Last updated: February 2nd, 2022 6:03 PM

Scheme for Enhancement of Capital Goods Sector Phase II

Ministry of Heavy Industries (MHI) has notified the Scheme on Enhancement of Competitiveness in the Indian Capital Goods Sector- Phase-II for assisting in Common Technology Development and Services Infrastructure, with a financial outlay of Rs 1,207 crore. The scheme was notified on 25^th January 2022. The primary objective of Phase II of the Scheme for Enhancement of Competitiveness of the Capital Goods Sector is to create a strong and globally competitive capital goods sector that contributes at least 25% to the manufacturing sector.

The objective of Scheme for Enhancement of Capital Goods Sector Phase II

As mentioned above, the key objective of the scheme is to create a strong and globally competitive capital goods sector that contributes at least 25% to the manufacturing sector.

• To create a self-sustaining ecosystem for research and innovation for manufacturing technologies through the use of the Technology Innovation Portal
• To provide the infrastructure for testing the quality of processes developed and manufactured to ensure that they comply with international mandatory standards
• To Create the common engineering infrastructure for designing and manufacturing for the benefit of MSMEs and other industries of the Capital Goods Sector which are unable to access the latest high technology machines
• To enhance the skills of the existing manpower and to expand the availability of highly skilled manpower for the Capital Goods sector
• To promote smart manufacturing and to facilitate the adoption of relevant, robust, and affordable technologies for Industry 4.0 in the Capital Goods sector to improve efficiency and productivity
• To promote progressive indigenization of technologies for capital goods, by engaging local industry, as an active partner in innovation and development of new products

Components of Scheme for Enhancement of Capital Goods Sector Phase II

The components of the Scheme for Enhancement of Capital Goods Sector Phase II are listed as follows:

• Identification of Technologies through Technology Innovation Portals
• Setting up of four New Advanced Centers of Excellence and augmentation of Existing Centers of Excellence
• Promotion of skilling in the Capital Goods Sector–the creation of Qualification packages for skill levels 6 and above
• Setting up of four Common Engineering Facility Centers (CEFCs) and augmentation of existing CEFCs
• Augmentation of Existing Testing and Certification Centers
• Setting up of ten Industry Accelerators for Technology Development

Identification of Technologies through Technology Innovation Portals

Technology Innovation Portals will be set up by BHEL, HMT, CMTI, ARAI, iCAT, and IIT Madras under the Scheme for Enhancement of Competitiveness in the Capital Goods Sector, Phase I.

Objective

Six technology Innovation Platforms have been created under Phase I. The objective of six platforms is to provide an eco-system that encourages interactions of all the relevant stakeholders by crowdsourcing in an open and collaborative framework for facilitating Startups and angel funding of innovation, research, and development of mother manufacturing technologies‘ indigenously relating to the capital goods and auto sectors

Funding pattern

The funding pattern under the Technology Innovation Portals component shall be as per MoUs signed for the six TIPs under Phase I.

Mechanism

Under Phase II of the scheme, the six TIPs developed under Phase I shall be promoted and supported. No new TIPs shall be created under Phase II of the scheme.

Setting up of four New Advanced Centers of Excellence

The objective of the Centre of Excellence is to develop the high risk futuristic technological projects like high tech machine tool aggregates, controls, guides, motors, CNCs, high precision components, hydraulics, high tech textiles machines, electronic parts, and other strategic mother technologies including those identified through technology and Innovation platforms that are indigenously required by the Capital Goods Sector.

Eligible entities for funding

The eligible entities for funding under the Scheme for Enhancement of Capital Goods Sector Phase II are given here:

• R&D/ Academic/ Scientific institutes
• CPSEs
• Private industries
• Existing Centers of Excellence (CEOs)
• Autonomous Bodies
• Industry associations

Eligible Technologies for funding

High tech machines not manufactured in the country at present in the sub-sectors including but not restricted to the following:

• Machine tools and Cutting Tools
• Textile machines and Metallurgical machinery
• Steel plant equipment and Food processing machinery
• Printing machinery and Plastic processing machinery
• Process plant equipment and Earthmoving & mining machinery
• Electrical equipment and their aggregates
• Press tools & dies, Controls, guides, motors, CNCs systems, high precision components, hydraulics, and electronic parts,
• Auto components and other strategic technologies that are indigenously required by the Industry

Details of Financial Assistance

Government of India grant will be provided up to 80% of the cost of creation of equipment, machinery hardware and software facilities for the development of new Centers of Excellence for Technology development and augmentation of existing CoEs developed under Phase I. The balance amount needs to be contributed by the applicant in the next three years i.e. 2022-23 to 2024-25.

Other Conditions

• GoI grant will not be provided for the purchasing of the cost of land and building
• An Apex Committee will be constituted under the scheme for the disbursement of grants and The Apex Committee shall be the final authority in this regard.
• In the case of existing CoEs, funding shall only be provided for the development of new technologies.
• No funding shall be provided for the up-gradation of old machines

Application Procedure

The applicant needs to submit the application form and Detailed Project Report (DPR)in the prescribed format. Furnish the following details in the application form:

• The targeted technology
• Present value of imports
• Prospective buyers of the targeted technology
• Prospective IPRs
• Potential orders

The eligible proposals received by MHI shall be screened by the Screening Committee constituted under the scheme

• Upon recommendation of the Screening Committee, the proposal shall be submitted for the approval of the Apex Committee
• . Upon approval granted by the Apex Committee, the MoU shall be signed amongst the PIO, Industry partner and
• The MoU shall specify the terms and conditions of the MHI grants. For each project approved, a Project Review and Monitoring Committee (PRMC) shall be constituted for reviewing the progress of the project at fixed intervals.

Promotion of skilling in the Capital Goods Sector

The MHI will promote skilling in the Capital Goods sector by creating Qualification packages (QPs) for skill levels 6 and above.

Eligible entities for funding

• Funding shall be given under this component to sector skill councils under MHI.
• All applicants must register on the MHI Technology Innovation Platforms, set up under MHI CG Scheme Phase I

Eligible Qualification Packs for funding

The indicative list of qualification packs and expected skill demands for futuristic job roles are as follows:

Funding pattern

GoI grant will be provided up to 100%for the development of Qualification Packs for identified Skill Training Needs. Disbursement of grants for the projects shall be in accordance with the milestones laid down in the MoU signed for the project by MHI with Sector Skill Councils.

Application Procedure

• The eligible sector skill council needs to submit the application form in the prescribed format containing the details relating to the targeted QPs, their scope and requirement, prospective users/trainees, future job roles targeted by the QP, etc.
• The eligible proposals received by MHI shall be screened by the Screening Committee constituted under the scheme.
• Upon recommendation of the Screening Committee, the proposal shall be submitted for the approval of the Apex Committee.
• Upon approval granted by the Apex Committee, the MoU shall be signed between MHI and the Sector Skill Council.

Setting up of four Common Engineering Facility Centres (CEFCs)

Common Engineering Facility Centers will boost the present technology levels of capital goods in the country through awareness programs for creating demonstration, awareness, training, consultancy, hand-holding, and R & D services to industrial units desirous of upgrading the production by creating Demonstration cum Experiences Centres

Eligible entities for funding

Common Engineering Facility Centres in association with industry and industry associations-

• Educational institutes (Private and Govt)
• R&D institutions,
• CPSEs
• Private Industries
• Autonomous Bodies
• Existing CEFC created in Phase-I It is mandatory for all applicants to register on the MHI Technology Innovation Platforms set up under the MHI CG Scheme.

Facilities for funding

Common Engineering Facility Centres may be established for the following purposes:

• Common foundry & heat-treatment,
• Testing laboratories
• Designing facility,
• Common prototyping,
• General and specific machining,
• Industry 4.0 platform

Details of Financial Assistance

GoI grant will be provided up to 80% of the cost of the creation of equipment, hardware, and software facilities for the Setting up of Common Engineering Facility Centres. The balance amount shall be contributed by the applicant(s) in the next three years i,e. 2022-23 to 2024-25.

Application Procedure

The applicant needs to submit the application form along with the Detailed Project Report (DPR) in the prescribed format containing the following details :

• Objective
• Role of the targeted facility
• Prospective beneficiaries
• Revenue generation model
• Sustainability model

The eligible proposals received by MHI shall be screened by the Screening Committee constituted under the scheme.

• Upon recommendation of the Screening Committee, the proposal shall be submitted for the approval of the Apex Committee.
• Upon approval granted by the Apex Committee, the MoU shall be signed amongst the PIO, Industry partner, and MHI.
• For each project approved, a Project Review and Monitoring Committee (PRMC) shall be constituted for reviewing the progress of the project at fixed intervals.

Augmentation of Existing Testing and Certification Centres

The Government of India/Private Industry has created some very good test and certification centers catering to various Capital Goods sub-sectors and Industries. Under this component, it is aimed to augment the existing test and certification center in order to address the needs of the Capital Goods Sector & Auto sector for testing of machinery. These Centres will also extend similar testing and certification facilities to new Technologies developed through Technology and Innovation platform

• Existing Government/ Private Test and Certification centers are eligible for funding
• Test center under this component shall focus on testing and validation of machinery in terms of various properties relating to mechanical, electrical, chemical, structural, metallurgical, electronics aspects, etc. related to Capital Goods.
• Financial assistance will be provided up to 80% of the cost of augmentation of the existing Testing and Certification Centre for testing equipment, hardware, and software over a period of three years i.e. 2022-23 to 2024-25

The applicant needs to submit the application form along with the Detailed Project Report (DPR) in the prescribed format containing the details relating to the existing test and certification centers and the industries being catered by it, the objective behind augmentation of the test and certification, prospective beneficiaries, proposed revenue-generating, and sustainability models, etc

Setting up of ten Industry Accelerators for Technology Development

This initiative aims to actively involve local industries in the process of product development, using indigenous technology, in partnership with premium research/academic institutions (Accelerators) in the forefront of industrial innovations. These accelerators will identify domains and Select companies into cohorts (based on the present basket of imports – by value /volume/criticality) and facilitate the development of products and processes, as per their requirement.

• Reputed R & D/Academic/ Scientific Institution and Industry Associations are eligible for this scheme
• Financial assistance will provide grants for 80% of the cost of development, for a cohort as projected by an accelerator. 20% cost will be contributed by the participating industries

The applicant needs to submit the application form along with the Detailed Project Report (DPR) in the prescribed format containing the details relating to the focussed domain, products identified for development, import substitution/ export potential of the targeted products for development.