comments on draft capital goods policy by cdr ks jassal
TRANSCRIPT
• Author is former Joint Director of MoD/ HQI DS and responsible for Perspective Planning. He has managed around 400 to 450 Capital Acquisitions proposals with varying Technology needs & Production arrangements. He was part of Executive team that made revised Offsets Policy. He has also been Country Manager of a US MNC dealing in Hi Tech Eqpt. • He was responsible for formulation of Long Terms Plans called LTIPP 2012-27, 12th Defence Plan, 12th Manufacturing Plan. He was also Memb Secy of SCPACC. • Author can be reached on email [email protected] • Author has also written several open papers which are available on Linkedin Page & Slide Share. Author Blogs on issues of Perspectives, Inequality, Plans, Essence (of life) & Growth under head PIPE Growth.
Cdr (Retd) Kamaljit Singh Jassal
Macro Issues
• Table 1.1a classifies Capital Goods under 10 heads – Why Hydraulic, ocean drills, Tunneling, Boring,
Hi-Tech seam-alloy-welding etc are missing?
• DGFT has definition in Para 9.12 which is more wide & better – We could add to it Marine, Aviation & Hi Tech
computer aided-medical machines sector.
• Till we don’t work on this list, NAICS classification & taxation issues will remain. – Learn from Military stores list.
Macro Issues
• Very good that Policy has Vision, Mission, Objectives – Why not make Chapter 4 as 1.
– Vision should be directional & not time bound, while Mission could be landmarked with time.
• Objective should have- – Time period to achieve Objective
– Roadmap (separate operative letters to be issued) • TCA modeling
• Procedures
• Structures
• Monitoring & Evaluation
Chapter - 2
• Start of Chapter 2 - Summary of Key Issues & Challenges ???
– How has Summary been arrived from Preamble & Chapter 1. Are these pre-conceived ideas or perceptions or list taken out from a separate research paper not quoted here!!
– ‘capital goods component in industrial production has lagged in recent years due to slow domestic demand and following slow growth in the world economy.‘
• Is it inference or assumption
Chapter - 3
• Kindly bring attention on following acts of USA:-
– Buy American act [min 50% indigenous content]
– Jones act
– Value Engg Rule or value addition culture (futuristic idea)
Chapter - 4
• Vision - Very good/ Brave, but dangerous
– Generally Vision is directional & non tangible.
– Risk exists to make it time bound/ tangible!!
• Objective – Mention only output oriented, inputs will be derived automatically.
– Enablers: Skill, Manpower etc are enablers.
• Kindly focus more on vitalising the Cobb-Douglas Production function.
Chapter - 6
• Is this required: – 6.1.2 - To provide incentives for domestic and global
mergers & acquisitions.
– 6.1.3 To provide incentives for venture funding/ risk capital to start-ups. • Why not create eco-system for startups?
• 6.1.4&5 can be ‘reform financing setup/ system for Industry in Capital Products production’.
• 6.1.7 – would you like to consider forming a Section 25 (old)/ Section 8 company having a Academia-Industry interface on the lines of Fraunhoffer
Chapter - 6
• 6.2.1 – Consider adding PMA & 50% indigenous content.
• 6.2.4.2 – Suggest don’t bring, MoD is in mess!!!!
• 6.2.5.1 – Start with min 50%.
• 6.2.6 – Very relevant & to be enforced.
• 6.2.7.1 – Critical issues under this are:- – How do you evaluate Tech & IPRs.
– Who owns Tech & IPR if negotiated by Govt.
– How do you evaluate VA (Val Add), is it by difference of invoices or Tech/ work added to it.
Chapter - 6
• 6.2.8 – MHIPE shoudn’t be doing this directly. Instead create a Structure of Academia-industry Interface (as a Regd Society) and 2 more (mentioned later) to fix endemic problems.
• 6.2.9 – From where the Tech come. Why do ToT or TA. Why not Sec 25/ 8 company as start engine for the production Train.
• 6.2.10 – Allow only for startups or Greenfield projects or BIFR Cos. Not to be given to companies in 3 yrs existence and breaking even
Chapter - 6
• 6.2.11 – Strongly concur.
• 6.2.12 – G2G2B is not an appropriate idea. This kind of interface does communication exchange but builts in pressure lobby for vested interests. Instead go for Integrated inborne-Think Tank approach and interfaced Industry approach.
– In MoD, we have integrated Think Tanks like IDSA (civil), CLAWS (army), CAPS (AF) & NMF (Navy).
– IBO/ DPSU interface provides Industry inputs/ challenges.
Chapter - 6
• 6.2.12 – Sub sections relate to Monitoring & Evaluation. This is strong Admin/ Quasi judicial function. Create a separate wing or outsource it to a inborne ‘Society’ staffed by Retd Govt officers. Head of this should be a serving officer.
• 6.3.1 – Interesting!! Check Business rules! • 6.3.3 – Instead, CII/ FICCI/ ASSOCHAM
chambers can be linked up and every 3/4 months ITPO activities be done viz which Products, how to do biz.
• 6.3.4.1 – This is too much. MHIPE cannot be panacea of all ills!! Sense & feelings behind this are deeply respected.
Chapter - 6
• 6.3.5 – This role can be & should be discharged by ITPO. MHIPE may send an officer to ITPO for Capital Goods.
• 6.3.7 – Financing should be linked or combined with Taxation policy page. Wholesome review is called in this with MoF, Commerce Min/ DIPP & MHIPE.
• 6.4 – HRD effort needs to be re-looked holistically with emphasis of BPR of it is, CTRIs and Polytechnic. Too many points. Looks HRD ministry & NSDC mandate taken over.
• 6.4.3 – Dosnt look HRD effort.
Chapter - 6
• 6.5 – Too much agenda. Looks problems were known (all Govt oriented). Cannot be panacea of all problems. – IITs, PolyTechnic linkage not included.
– Don’t take over the mandate of CSIR/ DST etc.
• 6.6 – Product Standards are must. Also must is the process of manufacturing products (ISO certification). Kindly- – Make Product Specs/ Test standard free on web.
– Make 3rd party certification for manufacturing process.
Chapter - 6
• 6.7 - Heavy Industry doing the job of MSME!! instead:-
– Focus on enclave/ cluster mftrg.
– Focus on preferential market access for MSME.
Chapter - 7
• Consider/ Could addresses the needs of:- – Agro Industry. [not same as 7.10]
• Mass sowing cum reaping/ harvesting machines.
• Bio technology
• Canal makers & Irrigation Drip Tech
• Mass clean water/ recirculation/ treatment machy etc
– Marine/ Oil & Gas Industry: • Engines mftrg.
• Pollution control tech
– Aviation Industry
– Auto Industry
Chapter - 8
• 8.2.1 – Isnt it a Cab Secy function.
– Suggest move a policy page/ note for CCEA & get it done. Retain ‘Control’ (not coord) within MHPE.
• 8.2.2 – Don’t do this. Consider following 3:
– Create a Sec 25/ Sec 8 (new) Co or society with Academia-Industry interface and achieve the objects set out.
– Also create Think Tank for larger & sub sector policy formulation/ reviews
– Also create Sec 25/ Sec 8 (new) Co or society, on the lines of Invest India for Industry interface/ monitor/ review.
Chapter - 9
• 9.2.1 - Devising a long term, stable and rationalized tax and duty structure to ensure cost competitiveness of the sector. – Absolutely required with ease of litigation
– Mandate of Fin Ministry!!
• 9.2.2 Drafting a comprehensive public procurement policy with amended qualifying criteria and introducing special provisions in contracts for domestic value addition. – Concur. Turnover can be substituted with BG,
production capability enhancement, etc
Chapter - 9
• 9.2.3 Promoting development of new technology through indigenous sources.
– Isnt it mandate of DST, CSIR etc?
• 9.2.4 Providing Technology Upgrade Fund Support across all capital goods sub-sectors.
– Isnt it mandate of DST, CSIR etc?
– It is understood that MHIPE wants to do something/ propel Tech front for Capital Industry. Kindly examine the Sec 25/ 8 Academia-Industry interface.
Chapter - 9
• 9.2.5 Creating a level playing field vis-à-vis imports by restricting imports of second hand machinery and mitigating duty disadvantages.
– Yes, a white-paper needs to be presented on this.
• 9.2.6 Supporting availability of short and long term of financing at competitive rates to capital goods manufacturers.
– Present a Policy paper on this for discussion please.
Chapter - 9
• 9.2.7 Enabling skill development by setting up sub-sector specific Skill Councils. – This requires a mere note of observations &
recommendation from MHIPE to NSDC.
• 9.2.8 Enabling higher participation of India in standard creation and developing support system to improve compliance. – Very Important but specifics required
• 9.2.9 Developing manufacturing clusters with shared facilities especially for SMEs. – This is economics-business point. Well thought out
strategy/ paper needs to be presented to avoid the lessons learnt of debacles of SEZ & PPP policies
Overall
• Very Interesting that few Officers (few good men) are doing the rational macros turn around or atleast shakeup.
• There is strong need to be rational, create:
– structures that aid Governance,
– procedures that give almost automated or pre fed algorithm type decisions which are consistent, forward looking, without bias.
• A good step is started, please complete the loop till implementation/ public advocacy.
• Kamaljit Singh Jassal
– Retd Commander
– Ex Joint Director MoD
– Ex Country Manager of US MNC
– Currently Exec Dir of a Startup brand ‘Punjab Hi-Tech Systems’
• The Officer can be reached out at:
– Email – [email protected]
– Mbl: 971 77 555 28
– Tel: 0124- 2213 228