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Home arrow News arrow Business News arrow Cornerstone of Manufacturing Policy should be technology upgradation : FICCI
Cornerstone of Manufacturing Policy should be technology upgradation : FICCI Print E-mail
Friday, 15 January 2010
New Delhi : FICCI President Mr Harsh Pati Singhania has called for introducing a technology focus Manufacturing Policy for the country at the earliest. Recognizing the urgent need for upgrading technology in various manufacturing sectors, Mr Singhania said that we need to provide appropriate incentives and schemes for promoting technology upgradation in the manufacturing sector.

NMCC (National Manufacturing Competitiveness Council) has suggested the formulation of Manufacturing Policy for India, and FICCI feels that cornerstone of such a Policy should be achieving technology upgradation which is key to the competitiveness in manufacturing.

In his suggestions to NMCC, he has also emphasised the need for leveraging India’s large Government procurement market to promote domestic manufacturing. For instance, FICCI said that we can encourage the manufacturing of medical devices by introducing preferential policies for domestic manufacturers in our healthcare system. Similar provisions can be made for various e-governance projects of the Government which would encourage local production of IT hardware.
 
FICCI suggested that as is the case in other countries, Government could identify high technology areas in manufacturing which could be promoted by tax incentives.

FICCI recommends that investment in such high-technology areas should be subject to a lower corporate tax rate or income tax exemption could be provided for a period of five years in the high technology areas like aerospace, advance electronics, bio-technology, advance materials, equipment and instrumentation. Citing an example, Mr Singhania said that in China high-technology areas of manufacturing attract lower corporate tax rate of 15% than the usual 25% corporate tax rate and Malaysia provides income tax exemption for 5 years in identified high technology areas of manufacturing. This would help lay a strong foundation for domestic manufacturing in these critical and strategic sectors.
 
In addition to these incentives, FICCI has also suggested to NMCC that there is a need to leverage FDI for technology transfer and there needs to be specific provision of transfer of technology in the FDI Regulatory Framework which is under formulation by DIPP. The current draft regulatory framework of FDI is not very specific about provision that would ensure technology transfer through FDI. Also, FICCI suggested that Technology Acquisition fund for SME units in manufacturing could be set-up to help the small and medium enterprises in acquiring technologies from abroad.
 
“There is a need for multi-pronged approach for changing the technology canvas of our manufacturing sector”, said Mr Singhania.
 
Besides technology, FICCI has also emphasized the need for developing strong vendor or component base for various manufacturing sectors in the country in order to create manufacturing base of the country. FICCI has suggested introducing ‘Industrial Linkage Programmes’ in some manufacturing sectors which would promote vendorization by providing tax exemption for some period to these vendors which are capable of achieving world class standards. Sectors that could be initially identified for this programme are machinery, metals and electronics.

Last Updated ( Friday, 15 January 2010 )
 
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