The Cabinet on Wednesday gave approval to the country’s first ever capital goods policy, which aims at increasing production of capital goods to Rs 7,50,000 crore by 2025, and offer employment opportunities to over three crore people.

The policy also envisages increasing exports from the current 27% to 40% of production.

“Capital goods manufacturing, if it happens in India, along with the manufacturing that is going to happen downstream, the entire economy gets a fillip,” Union Railways Minister Suresh Prabhu said after the cabinet meeting.

“It will increase the share of domestic production in India’s demand from 60% to 80% thus making India a net exporter of capital goods. The policy also aims to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs,” a government statement said.

The policy will help realise the vision of building India as the world class hub for capital goods. It will also play a pivotal role in overall manufacturing as the pillar of strength to the vision of ‘Make in India’, it said.

The objectives of the policy will be met by the Department of Heavy Industry, in a time bound manner through obtaining approval for schemes, as per the roadmap of policy interventions. The Cabinet Committee on Economic Affairs also approved Yes Bank’s proposal to increase foreign investment limit in the bank to 74% entailing FDI inflows of $1 billion (Rs 6,885 crore.

This will result in a foreign direct investment of about Rs 6,885 crore in the country.
The Cabinet also gave approval to the financial restructuring of state-run Hindustan Steel Works Construction (HSCL) and its takeover by another NBCC.

HSCL will become subsidiary of National Buildings Construction Corporation (NBCC) with the later holding 51% share. The government’s shareholding in HSCL will be reduced to 49%.