New Delhi: MSMEs body Hand Tools Association on Tuesday suggested a host of steps to the government such as tax incentives, modern infrastructure and special focus on small and medium enterprises with a view to boost local manufacturing and exports of engineering goods.
Hand Tools Association President S C Ralhan said aggressive boost from the government and greater focus on reverse engineering based R&D is required for local manufacturing of higher valued engineering goods.
He said China became the factory of the world due to a number of reasons- such as strong support to industry in terms of subsidised land and building, and investments of billions of dollars in modernising, internal infrastructure.
For India to cash in on the current sentiment and attract investments which are shifting out of China is an uphill task, because building of infrastructure can take years, Ralhan said.
“Considering the current global scenario, due to the Covid 19 pandemic, if India is to match the manufacturing prowess of China, the government has to support local manufacturing of higher valued engineering goods, encourage Indian manufacturers for local production, over and above attracting foreign companies to invest in India through FDI (foreign direct investment ) and FPI (foreign portfolio investment), and provide greater focus on the MSME sector,” he said.
The other measures suggested include duty free import of machinery to modernise plants, interest free loans or interest subsidy for five years, 10 per cent subsidy for purchase of indigenous plant and machinery, all export policies to be valid for at least 5 years so that exporters can plan long term, income tax relief for existing units going for expansion, and subsidy on land purchase for export project.
“Infrastructure development should be aggressively pursued to create jobs and buying power. This can only happen successfully if contractors are paid well in time,” he said.
Further, Raalhan said domestic engineering exporters post COVID-19 needs to be ready to bounce back by reworking on its own strategies alongside canvassing for support it wishes to avail from the government.
He said Brazil, Argentina, Colombia, Ecuador, Paraguay and Dominic Republic have reduced import duties of the engineering products as a temporary measure and India can take advantage of this tariff elimination to boost exports.
“Need of the hour is to chalk out plans to facilitate competitive engineering goods manufacturing thus providing great opportunities for employment and also resurgence and growth in the economy,” he added.
