technologies development in dedicated facilities with 90% grants to be created under the proposed scheme will be linked to Technology Centre of Excellence of CMTI, IITs-Bombay/Delhi/Madras/Kharagpur etc. 360 degree involvement of all stakeholders will provide checks and balances.

Dedicated facilities for pre-competitive technology development at Technology Centre of Excellence (TCoE) and undertaking mandatory tests are proposed to be created through DHI floated SPVs, whereas Industry Parks, Common Facilities for Machine tools, Textile machines and other sub-sectors of capital goods are proposed through PPP mode and also through dovetailing of academia.

3.3 Please state whether the project proposal has objectives and coverage which overlap with projects/schemes being implemented by the same or another agency (Ministry/Department/State Government). In cases of overlap, please state why the project scheme needs to be considered as a separate stand alone effort.

The scheme is limited to the Capital Goods sector, and as per Allocation of Business Rules DHI is the Administrative Ministry. It is the first scheme ever for the sector. The Working Group formed under the aegis of the Planning Commission had proposed a number of steps and proposals for development of Capital Goods Sector. All of them could not be covered in the present scheme for lack of resources in the present Plan. The scheme covers only the most essential and core subjects such as technology generation centre through Centre of Excellence, quicker technology acquisition, etc. in the Capital Goods sector. The rest of the recommendations


are proposed to be undertaken in the 13 th FYP for which separate EFC proposal will be prepared at an appropriate stage.

Other Ministries/ Departments such as DIPP (MIIUS), MSME (CFC & Cluster Development), M/S & T (R & D) and DGET & NSDC & Skill Authority (Skill infrastructure) run some schemes with well defined scope and objectives. Design of the proposed scheme for Capital Goods sector ensures no overlap with objectives and coverage of these schemes. Focus of existing schemes mentioned before is on enhancing access of manufacturing & service sectors to better quality of industrial infrastructure. DIPP – MIIUS is run with State Governments , supporting them in brown field industrial infrastructure projects. They provide grants upto Rs 50 crore to the States (upto 75% of the project cost). MSME Schemes are well designed to suite all types of the industrial infrastructure requirements of smaller clusters of artisans and MSME units. These scheme are based on templates and individual proposals are submitted under the scheme by project authorities. Concerns of the Complex Nature of Capital Goods sector could not be addressed by these schemes.

Existing scheme’s focus are either on low cost, low technology and general types of higher level of hi-tech component & production facility, industrial infrastructure, common facilities or limited technology services. While the proposed scheme is an integrated one and includes technology development, integrated supply chain, common test facility & acquisition..

DHI proposal is for specific facilities, which are much larger & above the limits of other schemes. The scope of the proposed facilities is also technologically complex and suits machine building sector , therefore, the basic nature of DHI proposal is quite separate than existing schemes. Also these proposals need integration with other initiatives on policies etc included in the 12 th FYP document , which have to be coordinated by DHI as the Administrative Ministry.

This fact was established by the Planning Commission while according “in principle” approval.

4. Project Objectives and targets

4.1 The objectives of the project may be mentioned. These objectives should flow from the project justification.

The overarching objective is to make the domestic Capital Goods Sector globally competitive by addressing the constraints. The primary objectives of the scheme are Technology development & acquisition through creating enabling environment and facilities. The desired results are reduction on dependence on imports and doubling the production & employment.

The present structure of the Indian Capital Goods industry started to take shape in the hands of private techno-entrepreneurs after liberalization of 1991. However, size of the units being small, they could not keep pace with the technology modernization. National priorities with sectors like textiles, highways, steel, fertilizers etc and external trade relations resulted in a regime of free and cheap ( sometimes) imports of capital goods. This blocked modernization, capacity addition and new investment & technology induction. India became the world’s top market for Capital Goods with unique feature of access to second hand capital goods. Manufacturers of Capital Goods


elsewhere preferred export to India being more profitable, rather than making investments in India. They did not agree to transfer their technologies to Indian manufacturers of the capital goods. Import of Second hand capital goods in India made the situation more difficult for Indian manufacturers of Capital Goods.

Facing similar situation of technology denial by EU, USA and Japan few years back China, Taiwan and South Korea embarked upon huge national programme for machine building based on creation of local technology development capabilities. Today they are exporters of Capital Goods The proposal is the first step and is in coordination with objectives of the National Manufacturing Plan to increase “depth in technology”. The proposal is designed to address industry needs for technology development.

4.2 The expected date of project/scheme completion may be stated. This should be realistic and supported with a chart indicating timelines for the important activities, with a critical path analysis, identifying the main constraints.

DHI has targeted scheme component completion in synchronization with the 12 th FYP. Scheme PERT is enclosed. Since the processes are sequential and go upto the end of the 12 th FYP, Critical Path Analysis is defined by hierarchy of processes.

Several checks and balances have been provided for in the design of the project in form of Apex Committee headed by Secretary (Heavy Industry) and membership of all stakeholders, PPP route, appointment of professional Project Manager and periodic review and monitoring.

4.3 The specific targets proposed to be achieved of the project/scheme may be mentioned. These targets should be necessary measurable. These should also be monitor-able, against baseline data. The baseline may be indicated.

Physical Targets: Atleast

i. Development of Technologies identified as gaps in the Planning Commission Working Group Report on “Capital Goods and Engg Sector” through Industry Consortiums and IITs/ NITs/ CMTI/ CSIR Labs/ DRDO Labs/ other Institutions- development of Technologies and service delivery through Technology Centre of Excellence to be set up dedicated to needs of Indian Capital Goods Sector: 3 nos;

ii. Common Industrial Facility Services at Centres at Capital Goods clusters : 2 nos andiii. Technology Acquisition Programme: 05 technology acquisitions.

5. Project design

5.1 Briefly explain the project Design. This should include all components of the project.

The project has been designed to enhance global competitiveness of the Capital Goods sector through technology interventions as proposed in the reports of the Prime Minister’s Group, the Planning Commission Working Group & 12th FYP document and the expert consultant. The


constraints of technology development are proposed to be addressed through new technology whose output will be the identified technology.

This initiative is the stepping stone for quest of the nation to become one of the top five global destinations for manufacturing capital goods. This transformation is possible, only by reversing the present trend of knowledge import to knowledge generation through dedicated technology development facilities for the sector.

This strategy is in line with the national efforts undertaken for enhancing global competence in machine building by China, South Korea and Taiwan. This was necessitated by technology denial regime of the Western economies including Japan.

There will be two types of technology/ knowledge generating facilities for the sector, one for pre-competitive technology, which are common to all Capital Goods. These include Mechanical engg, measurement technologies, tool engg, , control technologies, ICT , new materials etc. Most machine builders have no knowledge of these technologies. This gap in technology sourcing is proposed to be filled through pre-competitive technology development centres. Such facilities are proposed m in collaboration with existing IITs/ NITs/ CMTI/ other Centres of Technology Excellence.

These Products and Technology Development Centres (PTDCs) can be created in a number ways:-

Through establishing Centres of Excellences for integrated Technology Development for identified Sub-sectors in IITs/ IISc/ NITs/ other institutes alone or in consortium with user industry and other Technology Institutions abroad such as Fraunhofer Institutes of Germany , University of Aachen, Tokyo University, MIT etc. These Centres will development technologies through:-

o / in consortium with users / industry, other stakeholders and knowledge providers,

o Sponsored projects in India and abroad ( part),o Contractual R & D and Technology Deployment,o Purchase or licensing of IPR/ technology for further development/ indigenization,o Hiring or contracting experts from industry in the Centres at the institutes,o Technology problem solving for SMEs,o Providing Technical Consultancy to a unit or group of units,o International or bilateral technology development,o Other methods considered by the Joint Steering Mechanisms.

It is expected that a number of technology gaps would be filled using indigenous efforts for technology development, particularly in the field where India has restricted approach to technology transfer.

Technology Acquisition Fund (TAP) is an industry driven initiative. Under this individual industry and/or consortium their of will be supported to develop targeted technology. To motivate


they will be given attractive capital subsidy. This tool is well targeted towards the technologies which are available for R & D / transfer / licensing/ acquisition/ IPR exploitation.

The second type of facilities is Common industrial Facilities Centre (CFCs) for testing, product design, hi-tech parts, manufacturing, environment management and like. The proposed machine tool industry park together with technology and common facilities intervention in the machine tools sector will have cascading impact of upgrading technologies in other machines and manufacturing sector. Testing of Earth Moving, Construction and Mining machines is soon to be mandatory and is a sovereign function. Technology upgradation of textile machines including high speed shuttleless-looms have important bearing on Indian textile sector and is much needed.

5.2 In case the project or scheme is location specific, please state the basis for selection of such location.

The Scheme is for enhancing competitiveness for domestic Capital Goods Industry and hence meant for the whole country. It does not have any location preference. However, location of individual Technology Centre of Excellence, Cluster Park, Common Facility Centres under the Scheme will be decided by the proximity of the relevant industrial clusters to extend maximum benefit to the relevant segment of Capital Goods.

5.3 If the project involves creation/modification of structural and engineering assets or

change in land use plans, disaster management concerns as brought out in Om No. 37 (4).PF-11/2003 dated 19.06.2009 should be assessed. A self-certification in this regard may be enclosed with the EFC memo.

Individual infrastructural facilities such as Technology Centre of Excellence, Industrial Cluster Park, Common Facility Centres to be set up under the Scheme should address the above issue in the individual project DPRs. Attempt is to utilize land available with IITs and other State/Central Institutions.

5.4 In case of beneficiary oriented project/scheme, the mechanism for identification of the beneficiary and the linkage of beneficiary identification with UID numbers may be indicated as advised in OM no. 1(3)/PF-II/2001 dated 09/08/2010.

Beneficiaries are industry and not individuals.

5.5 Wherever possible, the mode of delivery should involve the Panchayati Raj Institutions and Urban Local Bodies. Where this is intended, the preparedness and the ability of the panchayats for executing the project may be indicated. If exceptions are to be made, the reasons may be explained.

The implementation of the scheme will be through Society created specifically for the purpose by the Department of Heavy Industry.

5.6 In case the project involves land acquisition or environmental clearances, the specific requirements and the status in this regard may be indicated.


The scheme intends grant in aid to projects for Machine Tool Industrial Park/CFCs/TCoE/Test Facilities. Wherever such approvals are needed, they will be obtained as per the law of the land by the project specific Societies.

5.7 The legacy arrangements after the scheduled project duration may be mentioned. In case the project creates assets, arrangements for their maintenance and upkeep may be stated. (For example the project assets may be taken over and maintained by the State Government/PRIs; ULBs).

The Scheme will be implemented under the aegis of a Project Approval Mechanism headed by Secretary (Heavy Industry). All stake holders will be the members. The Mechanism will also undertake monitoring approvals and evaluating scheme with or without the professional help .

5.8 Whether the guidelines of Bureau of Energy Efficiency and other related guidelines for energy efficient buildings etc. have been considered/complied with.

While implementing/approving scheme components necessary conditions will be stipulated to ensure compliance of BEE guidelines.

5.9 Whether the project is secured against natural/man-made disasters like floods, cyclones, earthquakes, tsunamis etc.

Being Government scheme, as per the rules, the PPP partners will be given approvals requiring insurance of assets.

6. Project/Scheme cost

6.1 Please provide the project cost estimate for its scheduled duration along with a break-up of year-wise, component-wise expenses segregated into non-recurring and recurring expenses. It may also be indicated whether land is needed, if so whether which agency is providing for it, and in case the cost of land is to be booked to the project, whether it has been included in the estimates.

The scheme is in response to the recommendations of the Planning Commission Report of the Working Group on “ Capital Goods and Engg Sector” accepted as a part of the National Manufacturing Plan for the 12th FYP. The Report envisaged and investment of Rs 30,528 crore to take the production levels to beyond Rs 6, 80,000 crore at the end of the 12 th FYP. However a budgetary allocation of Rs 1,081.22 crore was made available. Therefore, the scheme proposes a set of guidelines, under which a number of proposals , will be invited , some approved and implemented. The guidelines, therefore, have been designed to attract proposals in high priority areas. It may be prudent to recall that the Report recommended setting up about 8 pre-competitive technology development centres, Technology Acquisition Programmes, Modernization Fund, 30 Industrial Infrastructure projects and transforming few PSUs to global levels.

The proposals will be invited based on the scheme guidelines. However, few initiatives have already been taken with IITs/ Industry Associations based on the Working Group Report, the following projections are made for utilization of funds.


Year Govt grant for Scheme Component (In Rs crore)Total Govt grant

2013-14 702014-15 3002015-16 3802015-17 331.22Total 1081.22

The above projections are based on progress made in planning and implementing following project components. However, it may noted that the proposal under consideration is approval of scheme and the scheme guidelines. Each of the project component will required to be proposed with DPR to a Project Approval Mechanism. At that stage more proposals , which are at various stages of preparation could also be considered. Those components, which could not be considered under the present BS, will be deferred to 13th FYP.

Illustrative Expenditure Proposals

( A ) Projects at Advanced stage)

Estimated expenses on Mode Project Cost

DHI component (90% maxm )

Industry component (10% minm)

1. R & D and Technology Development Centres of Excellence with IITs (e.g. 4 nos – Delhi, Mumbai, Chennai & Kharagpur)

Industry & Govt

200 180 20

2. (Machine Tools Industry) Integrated Park, (Tumkur)

Industry & Govt

400 150 250

3. (Construction) Equipment test cum product development centre

Govt 135* 135 0

4. Common Facilities Centres (Textile) Machines and others Engg Industries , Surat

Industry & Govt

56 50 6

5. Technology Acquisition Programme Govt 66.226. R & D Project for Super Critical technology

with BHEL , NTPC and othersIndustry &

Govt1020 500 520

Total 1811 1081.22 796

* Rs crore more in 13th FYP in Phase II.

( B ) Projects Proposals Received during last two years for hard interventions..

i. CMTI – Precompetitive Technology Development Centre – 8 nos – Rs 800 crore,ii. Plastics Machinery Manufacturers Association: proposal for “Common Manufacturing

facility - Foundry for Large Castings: Rs 200 crore,


iii. LMW led consortium proposal for Centre of Excellence for Textile Machinery Technical Development: Rs 100 crore,

iv. Indian Machine Tools Manufacturers’ Association Proposal for “ Common Facility Centre” at Tumkur : Rs 100 crore.

v. Plastics Machinery Manufacturers Association: proposal for “Common Manufacturing facility for Nitrided & Bimetallic Single Bore Barrels” : Rs 80 crore,

These proposals are also being developed by DHI with respective applicants.

Recently CII has proposed Consortium driven critical technology development Programme for 7 subsectors at the cost of Rs 1400 crore – Government contribution being Rs 700 crore. Further details in DPR form are being evolved.

Land costs are not proposed under grant in aid from the proposed scheme when implemented jointly with the Industry; otherwise included in those projects components like R & D and Technology Development centres implemented in conjunction with IITs and other Centres of Excellences. , since these facilities will be created directly by DHI as a part of Government functions.

6.2 Estimated expenditure on project administration (including expenses on consultants, etc.) may be separately indicated.

Under this scheme upto 2.5% of the project cost is estimated for project administration / management through appointed professional agencies.

6.3 The basis of these cost estimates along with the reference dates for normative costing may be provided. The firmness of the estimate may be indicated along with the cost components that can vary the factors that could cause the variation and the extent of the expected variation.

The basis of the cost estimates is the Industry Association inputs, Scheme DPR and Working Group report. These will be reaffirmed in the Feasibility Reports of each of the projects under the scheme. No escalation in grant in aid is proposed under any circumstances. Grantees will be obliged to bear the escalations, if any as one of the grant condition.

6.4 In case the project/scheme involves payout of subsidy, the year wise expected outgo, up to the last year of payout, may be indicated.

In the Scheme, no interest subsidy is proposed.

6.5 In case the project/scheme intends to create capital assets, employ specialised manpower or involves other activities that necessitate a Recurring Cost of Capital Expenditure (RCCE) (e.g. maintenance and upkeep costs of assets, salary costs of manpower, etc) over the lifetime of the asset, such expenditures, on an annual basis may be indicated in the project proposal.

The scheme guidelines provide to follow GFR and other GO in this respect.


6.6 It may also be stated whether the agency which would be assigned this legacy responsibility has been consulted and has agreed to bear the continuing recurring expenditure (e.g. the State Governments may need to incur the maintenance and upkeep costs of assets created under Plan schemes.

The scheme is for one time grants to entities for creating Technology Development facilities/ Common Industrial Infrastructure. The Scheme guidelines stipulate that further expenses must be met from their own revenue generations.

6.7 The cost towards salary/fees/emoluments of the project human resources as being proposed should be indicated (procedure for seeking approval of the human resource requirements is however detailed at para 7 below).

DHI will hire no additional manpower .

6.8 The component of the costs mentioned at 6.1-6.7, that will be shared by the State governments may be indicated.

Nil.

6.9 In the event of fund transfer being made to State Government/local bodies or other organisations, “grants for creation of capital assets” may be indicated separately.

Nil.

7. Project Human Resources

7.1 Please indicate whether the nodal officer directly in charge of the project has been identified. Details about his status, past experience in executing similar projects and balance tenure left for steering the project may also be mentioned.

Joint Secretary, DHI in charge of HE & MT. Required details are at Annexure III.

7.2 In case posts (permanent or temporary) are intended to be created, such proposal may be sent on file to Personnel Division of Department of Expenditure separately. Such proposals may be sent only after the overall project proposal is recommended by the appropriate appraisal body (SFC, EFC, etc.).

No posts are proposed to be created in Government of India.

7.3 In case outsourcing of services or hiring of consultants in intended, brief details of the same may be indicated. It may also be certified that the relevant GFR provisions will be followed which engaging the agency/consultant.

Upto 2.5% of the Central grants may be used for administrative and scheme evaluation Expenses on hiring outside project management consultants as per GFR provisions.


7.4 In case additional manpower requirement, please indicate the phased requirement over the project timeline (i.e year-wise breakup of the manpower requirement)

No additional manpower is proposed.

8. Project financing

8.1 The sources of financing for the project may be indicated. In case of project already included in the FYP, the specific earmarking may be mentioned. In case of any deviations from this quantum, the sponsoring agency may indicate how the gap will be addressed.

The source of financing of the scheme will be outlay approved for the 12 th plan and the annual budget allocations made. The projected scheme outlay of the 12th plan is indicated as under: PPP partners are expected to contribute about Rs.305 crore.Y2 Rs. 70 croreY3 Rs.300 croreY4 Rs.330 croreY5 Rs.311.22 crore

8.2 The availability of funds in the budget of the present year and the requirements projected may be mentioned. In case of any deviations, please indicate how the gap will be addressed.

Present year Rs. 70 crore. Requirement as in 8.1 para. No gap.

8.3 If external sources are intended, the sponsoring agency may indicate whether such funds have been tied up. In case firm commitment is not available, alternate plans for arranging funds may be indicated.

Not applicable

8.4 Whether the funding requirements have been fully tied up with Planning Commission may be indicated.

The Planning Commission has given in principle approval to the Scheme and an outlay of Rs.1081.22 crore has been earmarked for the Scheme for the 12th Five Year Plan.

9. Project viability

9.1 In case of projects which have identified stream of financial returns, the financial internal rate of return may be calculated. The hurdle rate is considered at 12%.

It is proposed to provide grants to create industrial and technology infrastructures. The facilities so needed are expected to self-sustain their expenditures during end of 13 th FYP, due to long gestation heavy investments and picking of service delivery.


9.2 In case of projects where financial returns are not readily quantifiable (typically social development projects), the economic rate of return may be estimated.

The Government gains are expected from tax collection in incremental production. The estimated incremental products is 5% of proposed turnovers of Rs.300,000 crore every year. The expected from collections are 15% of the turnover. That is in during 12 th FYP incremental from collections of Rs.4500 crore are estimated due to the proposed expected turn of Rs.1081.22 crore.

10. Project implementation and monitoring

10.1 The administrative structure for implementing the project may be stated. In case new structures/entities etc. is by and large to be avoided. In case new structures are intended to be created for administering the scheme, the details of such structures and specific justification for the same may be provided. Such new structure should be proposed only it is has been established after due analysis, that existing structures cannot be levered for the proposed/additional work.

An Apex Project Approval Mechanism headed by the Secretary (HI) will be formed. AS & FA , JS (HE & MT) , MSME, DIPP, DST, HRD, Labour and Industry are proposed as other members. Experts will be co-opted.

Joint Secretary dealing with the Capital Goods Industry in the Department of Heavy Industry is proposed to be the Member Secretary of the Approval Mechanism.

10.2 A flow chart for the intended fund flow mechanism may be indicated. Funds flows for all schemes/projects in states should ordinarily be through the State Government.

Fund Flow Diagram


Government Budgetary Support

Department of Heavy Industry

DHI Apex Mechanism for Projects Approvals, Monitoring and scheme evaluation

10.3 The monitoring framework for the project/scheme may be indicated. The arrangements for audit of the project may also be stated.

The monitoring of the projects sanctioned under the scheme is proposed to be done through the HE and MT section in DHI.

A web enabled monitoring system would be developed by the department.

The Project Entities shall furnish quarterly progress reports on the implementation of the project in the first week of the following quarter without fail stating clearly financial as well as physical targets approved viz-a-viz those actually achieved in quantitative and qualitative terms.

Also the project could be verified through field visits of DHI appointed Committees. Financial control would be made through tripartite TRA Bank Account.

The Project Entity would maintain a register of permanent and semi permanent assets required wholly or mainly out of the grant in the prescribed format and copy thereof should be furnished to this department. Assets acquired wholly or substantially out of central grant shall not be disposed of without approval of the department.

The accounts of the Project Entity shall be open for inspection by the sanctioning authority and audit both by the Comptroller & Auditor General of India under the provisions of C&AG (DPC) Act, 1971 in accordance with the provisions laid down in Section 14 of the C&AG (DPC 1971) as amended from time to time and internal Audit Party of the Principal Accounts Office of this Department whenever it is called upon to do so.

DHI will appoint independent Project Inspection/ Evaluation Consultants.

Mid-term and term End Evaluation of the Scheme including assisted projects will also be undertaken as per the Guidelines of the Planning Commission.

11. Project/scheme sensitivities

11.1 Any foreseeable constraints/uncertainties which can affect the technical design, costing and implementation of the project may be indicated.

o Their Cost escalations,o Facility Utilization,o Industry intra- disputes,o Policy impacts,


Project Entity

o Global economic impacts,o Natural Disasters,

11.2 The likely impact of these constraints/uncertainties on the project parameters may be stated. In particular, the sensitivity of the project cost, project schedule and project viability towards the possible constraints/uncertainties may be mentioned.

An explanatory note is required.

12 Project period

12.1 The expected date of project completion may be stated. This should be realistic and supported with PERT chart of the important activities, with a critical path analysis, identifying the main constraints.

PERT with Critical Path Analysis attached. 12 th FYP Plan end date is the project completion date as projected.

12.2 The project closure date should be also indicated beyond which further government support/disbursal of funds will not be required.

With the end of 12th FYP.

12.3 A time line for the project deliverables (i.e. measurable deliverables phased year-wise) may be included.

Attached as a part of PERT.

13. RCE proposals

13.1 Details of physical progress achieved and expenditure incurred and commitment made so far may be given.

Not applicable.

13.2 Date of latest approved, revised and proposed completion schedule of the project along with time overrun and reasons thereof may be elaborated.

Not applicable.

13.3 Item-wise cost variance between approved (latest) cost and revised cost as propose may be given.

Not applicable.

13.4 Reasons of increase in cost may be given in the following manner


(a) Price escalation(b) Foreign Exchange variation(c) Statutory levies(d) Change in scope(e) Addition/deletion(f) Under-estimation(g) Others (to be specified)

New Scheme. Not applicable.

13.5 The underlying justification for increases in cost due to various factors may be explained.

Not applicable.

13.6 Effect of revision in capital cost estimates on cost of production and profitability/viability with reference to earlier approved capital cost of the project.

Not applicable.

13.7 Report of Standing Committee to fix the responsibility for cost and time overrun along with action taken report on its recommendations may be appended with the EFC/PIB memo.

Not applicable.

14 Suggestions of IFW

EFC Note has been examined by the AS&FA in the IFW and the comments are as under:


Annexure:Summary of Recommendations of the Working Group Report

Major Recommendations of the Planning Commission Working Group on Capital Goods & Engineering sector

1.Increase value add in India

(i)Indigenous Technology Development

• An High Level R & D Promotion Body to be set up

• Establish Pre-Competitive Technology Development Centres - PTDCs, ICPs and CFCs

• Providing interest rate subvention for modernization, expansion and technology transfer

• Strengthen existing institutions e.g. CPRI, CMTI & set up additional testing facilities

• Local manufacture of critical components and raw material (CRGO)

• Preferential treatment in Government procurement process to indigenous innovative products

• 5% of the procurement budget of government buyers for risk-sharing Development Contracts

• Duty free imports for R&D projects

• Comprehensive methods which weigh technical merit and other technology-related factors in technical and price evaluations of indigenous innovation products

(ii)Incentivizing/ mandating local value addition

• Large value imports to stipulate mandatory local value addition of 30% minimum, along with transfer of technology to an Indian company via JV/JWA

• Tax holidays for wholly-owned subsidiaries, JVs & overseas companies setting up production base in India with a Phased Manufacturing Program leading to 75% local content over 3 years

• Preferential tax treatment for companies using equipment manufactured in India for example tax rebate for domestic procurement by EPC companies

• Higher depreciation at 25% on machinery manufactured in India

2.Substitute imports

(i)Regulatory mechanism for 2nd hand goods

• Complete ban or restrict import of all second hand machinery

• Capital interest subsidy to be provided for import of new machinery not made locally


(ii)Regulatory mechanism for FTAs/PTAs

• Suitable regulatory apparatus to prevent misuse of FTAs

• Effect on domestic manufacturers to be analyzed before any future agreements

• Impose mandatory 40% value addition in the case of import through 3rd country

(iii)Tax structure rationalization

• Withdraw CENVAT credit for imported machines

• Abolish Octroi charges for domestic machines

• Reduce excise duty from 10% to 8%

• Reduce customs duty to nil on critical components & raw material

• Provide tax exemption to deemed overseas revenue

• Revoke zero duty exemption schemes for project imports

• Exempt supplies made against global tenders with Custom Duty exemption from payment of Excise duty and VAT

3.Promote exports

(i)Export Financing

• Competitive Long Term Financing for domestic exporters

• Supplies against Indian Line of Credit/ Grant

• Export Incentives under Served From India Scheme, Focus Market Scheme, Focus Product Scheme extended to capital goods sector

• Pre-shipment and post shipment Credit be given

• Export incentives to offset local tax

(ii)Market/Brand Development

• Market Development Assistance (MDA) Scheme should be extended to project exporters/ large enterprises to provide incentives for the development of new markets

• EEPC to promote the “Made in India” brand for capital goods exclusively by setting up Showroom and Technology Centres at important locations abroad.

• Promote participation in international trade fairs and exhibition


4.Build Indian champions

(i)Global Champions- Create an environment for Export Competitiveness for BHEL & BEML

• Export Line of credit

• PSUs as a nodal agency for all projects under LOC/ all Government aids

• PSUs to be empowered for letter of Commitment from GOI to secure the projects

• Rate of interest offered against lines of credit to match those offered by other countries and World Bank or IMF

• Utilize opportunities where Indian Companies/PSUs/GOI are buying in bulk various commodities (e.g. urea, oil) which can be leveraged against supply of engineering projects

(ii) National Champions- Import Substitution

• Assess and consolidate domestic demand , help create new domestic capacity

• Identify & forecast emerging technology

• Develop technology in select identified areas

• Resolve disadvantage to domestic players

• Network development with user industry

5. Skill Development

Adoption of it is by industry to meet its skill requirements

Setting up of CG Skill Council


Overview of capital Goods Industry

The Capital Goods sector consisting of machinery manufacturers has a turnover of Rs 1,85,000 crore ( 3.55% of GDP of Rs 52,02,514 crore ) in 2011 -12 against a demand of Rs 2,67, 000 crore. The imports are at Rs 1,16,000 crore ( 43.5% of demand and 62.7% of production). Exports are a Rs 34,000 crore ( 18.4% of production).

Production Rs. Crore 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13Machine Tools 2028 2579 2853 2138 3246 3624 4299 3700Plastic Machinery 620 745 871 1333 1519 2403 2917 2000Earthmoving & Mining Machinery

5356 6972 13718 14603 16469 16500 18000 16600

Metallurgical Machinery

720 981 1039 1315 989 1129 1300 1100

Textile Machinery 4402 5753 6155 4063 4245 6150 5280 5500Process Plant equipment

9988 11237 12642 14222 16000 18000 19861 17000

Dies, Moulds & Press Tools

7396 8473 9725 11058 11080 12485 13421 11500

Heavy Electrical Equipment

56784 64813 75416 81815 93187 110000 120235 12800

PRODUCTION TOTAL 87294 101553 122419 130547 146735 170291 185313 185400IMPORTS TOTAL 30587 39069 45117 56975 53427 83929 116004EXPORTS TOTAL 15718 18285 20835 28680 23832 29403 34222DEMAND TOTAL 102163 122337 146701 158842 176330 224817 267095

Source: Planning Commission Working Group Report on “Capital Goods & Engg Sector” , Industry Associations and import export data bank of D/o Commerce

Despite registering growth in production during the last 5-6 years barring for the year 2012-13. No growth is recorded, the capital goods industry has not been able to meet the entire requirement of the user industry and the demand-supply gap is increasingly being filled through imports. As may be seen that Net Domestic Production ( value added) is registering losses to imports.

The import intensity of capital goods industry is very high. The imports contribute to about 43% of the market size of the capital goods industry. During the year 2011-12, production of capital goods industry was about Rs. 1,85,313 crore and imports were Rs. 1,16,004 crore ( ratio 62.6%).

The imports of the capital goods have shown dynamic growth increasing from Rs. 30,587 crore during 2005-06 to Rs. 1,16,004 crore during 2011-12 registering a CAGR of 30.6%. The exports have also increased during the period from Rs. 15,718 crore to Rs. 34,222 crore. However, capital goods industry continues to be net importer.

The import intensity leads to large scale foreign exchange outflow and loss of investment and employment opportunities in the country.

Inadequate supply of indigenous machinery and equipment also adversely affects the competitiveness of the user manufacturing and infrastructure industries as they have to resort to imports at relatively higher cost. Thus, the weak capital goods industry is affecting adversely the growth of the user manufacturing industries also.


China has emerged as a manufacturing giant during the last two decades and manufacturing contributes about 30% of it’s the total GDP. One of the reasons for accelerated manufacturing activity has been a strong capital goods industry. In Thailand , manufacturing contributes 36% to GDP. The value added by manufacturing sector in China is US 1,923 billion in 2010. The average growth rate of manufacturing sector in China is 10.3% during 1999 -2009 , which is higher than its average GDP growth of 9.9%. In India , the manufacturing growth legs at 6.8% to GDP growth at 7% during the same period.

In India, manufacturing is stagnating in the range of 15% of the GDP. The growth of GDP in India is led by service sector. However, growth in manufacturing is essential for a country like India where the unskilled population can only be absorbed by the manufacturing sector for higher income.

The Govt. is targeting average growth of 8% of GDP during Twelfth Five Year Plan. To achieve this growth, manufacturing has to grow at a rate of 12-14%. This is because of drag effect of agriculture sector ( around 4-6%).

The capital goods industry contributes around 12% to the manufacturing activity and provides critical input, i.e., machinery and equipment to the remaining sectors covered under the manufacturing activity.

The strengthening of capital goods sector would not only make the capital goods sector internationally competitive but the collateral benefit would be increasing the competitiveness of the user manufacturing industry in terms of increased availability of indigenous machinery. This will result in overall growth of the manufacturing activity in the country and its share in GDP.

Without the scheme, the industry will further lag behind in Technology. It may close down further. Nno FDI/collaboration will come and import dependence will increase tremendously and adversely affect the indigenous capital goods industry and user industries in terms of closure of units, loss of employment, loss of investment and affecting the social fabric of the country.

It is proposed to focus on seven key sectors of the capital goods industry, which contribute to about 55-57% of the total production of the capital goods industry under the scheme. Though facilities like Technology Centre of Excellence will cover entire Capital Goods Sector, Industrial Parks & Common Facilities are limited to these seven key sector in this and next FYP. It is important to mention that Heavy Electrical Machines is the most important sector of the seven and accounts for 69% alone. The sectoral profiles of important components of the Capital Goods Sector are indicated as hereunder:

Sectoral Profiles and Challenges:Sectoral Profiles and Challenges:a) Machine Tools

India’s share of machine tool production is at present only 0.8% of world production. The

machine tools sector of India ranks thirteenth in production and seventh in consumption of

machine tools in the world. Machine tools form 1% of India’s engineering industry and

contributes 0.3% to the GDP

Over the years Indian industry is increasingly importing machine tools. At present, about 65-

70% of the requirement of machine tools is met through imports.

The domestic production is about Rs. 4,299 crore in 2011-12 come down to Rs.3700 crore

during 2012-13, imports during 2011-12 period are estimated to be Rs 7,645 crore and the

total consumption in India is estimated to be Rs. 11,764 crore.

There are 8-10 large companies (turnover above Rs. 100 crore), 10-15 medium companies


(50-100 crore) and rest are small. HEC and HMT are two CPSEs in the machine tools

sector.

New investments have been few, either green field or for modernization. The large industrial

houses did not venture in this field but opted out due to low returns on investments.

The Working Group has identified major issues as small unit size, old technology , no

access to technology development, demand side issues, taxation and trade policy issues

and absence of a coherent approach.

Measures indicated in the Working Group Report and also in the 12th FYP Document are:-

o Define a National Mission for Machine Tools (similar to China)

o Introduce immediate fiscal incentives

o Mission to indigenize critical mechanical elements and machine tool electronics

d. Measures to attract investment are a priority

o Creation of modern state of the art capacities typically through cluster parks and

common facility centres

o Realize full potential of PSU capacities

o Fillip to R&D and technology development is essential h. Industry-academia-

R&D linkages

The scheme proposes pre-competitive technology CoE, common facilities, integrated

machine tools park, etc. for the sector.

The proposed scheme would enable the machine tool sector to upgrade its technology box

and expand its capacity& value chain and also invest in R&D for meeting the domestic

demand and also improve its export performance.

b) Textile Machinery: The product range of Indian textile machinery manufacturers include machinery required for

sorting, cording, processing of yarns / fabrics and weaving along with components, spares

and accessories.

There are about 1446 units engaged in the manufacture of machinery and spares out of

which 598 units are manufacturing complete machinery. This sector has a capital

investment of approximately Rs. 6900 crore and an installed capacity of Rs. 8000 crore per

annum.

The capacity utilization during the year 2011 – 2012 was 67% in comparison to 55% during

2010-2011. The size of the industry is likely to grow up to Rs. 10,000 crore by 2016-17 .

The sector has registered a de-growth in production from Rs 6155 crore to Rs 5280 crore in

201-12. The production of textile machinery industry has been fluctuating.

The import intensity of textile machinery industry, however, is very high. During the last 5

years, textile machinery industry has been able to meet the domestic requirement to the


extent of 50% only. The sector suffers from secondhand imports.

The textile machinery industry has not been able to keep pace with the demand of textile

machinery, particularly, the state of the art / near state of the art machinery eligible under

TUFS for textiles.

The major issues faced by the sector include technological weaknesses in terms of

metallurgy, automation and electronics, R&D, energy and water consumption efficiency and

overall reliability.

A number of high tech textiles machines are not produced locally therefore imported. The

list includes Complete line for production of polyester staple fiber and filament yarn ,

Spinning (Rotor spinning, Automatic winding ), Weaving (high speed shuttleless weaving

machines such as air jet, rapier and water jet ), Knitting (High speed circular and

computerised flat knitting machines ) and Garmenting (Pre-production -cutting, sewing and

finishing machines Technology ). Indian competitiveness for exports of textiles suffer as a

result of this.

This makes it imperative to take immediate measures to assist the textile machinery

manufactures to gear up for such a growth, as otherwise, foreign made products would

capture the market.

The proposed scheme would enable the textile machinery industry to modernize, upgrade

and expand its capacity and also invest in R&D to produce high-end machinery for meeting

the domestic demand and also improve its export performance.

c) Heavy electrical equipment

Heavy electrical and power plant equipment constitute the main elements of the capital

goods sector. The market size is around Rs. 1,21,000 crore, growing at about 14%.

Two distinct segments are power plant equipment (mainly including boilers, turbines,

generators - BTG) and electrical equipment for power transmission and distribution

(power transformer, distribution transformer, switch gears, insulators, capacitors).

The major power addition programmes, Restructured Accelerated Power Development

and Reforms Programme (R-APDRP) and Rajiv Gandhi Vidyutikaran Yojana (RGGVY), and

transmission projects have been major drivers of growth in electricity

generation/transmission and the corresponding growth in equipment industry.

With increase in the requirements for meeting the planned additions and a shift towards

setting up higher efficiency super critical power plants in the country, the Indian domestic

manufacturers have formed joint ventures (JVs) with foreign companies and are

focusing on manufacturing higher efficiency equipments. Simultaneous with setting up

of joint ventures for manufacturing, a key development has been domestic power

developers contracting with Chinese equipment suppliers.


India’s imports of electrical equipment were at INR 75,057 crore (US $ 15.67 billion) in

2011-12, which has increased at a CAGR of 30.30% during the last five years. India’s import

duties on most of the products are low (BCD 7.5%) and are being further lowered under

various FTAs signed by India. China’s , who has now excess manufacturing capacity,

share in Indian imports of electrical equipment has dramatically increased in the last few

years – from 15.3% of the total in 2005-06 to 44.5% in 2011-12. Imports from China have

grown at a CAGR of 57.5% in the last six years.

The domestic industry has expressed concern about the lack of capacity utilization in BTG

segment. Power transmission and distribution equipment industry, though it regained growth

in the range of 11-14% in last two years, has a capacity utilization in the range of 70-80%.

Capacity utilization is a major issue.

Support to this sector needs less justification given the power demand situation in the

country and the conditions of the State Electricity Board. Since the industry is directly or

indirectly depending upon the SEB’s for business, it is putting undue stress on the sector

which needs to be supported

Except for the large players in the sector, other players have capacity available with them

for a limited product range. Given the power demand situation in the country, if other

manufacturing related issues are addressed, the capacity utilization of these firms could be

much higher.

The proposed scheme would enable the sector to modernize, upgrade and expand its

capacity and also invest in R&D to cater to projects, which are critical for meeting the

demand supply gaps.

d) Mining and construction equipments The earth moving and mining equipment market size was about Rs. 18,000 crore in

2011-12. About 20 MNCs have set up these units in India. Production and import are of

approximately the same level i.e. Rs. 9000 crore.

The construction equipment industry (CEI) in India enjoys a positive long term outlook.

Planned investment in infrastructure (more than US$1 trillion) and growing urbanization

will drive the construction industry to grow at 16-17 percent CAGR over the next 10 years.

The attractiveness of the Indian market is accelerating the entry/expansion of global OEMs,

which will increase the competitive intensity in the market. The growth opportunities are

accompanied by increasing competition from equipments from countries like Brazil and

China.

The sector has evolved over the years and is at present in an intermediate stage of

development. The technology available in the country has the pedigree from the

international majors due to technical collaborations in the past. Some products


manufactured in India by some of the MNC’s who have set up assembly plants in India are

meeting the global standards.

It is estimated that the domestic content is nearly 78% in standard equipment whereas the

domestic content is about 35% in high technology equipments.

Over the years three Chinese companies have emerged as leading construction equipment

manufacturers among the top ten in the world. In key product categories, e.g. wheeled

loaders, Chinese imports have cornered a 12 per cent share of the market.

Second hand and bad quality imports are of great concern.

Competition is likely to intensify as many Chinese players have improved their distribution

and after-sale networks in India. A Couple of Chinese Companies have set up the units in

the country. Companies from China and Korea are also expected to provide competition to

India-based construction equipment exports to developed markets.

The mining sector is now graduating into utility of high-end technology products

especially in institutional sector world over including India. High end technology is required

for large size dump trucks, excavators, shovels, walking draglines etc. Such technology

is not available in India and MNCs/Technology providers demand high Transfer of

Technology fees for providing access.

The sector has excellent potential in view of ambitious plans of investments in mining,

constructions and such other sectors.

The Working Group has recommended the following

o Emission standards must be made applicable to earthmoving equipments etc.

o To take initiatives for indigenous development of certain equipments like dredgers to

achieve self- reliance in this area

o Bharat Earth Movers Ltd. already manufactures these equipments and has

competence in manufacturing high end technology products to be strengthened to

emerge as prominent players in this segment. The PSU need to be, inter alia,

strengthened and need to be provided support for transfer of technology through the

diplomatic route.

The proposals in then scheme relates to creating testing facilities for mandatory

standards and product development as well as used as chick substandard machinery

import.

e) Process plant equipment Process Plant Equipment manufacturing is complex in comparison with other manufacturing

process as they are slightly integrated in nature and have to take into account external sensitivities depending on the process. Some of the applications of this sector are by and large observed in industries such as

oPetroleum & Petroleum Products Industry


oChemicals and Fertilizer IndustryoCement & Steel IndustryoPlastics & allied products oFood & Agro based Industry

There are over 200 units engaged in the manufacturer of process plant machinery in the country out of which 65% are small & medium manufacturers.

The sector turnover is estimated to be 19,861 crore in 2011-12. The sector enjoys modest growth of 11.9% during 11th FYP.

The sector has excellent outlook, given the planned as well as private investments in energy, industry, consumer, construction and infrastructure sectors.

The domestic production in Process Plant equipment Sector is expected to grow to Rs 35000 Crore by 2016-17 with a CAGR of 12%.

The sector requires techno logy upgradation. Other than manufacturing technologies, the technologies to improve business performances like productivity increase etc are to be considered.

At operational level, Welding, Forming, Machining technologies could be improved to a certain extent. Capabilities on Process Engineering and unit operation system to have independence from overseas licensors and to chart out our own growth strategies are seen as enablers for driving self sufficiency in this sector.

oTarget technologies to be developed are:oSub Sea EquipmentoOil well drillingoProcess gas Boilers for Ethylene and Gas Crackers

The products development Centers planned in the present scheme will be instrumental to address the identified technology gaps.


Annexure II(Please see Para 5.1)

GUIDELINES OF THE SCHEME ON “GLOBAL COMPETITIVENESS OF INDIAN CAPITAL GOODS SECTOR” FOR ASSISTANCE TO COMMON TECHNOLOGY DEVELOPMENT AND SERVICES

INFRASTRUCTURE

1. BACKGROUND

1.1. The Indian Capital Goods sector is strategic to manufacturing value chain. Technology levels of CG sector determine process technologies used in the Indian manufacturing, thus its global competitiveness to a large extent. India is at threshold, wherein, if supported the Indian Capital Goods industry go global soon, or else India will continue to become increasing World dumping ground for second hand machines and largest importer of machines and components.

1.2. The sector consists of about 25 types of different machines. Seven prominent sub sectors are:-

(i) Machine Tools

(ii) Textile Machinery (including Jute machinery)

(iii) Heavy Electrical Equipment

(iv) Mining & Construction Equipment

(v) Plastics Machinery

(vi) Metallurgical Equipment

(vii) Process Plant Equipment

1.3. At present the prominent sub -sectors have a demand of Rs 2,67,000 crore, out of which domestic production is Rs 1,85,000 , exports are Rs 34,000 crore. However, the imports are Rs.1,16,000 crore. The sector directly employs 1.4 million skilled industrial workers and officers.

1.4. The Department of Heavy Industry promotes the development of Capital Goods Sector in the country with the objective of creating vibrant and technologically advanced manufacturing in India. .

1.5. The Prime Minister’s Group in its Report (PMGR) identified capital goods as one of the sectors that is strategic for strengthening national capabilities for the long term. The PMGR has recommended that a time-bound action plan should be prepared in each of these areas for building high class modern capacities with R&D facilities, appropriate programme to encourage growth and development of these areas in the private sector together with Industry strengthening of the existing public sector and revisiting the existing policies to protect and promote selected capital goods industries.

1.6. Industry has been demanding modernization of the Capital Goods sector at all forums for past five years. Indian Capital Goods Sector presented a comprehensive study of the sector few years back. The study brought out the need for modernization.


1.7. DHI, in association with Indian Capital Goods Sector, had conducted a study to develop a road map and scheme for modernization of the capital goods sector.

1.8. The Working Group formed under the aegis of the Planning Commission on the sector also recommended the modernization needs of the Industry. The 12th FYP document also attached significance to the capital Goods sector as strategic sector.

2. THE MAJOR CONSTRAINTS, THEIR IMPACT ON THE INDUSTRY & PROPOSED MITIGATIONS STEPS:

2.1 Lack of Technology upgradation & Modernization – The current level of technology is not contemporary. The large firms are able to modernize to some extent, but are dependent on vendors for supply of components. Since the vendors are not cost competitive due to lack of modernization, the competitiveness of the large firms is also eroded.

2.2 Lack of Cutting Edge Technology – Without institutional R & D support, Capital Goods units are unable to develop and adopt cutting edge technologies. This erodes their global competitiveness.

2.3 Lack of Research & Development Support – The capital goods industry is a knowledge based industry which requires constant R&D efforts to produce state of the art machinery to meet the growing demands of the user industry. However, due to the non-availability of sustained R&D support from institutions, experts, and in house R&D capabilities of the Capital Goods sector, the industry is out of pace with modern technology.

2.4 Lack of Skilled Manpower – Primarily due to service sector absorbing a majority of technical manpower graduating from institutes like engineering colleges, manufacturing sector including Capital Goods sector is suffering from non- availability of trained manpower. Secondly, the quality of institutional output is not what is needed by the industry in sectors like R & D, design, product development, technology development & modernization, manufacturing processes etc.

2.5 Lack of Level Playing field : Import of Capital Goods is easier and less expensive. Open trade policy has turned India into second largest importer of Capital Goods after China. Adverse policy regime creates unfavourable environment for technology upgradation and also domestic production. Imports are cheaper due to zero duties under FTA or special provisions and additional statutory duties like sales tax, entry tax, octroi, VAT and other local duties levied on domestic manufacturing of Capital Goods.

2.6 Import of Second hand Capital Goods : Second hand capital goods are allowed to import freely in India without any technical barrier. Capital Goods is the largest manufactured commodity in India’s import basket. This hinders capacity utilization, modernization, investments and growth.

2.7 Infrastructure constraints in terms of unreliable power and its high cost, port congestion and high turnaround time, high cost of fuel and poor road connectivity of ports / airports with hinterland leading to higher transportation cost and high cost of money adversely impact global competitiveness.


2.8 The above situation has resulted in India becoming largest market for import of capital Goods in the World , while domestic capacity after upgradation can produce the same.

2.9 Without the scheme, the imports will continue to increase and adversely affect the indigenous capital goods industry and user industries in terms of closure of units, loss of employment, loss of investment and affecting the social fabric of the country.

2.10 The scheme will encourage investment in technology upgradation, skill development and augmentation of modern manufacturing capacities for holistic growth of the industry. The technology upgradation of the SMEs will enable the large firms to get adequate support from small vendors in execution of large orders expeditiously.

2.11 The scheme proposes to mitigate the impact of the some constraints and to enhance the competitiveness of the capital goods industry enabling it to withstand the import penetration and increased exports. The scheme will offset the global disadvantages to a large extent. Most importantly, the scheme envisages actions in synchronization with 12 th FYP for rejuvenating growth in manufacturing sector.

2.12 The proposed scheme envisages Govt investment of Rs 1081.22 crore during 12 th FYP. Most of which is proposed to create permanent technical services & common facility centres.

3. SCHEME ON “ GLOBAL COMPETITIVENESS OF INDIAN CAPITAL GOODS SECTOR FOR ASSISTANCE TO COMMON TECHNOLOGY AND SERVICES INFRASTRUCTURE

3.1 The Scheme envisages financial assistance to new and existing institutions for setting up and strengthening the technology development and common manufacturing / services infrastructure.

3.2 The overarching objective is to make the domestic Capital Goods Sector globally competitive.

3.3 The present structure of the Indian Capital Goods industry started to take shape in the hands of private techno-entrepreneurs after liberalization of 1991. However, size of the units being small, they could not keep pace with the technology modernization.

3.4 National priorities with sectors like textiles, highways, steel, fertilizers etc and external trade relations resulted in a regime of free and cheap imports of capital goods.

3.5 This blocked modernization, capacity addition and new investment & technology induction of Capital Goods Sector.

3.6 India became the world’s top market for Capital Goods with unique feature of access to second hand capital goods.

3.7 Manufacturers of Capital Goods elsewhere preferred export to India being more profitable, rather than making investments in India. They did not transfer their technologies to India. Import


of Second hand capital goods in India made the situation more difficult for Indian manufacturers of Capital Goods.

3.8 Facing similar situation of technology denial by EU, USA and Japan, few years back China, Taiwan and South Korea embarked upon huge national programmes for machine building based on creation of local technology development capabilities. They started with localization of machine and component manufacture . Then they upgraded to development of own technology and products. Today they are major exporters of Capital Goods.

3.9 The proposal is the first step and is in coordination with objectives of the National Manufacturing Plan to increase “depth in manufacturing through technology”.

3.10 These Product and Technology Development Centres (PTDCs)can be created in a number ways. e.g through establishing Centres of Excellences for integrated Technology Development for identified Sub-sectors in IITs/ IISc/ NITs/ other educational institutes alone or in consortium with user industry and other Technology Institutions abroad such as Fraunhofer Institutes of Germany , University of Aachen, Tokyo University, MIT etc. These Centres will development technologies through:-

/ in consortium with users / industry, other stakeholders and knowledge providers, Sponsored projects in India and abroad ( part), Contractual R & D and Technology Deployment, Purchase or licensing of IPR/ technology for further development/ indigenization, Hiring or contracting experts from industry in the Centres at the institutes, Technology problem solving for SMEs, Providing Technical Consultancy to a unit or group of units, International or bilateral technology development, Other methods considered by the Joint Steering Mechanisms.

Further guideless are at Para 4 onwards.3.11 It is expected that a number of technology gaps would be filled using indigenous efforts for

technology development, particularly in the field where India has restricted approach to technology transfer.

3.12 The second type of facilities is Common Facilities Centre (CFCs)for testing, product design, manufacturing, environment management and like. The proposed technology and common facilities intervention in the machine tools sector will have cascading impact of upgrading technologies in other machines and manufacturing sector. Testing of Earth Moving, Construction and Mining machines is soon to be mandatory and is a sovereign function. Technology upgradation of textile machines has important bearing on Indian textile sector and is much needed. Further guideless are at Para 4 onwards

3.13 Technology Acquisition Programme (TAP) for Indian Capital Goods Sector is another strategy form technology modernization proposed in the scheme. Under this individual and consortium efforts will be promoted by providing capital subsidy. This tool is well targeted towards the technologies which are available for transfer / licensing/ acquisition/ IPR exploitation. Guidelines are in the following Paras.


3.14 TAP objective: Indian Capital Goods Sector is facing urgent needs for technology upgradation to be at par with imported goods in terms of functionality, quality and life-cycle value. Therefore, we need to seriously explore the opportunities for accelerated technology upgradation through appropriate technology assessment and acquisition in relevant areas. The Government can play a key role to support the Capital Goods Sector in its efforts towards technology upgradation, by providing an enabling environment and de-risking the heavy investments necessary by the industries. Establishment of a dedicated Technology Acquisition Programme (TAP) is a prerequisite for this. The Fund can help our Capital Goods Industry to acquire and assimilate specific technologies, for achieving global standards and competitiveness within a short period of time.

3.15 TAP scope: The TAP will provide financial assistance to Indian Capital Goods Industry, through appropriate funding mechanisms, in order to facilitate acquisition of strategic and relevant technologies and also development of technologies through contract route, in-house route or through joint route of contract and in-house. The Fund can extend partial support to industry to enhance their technology level, for achieving superior product quality / functionality, production capacity, safety and sustainability performance.

3.16 TAP coverage: The TAP will cover all industries dealing with machinery/machine components and categorized under Capital Goods Sectors (e.g., Machinery/Equipment relating to Electrical, Textiles, Process Plant, Power Equipment, Construction & Earthmoving, Machine Tools, Metallurgy etc.). Product & Technology Development Centres, set up or planned to be set up by Industry Associations under specific sub-sectors of Capital Goods (e.g., Plastics Machinery, Machine Tools, and Textile Machinery etc.), will also qualify for assistance from TAP.

3.17 TAP eligibility: Financial support from the TAP will be available to Indian Capital Goods Sector unit or their consortium. The prospective applicants should have proven technical, financial and marketing background.

3.18 TAP applicability: Financial assistance from the TAP will be extended only to specific projects and activities, which involve technology assessment, acquisition and assimilation. A comprehensive “Technology Gap Analysis” is required to be performed by the applicant Industry to justify the need for such projects and the expected benefits. Alternatively the Technologies could be from the gaps identified in the Planning Commission Working Group Report for the 12 th

FYP for the Indian Capital Goods Sector. The recipient Industry/consortium will need to submit detailed project proposal and action plan to demonstrate that the financial support will ultimately lead to enhancement of technology level, product standard, quality, performance and competitiveness in a time-bound manner. Funding for the following typical activities can be provided, with appropriate limits:

Technology Evaluation / Assessment Studies, with objective of selecting the right technology for acquisition


Outright purchase of Technology / Know-how from Technology Owners Royalty payment to Technology Owners Purchase of hardware / software for process improvement and upgradation Upgradation of production / testing facilities Training of workers / operators for skill building in acquired technology Setting up of Product or Technology Development Centres by Industry Associations /

Clusters within Capital Goods Sector3.19 It is envisaged that the TAP will accord priority to projects that seek technology upgradation by

Capital Goods Sector to cater to areas of national interest, e.g., Energy, Infrastructure, Transportation, Water Management, Environment and Sustainability Solutions, but need not be limited to these areas.

3.20 TAP AMOUNT OF FUNDING: The following channels of financial support are available to MSMEs and mid-size companies whose investment in plant & machinery do not exceed Rs.15 ( Small Scale ) /200 ( large scale) crore who are engaged in manufacturing activity of Capital Goods or its parts/assembly :

MSME Large IndustryCapital Subsidy of 25% subject to the limit of Rs 5 crore in case of individual industry

Capital Subsidy of 25% subject to the limit of Rs 25 crore

Capital Subsidy of 25% subject to the limit of Rs 20 crore in case of consortium

Capital Subsidy of 25% subject to the limit of Rs 50 crore for large industry consortium

3.21 TAP TERMS & CONDITIONS:

The TAP will be in linked to stages of Technology development in 30% - 40% - 30% ratios . The first will be on matching expenditure. Second on demonstration of technology development, Third on commercial prototyping.

4. ASSISTANCE UNDER THE SCHEME FOR TECHNOLOGY DEVELOPMENT & COMMON FACILITY CENTRES & INDUSTRY PARKS

4.1 Assistance to National institutions formed as not for profit societies ( or equivalent) for Pre-Competitive ( Common) Technology Development and Services Infrastructure in Capital Goods Sector.

4.1.1 Eligible facilities : Assistance may be provided under the scheme for creation or strengthening/expansion of technology development and common services infrastructure such as:-


i. Pre-competitive Technology cum Products Development Centres with Specified Plant & Machinery (Only those technologies and products which have been identified as gaps and needs in the Planning Commission Working Group Report on : Capital Goods & Engg Sector) - target : at least two during 12th FYP) and / or

ii. Common Facilities Centre including Common Industrial Infrastructure (Only those common services which have been identified as gaps and needs in the Working Group Report - target : at least three during 12th FYP) consisting of one or more of :-

Testing and certification facilities including safety related development,

Training and skill infrastructure for conducting training programmes funded by industry ( Govt reserves right to allocate to the applicant a part of skill targets under National Skill Development Policy i.e. 500 million by 2022 relevant to the facility and as needed by Capital Goods sector),

Design/ Process/ Product development / Re-engineering/ Rapid Prototyping including 3 D printing facilities,

Quality and productivity engineering facilities,

Green engineering/ Energy use minimization facilities/ Environment management technology facilities,

Industrial exhibition cum products display centres/ Common Conferencing Centres also in virtual space,

IT Application and development centre,

Common Production Processes

Common Machining facility for hi-tech parts based on high techology machines ( which could not be affordable to individual company),

Modern Foundry

Heat Treatment facility

Special purpose fabrication / forging & welding facility

Technical Information Centre including IP related activities

Similar facilities.

iii. Industrial City / township / agglomeration / Common Industrial Infrastructure / Parks/ Flatted Factories/ ( to house entire manufacturing value chain for enhanced global competitiveness: target atleast one during 12th FYP) consisting of one or more of :-

o Road, boundary walls, bridges, under passes and such other transport infrastructure,

o Water Supply & Storm Water Drainage

o Common Captive Power Generating Units

o Electricity and Telecommunication Transmission and Distribution Infrastructure


o Common Fuel/Gas Supply System

o Common Effluent Treatment Plant

o Solid Waste Management Facilities/Sewage Treatment plants/Sewage system

o Similar facilities.

4.1.2 Establishment of the above will be subject to law of the land.

5. SCALE OF ASSISTANCE AND CONDITIONS THEIROF for PTDCs and CFCs.

5.1 Centres of Excellences at IIT/ NIT/ Other Centres of Technologies: The set of desirables are indicated as below:

The Product and Technology Development Centres in the form of Technology Development Programme should be integrated and wide in scope covering major if not entire needs of Technology Development of an identified sub- Sector (like Machine Tools, Textile Machines and other sub-sectors of Capital Goods). Preference must be given to develop those technologies , which have been identified as gaps in the Planning Commission Working Group Report on the Sector prepared by Industry and DHI after detailed consultations.

There can be Centres of Excellences for one sub - sector set up in one or more IIT/ Institutions. However in this case the activities must be coordinated to ensure avoidance of duplicity of development efforts. Collaborative Technology Development efforts are welcome within IITs/ Institutes in India and abroad.

The Programme must be designed make major impact and should not be in minor in nature. Ambitious programmes are also welcome. They should have global outlook.

IITs/ Institute are encourages to not only contribute their expertise but also available infrastructure. Industry is also encourages to contribute machines, sponsorships for Professors/ Research Students, Technology Development Projects , land and building etc.

Such Centres to be established within IITs/ Institutes may have 30 -50 full time research and Development experts employed on contract at prevalent market rates. They may be paid salaries as per the best global practices. These may be adopted to Indian conditions.

Industry to encourage sponsorship of M. Tech/ Ph D student and pay them as their employees. Upon completion of M. Tech/ Ph D, they may be employed with the Industry. The Industry is also encouraged to evolve differential pay packages for Graduates, post graduates and Ph D entrants , so that talent is promoted in the field of R&D and Technology Development at the Institute and also within the industry. Such practices


already exist in the country with UP Medical Services, Indian Forces etc. Such integrated proposals will be preferred.

DHI proposes to include requesting the Govt for motivational support to the Industry by including salaries of sponsored Students/ professors/ projects/ technology development activities/ contributions made to setting up Technology Development Centres of Excellences in IITs/ Institutes under 200% IT weightage under in house R & D Scheme of DSIR and also 150% weightage of Skill Development of NSDC .

It is also proposed that the Cabinet Note for the scheme may have directions to the Central PSUs that they have separate entry and sub sequent differential pay packages for Graduates, Post Graduates, PhD and Post PhD.

The lead has to be taken by Central PSUs. Private sector will follow them. One of the tender condition may provide separate marks for M Tech , Ph D and Post Ph D employees with the suppliers, recognition of in house R & D, tie up with IITs/ Institutes for Technology support , in house Technology development facilities/ expenditure / performance including Patents held.

DHI also proposes separate Cabinet Note on preference to locally made products and also relaxation of past experience condition with development contracts . Checks and balances will be proposed to safe guard PSU interests.

The objective of aforementioned steps is to enhance talent and retain highly qualified manpower to the industry, so that Technology Development becomes an internal and continuous practice rather then crisis driven step, as is now.

Each of the IIT/ Institute may follow a model of delivering services best suited to its character. A long leave may be granted to M.Tech/Ph.D students to work with industry in problem related R&D and find vocations. However transparency, involvement of all stakeholders, accountability and result orientation should be at the core of designing their own systems.

The Centres of Excellences may be of long term nature. DHI proposes to support them for two to three plans on continuous basis, then project to project basis. The long term objective is to evolve such Centres into Fraunhofer like model as recommended in the Planning Commission Working Group Report.

General Conditions as per GO/ GFR/ Scheme Specific:

5.2 In case of Government entities , the assistance required for creation or strengthening/expansion of the infrastructure and meting the revenue deficit etc. could be upto 100% maximum of Rs 300 crore.

5.3 In the case of private sector , the amount of assistance ( maximum Rs 250 crore ) will not exceed the 90% actual amount required for creation or strengthening/expansion of the infrastructure and meting the revenue deficit etc. of the national level Society floated by Industry. 10% upfront will require to be invested by the Industry first, before the Govt share starts to flow. No relaxation will


be made in this condition. At the proposal stage proof of availability of funds with the applicant must be shown. It may please be noted that Land and building financing is not allowed from Govt grants as per the rules. Such investments are to be borne by the Industry from their contributions.

5.4 Assistance will be phased to schedule of expenditure preferably 30% - 40% - 30% linked to progress milestones.

5.5 Only one instalment in advance will be considered maximum for next one year of expenses.

5.6 Due to the nature of the activities , the applicants are advised to associate suitable Technical Advisors with previous experience for planning , setting up and running the facilities .

5.7 Central government may nominate one or more officer/s, not below the rank of Under Secretary of Govt of India, as its representative on the Board of Administration or any other equivalent body, responsible for the management of the entity. It would be the responsibility of the concerned entity to invite such nominated officer to all meetings of the Board of Administration (or equivalent). No financial decisions can be taken unless the atleast one Govt nominee is present or DHI prior consent has already been obtained. Post factor consents will not be considered at all.

5.8 The assisted Society ( entity) shall be required to complete the construction within the given time-frame and shall have to furnish the utilization certificate of the assistance sanctioned within the period prescribed in the sanction letter normally every year .

5.9 The assisted society ( entity) shall not dispose of or lease out or create any charge over the assets created by utilizing the assistance provided under this scheme, without written permission from the DHI.

5.10 The assisted society ( entity) shall not change the form or the basic character, without prior approval of DHI. The charter of the assisted I indicating its objects, shall not be amended without written permission of the DHI.

5.11 The assisted society ( entity) shall be required to carry out a minimum set of activities and programmes every year, as prescribed by the Government. The Government reserves the rights to advise the society to undertake activities include din the Working Group report on priority , since these are the identified industry needs, for which the present scheme has been planned.

5.12 The financial assistance provided under this scheme would be of non-recurring and capital nature. Funds may not be used directly to pay salaries and allowances etc. for the institute’s faculty, staff or administrators. However, services may be charged to the Centres.

5.13 The Centre may be created as separate accounting preferably legal entity.

5.14 The accounts of the assisted society ( entity) shall be audited every year and the assisted society shall be required to submit annual report along with financial statement to the DHI, at least for a period of five years after receipt of the financial assistance. The annual reports on implementation of the scheme would include the details of construction activity, procurement of machinery/ equipment etc. during the period under report. The annual reports must contain details of the activities undertaken by the Institute during the period under report, along with the audited accounts. The report would also include the details of participants/ trainees undergoing training, as well as the details of successful entrepreneurs who have set up their enterprises


5.15 The assisted Society ( entity) shall be required to maintain a fixed assets register of equipments/assets procured by utilizing grant funds for verification by DHI at any time.

5.16 In case of failure to utilize the sanctioned funds within time or its misuse, misappropriation or diversion or violation of any one or more of the conditions mentioned above, the Government will be entitled to recover the entire assistance amount with interest, in addition to taking such other legal and/or penal action, as deemed necessary. Since the scheme is approved for the 12 th FYP duration, the establishment phase of the facilities should be over during the 12 th FYP.

5.17 The GFR will require to be followed in letter and spirit.

5.18 Central auditing will be undertaken.

5.19 Central Government may also prescribe such other conditions, as deemed necessary, before sanction/release of assistance.

6. APPLICATION AND APPROVAL PROCEDURE

6.1 The applications in the form annexed with DPR for the facility proposed under the scheme shall be submitted to the Director, (HEMT) in DHI.

6.2 DHI (HEMT) shall process the applications within one month for their completeness and submit them to the Screening Committee set up under para 7 below, for consideration.

6.3 The Screening Committee shall examine all the proposals received under the scheme and submit its recommendations within a month to the Apex Committee in agenda form.

6.4 The applicant will make presentation of his proposal to the Apex Committee. The Committee will hold consultations with the applicants , before coming to a decision.

6.5 The decision of the Apex Committee shall be conveyed soon after.

6.6 The release will start after completing the initial conditions specified in the approval.

6.7 It will be the endeavour of the Department to communicate the decision within three months from receiving the completed application.

7. SCREENING COMMITTEE

7.1 The composition of the Screening Committee will be as under:

i. Joint Secretary (HEMT), DHI - Chairman;


ii. Economic Adviser, DHI - Member;

iii. Industrial Adviser (HEMT)/Sr. Development Officer (HEMT) - Member;

iv. Director, IF Wing (DHI) - Member and;

v. Director (HEMT) - Member Secretary.

7.2 The Committee may co-opt/ invite/ involve experts on need basis.

7.3 If deemed necessary it will meet the applicant in DHI and /or at site.

8. COMPOSITION OF THE APEX COMMITTEE

8.1 The composition of the Apex Committee will be as under:

i. Secretary (Heavy Industry), DHI - Chairman;

ii. Member Secretary ( NMCC) - Member;

iii. Secretary (IPP), DIPP - Member;

iv. Secretary (MSME) - Member;

v. Secretary ( DSIR ) & DG (CSIR) - Member;

vi. Adviser to Principal Scientific Officer to PM - Member;

vii. AS & FA, DHI - Member;

viii. Adviser (Industry), Planning Commission - Member;

viii. DG (BIS) - Member,

ix. DG (MS) - Member,

x. DG (CII) - Member;

xi. DG ( FICCI) - Member,

xii. Chairman (SBI) - Member;

xiii. Chairman (SIDBI) - Member and;

xiv. JS (HEMT), DHI - Member Secretary.

8.2 The Apex Committee may co-opt and /or invite other experts on need basis.

9. MONITORING AND EVALUATION


9.1 The Screening Committee/ Secretary (DHI) shall regularly monitor the progress of the scheme preferably using online tools.

9.2 The applicant will present closure reports to the Apex Committee after physical verification by the Screening Committee.

9.3 An independent agency at the end of plan shall evaluate the overall impact of the scheme.

**************


EFC memo on SEGC-Capital Goods as on May 1, 2013 of 44

Annexure III(See para 7.1)

Complete Bio-data of Shri Harbhajan SinghName : Shri Harbhajan Singh

Identity No. 01UP054000Service/Cadre/Allotment Year : IAS/Uttar Pradesh/1983

Source of Recruitment : RRDate of Birth : 23/11/1955

Sex : MALEPlace of Domicile : Haryana

Mother Tongue : PUNJABIIndian Languages Known : HINDI ENGLISH

Foreign Languages Known :

Retirement Reason : ON SUPERANNUATIONII. Details of Central Deputation

A. 1. Whether Presently on deputation to GOI? Yes

2. Date of Start of Central Deputation 23/12/2009

3. Expiry Date of tenure of Central Deputation 22/12/2014

4. Tenure Code NORMAL TENURE

B. If in Cadre, date of reversion from Central Deputation, if any

C. Whether debarred from Central Deputation? No

If so, period of debarment -

III.Educational Qualifications

Sl.No QualificationInstitute/University/Place Subjects Division

1 P.G. HISTORY Second2 GRADUATE HISTORY ENGLISH PUBLIC ADMN Second3 LL.B. LAW First

IV. Experience Details

Sl.No Designation/Level Department/Office Organization Experience (Major/Minor)

Period (From/To)

1 Asstt MagistrateJr. Time Scale Bulandshahr CADRE

Land Revenue Mgmt & District AdmnSub Divisional Admn

11/06/198410/08/1985

2 S D MJr. Time Scale Muzaffarnagar CADRE


11/08/198524/07/1986

3 Jt MagistrateJr. Time Scale

Roorkee CADRE Land Revenue Mgmt & District Admn

25/07/198609/09/1987

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Sub Divisional Admn

4 Dist MagistrateJr. Time Scale Agra CADRE


18/11/198704/12/1987

5 Chief Dev OfficerSr. Time Scale Agra CADRE

Land Revenue Mgmt & District AdmnDevelopment Admn

04/12/198724/07/1989

6 G MSr. Time Scale

Small Industries Dev Corpn Ltd (SIDCO)Kanpur Nagar

CADRE IndustriesSmall Scale Industries

24/07/198931/05/1990

7 G MSr. Time Scale Kanpur Nagar CADRE Finance

Finance01/06/199004/07/1992

8 Collector & D MDy Secy Level/JAG Basti CADRE

Land Revenue Mgmt & District AdmnDistrict Admn

06/07/199209/07/1993

9 Addl RegistrarDy Secy Level/JAG Lucknow CADRE

Agriculture & CooperationCooperatives

13/07/199318/07/1993

10 Collector & D MDy Secy Level/JAG Saharanpur CADRE


19/07/199304/07/1995

11 Collector & D MDir Level/SL JAG Kanpur Nagar CADRE


06/07/199514/10/1997

12 Spl SecyDir Level/SL JAG Education Deptt CADRE Human Resource Dev

Elementry Education14/10/199719/05/1998

13 Spl SecyJS Level/Level - I

Geology & Mines Deptt CADRE Mines & Minerals

Geology19/05/199813/07/1999

14 SecretaryJS Level/Level - I Industries Deptt CADRE Industries

Industries13/07/199902/11/1999

15 SecretaryJS Level/Level - I

Uttaranchal Dev Deptt CADRE Urban Development

Urban Develoment03/11/199921/12/1999

16 DirectorJS Level/Level - I

Geology & Mines Deptt CADRE Mines & Minerals

Geology21/12/199906/11/2000

17 SecretaryJS Level/Level - I Indl Dev Deptt CADRE Industries

Industries21/12/199906/11/2000

18 Pvt SecyDirector Equiv

M/o Consumer Affairs, Food & Public Distribution

CENTRE-N.DELHI

Staff OfficersMinisters Office

06/11/200019/09/2001

19 DirectorDirector Equiv M/o Civil Aviation CENTRE-

N.DELHITransportCivil Aviation

19/09/200108/01/2004

20 Jt Secy & F AJoint Secy

M/o Coal & MinesD/o Coal

CENTRE-N.DELHI

FinanceFinance

09/01/200403/02/2006

21On Compulsory WaitJS Level/Level - I

CADRE N.Applicable/N.AvailableNot Available

04/02/200605/03/2006

22 Secy & CommrJS Level/Level - I Milk Bd CADRE

Agriculture & CooperationDairy

06/03/200618/05/2007

23 Vice ChairmanJS Level/Level - I

Dev AuthLucknow CADRE Urban Development

Urban Housing18/05/200723/10/2007

24 Commissioner JS Level/Level - I

Food & Civil SuppliesLucknow CADRE

Consumer Affairs, Food & PDFood

23/10/200724/03/2008

25 SecretaryJS Level/Level - I CADRE

Science & TechnologyScientific & Industrial Research

25/03/200814/05/2008

26 SecretaryJS Level/Level - I Medical Edu Deptt CADRE Health & Family Welfare

Medical Education15/05/200828/02/2009

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27 Prl SecyAddl Secy Level

Health & Medical Edu Deptt CADRE Health & Family Welfare

Medical Education28/02/200923/12/2009

28 Jt SecyJoint Secy

M/o Heavy Industries & Pub EnterprisesD/o Heavy Industry

CENTRE-N.DELHI

IndustriesHeavy Industries

23/12/2009 for five years

V. Mid Career Training DetailsSl.No Year Training Name Date From Date To1 2011 Mid Career Programme for IAS Officers - Phase V 09/10/2011 11/11/2011

VI. In-Service Training Details

Sl.No Year Training Name Institute City Duration (Weeks)

1 1987-1988

Rural Energy Plg. & Technology

The Energy and Resources Institute (TERI)

New Delhi 1

2 1988-1989 Social Welfare Tata Institute of Social Sciences

(TISS) Mumbai 1

3 1989-1990

Develop. Banking & Insttl. Credit

Management Development Institute Gurgaon 1

4 1991-1992 Junior Level 1982-19 85 MIDA 3

5 1998-1999

Middle Level - 1982-88 Batches

Indian Institute of Management Calcutta Calcutta 2

VII. Domestic Training DetailsSl.No Year Training Name Duration (Weeks)1 1987 TATA ENERGY RURAL TECH 12 1988 TISS,BOMBAY SOCIAL WEL 13 1989 MDI GURGAON DEV BANKIG 14 1991 MID,PUNE DEVELOPMENT 3

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CG Scheme PERT

Submission of Proposal for DHI approvals and TCirculation to Central Ministries and Departments for their comments T +15 days

Receipt of comments and redrafting – re approval for circulation to the Planning Commission T + 30 days

Approval by the Planning Commission T + 60 daysCirculation to EFC T + 65 days EFC approval T + 110 daysDrafting CCEA note T + 115 days CCEA note circulation and its approval & scheme notification of scheme , guidelines and call for proposals. T + 145 days

Conducting first meeting of the Apex Committee to consider proposals T + 175 days

Conducting second meeting of the Apex Committee to consider proposals T + 235 daysStart of activity phase - Start of implementation of project components.Project implementation, monitoring and approval of more projects subject to funds availability T + 295 days

End of implementation phase of Scheme components Feb 15 Review Feb 28

Page 44 of 44

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