Budget 2024: Engineering sector seeks policies that will ease liquidity issues and encourage R&D
“Banks should provide liquidity to engineering industries, specifically MSMEs, for purchase of new machines, equipment and technology updates so that smaller engineering firms can produce world-class products, both in volume and at affordable prices to compete internationally,” says Arun Shukla, MD of Vikramaditya engineering, a Baddi-based MSME engineering company.
He advocates increased government incentives to acquire capital goods and machinery; these are now imported, putting a significant burden on engineering firms’ working capital. “The finance minister should allocate substantial funds for industrial infrastructure for MSME the way China has done, for example, for common effluent plants, testing laboratories, logistic hubs, uninterrupted electricity, etc. Unnecessary statutory and regulatory compliance burden hurting productivity needs to go away. Also, labour reforms should be imposed strictly so that exploitation can be reduced. Product-wise MSME clusters should be announced. Collateral-free funding should be available at a low interest rate for development, automation, research & development and expansion purposes,” Shukla adds.
As the largest industrial sector in India, the engineering sector comprises 27% of the factories in the country. It sees demand when there is capacity expansion in infrastructure, electricity, mining, oil and gas, refinery, steel, automobiles and consumer durables. The capital goods sector, a vital part of the engineering industry, contributes 12% to India’s manufacturing
