Capital Goods Industry

Strategic Importance


Capital Goods Sector comprises of plant and machinery, equipment / accessories required for manufacture / production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernization, technological up gradation and expansion. It also includes packaging machinery and equipment, refrigeration equipment, power generating sets, equipment and instruments for testing, research and development, quality and pollution control.

 

Capital Goods sector has multiplier effect and has bearing on the growth of the user industries as it provides critical input, i.e., machinery and equipment to the remaining sectors covered under the manufacturing activity. The capital goods industry contributes 12% to the total manufacturing activity which translates to about 1.8% of GDP. If the goal of achieving 9% growth in GDP during the 12th Five Year Plan has to be realized, then it is important for the manufacturing industry to grow at least by 11-13% per annum. This further requires that the Capital Goods sector, which is considered to be the core of manufacturing, should grow at around 17-19%.

 

Major Sub-sectors

 

Given the various form of capital goods being manufactured, the sector is normally divided into 8-10 major sub-sector categorized based on end-usage. The main sub-sectors thus identified as sub-sectors of the capital goods sector are:

 

S. No Sub Sectors Brief Description
1 Machine Tools Constitutes machines related to metal cutting and forming
2 Power & Electrical equipment Constitutes machines related to power generation, transmission and distribution
3 Process Plant Machinery Constitutes machines such as pressure vessels, evaporators, stirrers, heat exchangers etc. are used in energy, metallurgy, oil and gas, industry etc.
4 Textile Machinery Constitutes machines used  in various steps of textile fabrication such as spinning weaving, processing, testing etc.
5 Plastic, Paper & Rubber Machinery Constitutes machinery used in various fabrication steps of paper, plastic and rubber manufacturing
6 Light Engineering Goods Constitutes machines related to roller bearing, process control, instruments, castings, steel forgings, and pipes etc used in oil & gas, power, automotive etc. industries
7 Earthmoving, Construction and Mining Equipment Constitutes machines such as graders, dozers, excavators etc for mining and mixers, tippers, road millers etc. For constructions.
8 Material Handling and Lifting Equipment Constitutes primarily of forklifts and cranes.
9 Agricultural Machinery Constitutes machines used in various steps of agriculture such as land development, sowing weeding, harvesting etc.

 

Projected Manpower requirement- 2017 & 2022

 

The study on Human Resource and Skills Requirement in the Capital Goods Sector by KPMG supported by NSDC, FICCI and CGSC, projects manpower requirement in 2017 across the six sub-sectors is approximately 2,085,000. The distribution of the same across subsectors and functions are as follows:

 

a) The study projects the manpower requirement in 2022 across the six sub-sectors is approximately 3,940,800. The distribution of the same across subsectors and functions are as follows:

 

Projected Manpower Requirement - 2017

Function

Machine Tools

Power & Electricals

Process Plant Machinery

Textile Machinery

Plastic, Paper & Rubber Machinery

Light Engineering Goods

Total

Production

237,200

679,000

227,500

131,3000

90,700

573,300

1,939,400

Support Functions

17,900

51,100

17,100

9,900

6,800

43,100

146,000

 

255,000

730,100

244,600

141,700

97,500

616,400

2,085,400

 

 

b) The major spread of employment in the Capital Goods Sector is:

 

Projected Manpower Requirement - 2022

Function

Machine Tools

Power & Electricals

Process Plant Machinery

Textile Machinery

Plastic, Paper & Rubber Machinery

Light Engineering Goods

Total

Production

477,500

1,240,000

385,400

226,300

215,600

1,120,3000

3,665,100

Support Functions

35,900

93,300

29,000

17,000

16,200

84,3000

275,700

Total

513,400

1,333,300

414,400

243,300

231,800

1,204,600

3,940,800


Spread of Capital Goods in Industry