29 May 2012

Meeting of Parliamentary Consultative Committee of the Ministry of Heavy Industries and Public Enterprises Held Working Group on Automotive Sector Gives its Recommendations

The meeting of the Parliamentary Consultative Committee of the Ministry of Heavy Industries and Public Enterprises met to discuss the working of the Ministry.  The meeting was chaired by Shri Praful Patel, the Minister for Heavy Industries and Public Enterprises.

The members were briefed about the various initiatives taken by the Ministry specifically in the areas of Heavy Engineering Equipment and Machine Tools Industry, Heavy Electrical Engineering Industries, Automotive Industry, the various CPSEs under the Department of Heavy Industry, MoUs, revival and restricting of CPSEs and other issues. 

The members were informed that the Working Group on Capital Goods and Engineering Sector, constituted under the Chairmanship of Secretary, Department of Heavy Industry had given its recommendations which include:

Ø  Increasing value addition in India by
·         Indigenous technology development
·         Mandating local value addition/technology transfer
·         Preference to local content in PSE purchases
·         Collaboration with user sectors through inter-ministerial coordination
Ø  Import substitution by
·         Banning imports of second hand goods
·         Regulatory mechanism for FTAs/PTAs
·         Tax structure rationalization
Ø  Export promotion by
·         Export financing
·         Soft promotion of exports
·         Counter trade in sectors where we have strong presence

The members were also informed that in terms of the recommendations of the Prime Minister’s Group on Technology and on initiatives taken by the National Manufacturing Competitive Council, the National Mission for Electric Mobility was launched and the National Council for Electric Mobility along with the National Board for Electrical Mobility were set up under the Chairmanship of the Minister for Heavy Industries and Public Enterprises.  After further deliberation, the National Electric Mobility Mission plan to 2020 is now expected to be launch by July 2012.

A Working Group on the Automotive Sector has been constituted by the Government under the Chairmanship of Secretary, Department of Heavy Industry for targeted growth of this sector in the next five years. The Working Group has submitted its report, whose major recommendations are:

Ø  Recommended milestones for pursuance

Projected performance in 2016-17
Projected capacity (all segments)
45,000,595 (no.)
Projected production
35,086,885 (no.)
Domestic sales turnover
Rs. 460,000 cr.
Rs. 81,020 cr.

Ø  Achieve the following specific targets for 2016 envisaged under the AMP for the industry-
·         To continue to be the world’s largest tractor and three wheeler manufacturer in the world.
·         To continue as world’s second largest two wheeler manufacturer.
·         To emerge as the world’s fifth largest car producer (as compared to the seventh largest currently).
·         To become world’s fifth largest commercial vehicle manufacturer.
·         To double the contribution of automotive sector to the National GDP from around 5% in 2006 to 10% in 2016.
·         Provide employment to 35 million persons.
·         To export US $ 35 billion by 2016.
Ø  Maintain continuity/stability in trade and other policies that enhance the overall competitiveness.
Ø  Implement the remaining recommendations of the Automotive Mission Plan (AMP 2006-16), e.g. formulation of a Long Term Emission Roadmap beyond 2010, upgradation and debottlenecking of road, port and power infrastructure.
Ø  Deepen competence in manufacture of fuel efficient cars and electric vehicles including hybrid segment.
Ø  Take the initiative on electric mobility forward, by promoting R&D, incentivizing manufacture and use of electric vehicles.
Ø  Budgetary support of Rs. 2541.82 crore required for implementing the following programmatic interventions-
·         NATRIP
·         R&D Projects on Electric Mobility (xEV)
·         Operational expenses of National Automotive Board (NAB)
·         Automotive Component Cluster Development Programme
·         Technology Up Gradation & Development Scheme (TUDS) for Auto Component industry – cost of interest subvention.

The members discussed in depth the functioning and problems of various Central Public Sector Enterprise (CPSE).  The Chairman of the Committee has directed the officials of the ministry and the concerned CPSE to look into each of these issues and report back to the committee.

The members who attended the meeting were Shri Pakauri LalShri Basudeb Acharia and Dr. Bhola Singh, members of Lok Sabha.

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