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INDUSTRY AND MINERALS Ship-Building and Ship-repair Industry 5.17.1 At present there are about 40 shipyards in India. Out of these, seven are in the public sector, two in the State sector and the remaining in the private sector. The private sector shipyards are allowed to construct vessels of any size. However, at present the private sector shipyards are not capable of building more than 10,000 DWT size crafts. In spite of so many shipyards in the country, ship-building industry is in doldrums partly because of very high cost of indigenous ships, unduly long delivery periods and poor viability of the shipyards and because of the ability of foreign shipyards '.;! oik-.r ships at marginal cost and shorter delivery period consequent on world-wide recession in ship-building industry. Hence, it is not proposed to set up any new ship- building yards in the Eighth Plan. Efforts would, however, be made to improve productivity and viability of the existing yards. Certain other measures under consideration are introduction of revised pricing formula as recommended by BICP, treating the ship-building industry as 100% export oriented industry with all related benefits, allowing duty free imports up to a limit of 60% of the realisable price of the vessel, providing working capital loans to shipyards on soft terms, etc. Ship Repair Facilities 5.17.2 The ship repair activity is far more profitable than ship-building. At the same time, ; -ihstantial outgo of foreign exchange (to the tune of Rs.50 crores every year) on account of Indian vessels repairs at foreign shipyards can be avoided if domestic capabilities are strengthened. Keeping this in view, most of the units in this sector are drawing up plans to increase their capacities. The Government has recognised the strength of this industry and given it the status of deemed export industry. A number of concessions, as available to 100% export oriented units, have been provided. Electronics 5.18.1 The electronics industry has the potential to be a powerful catalyst for improving productivity and efficiency in all sectors of the economy. It has achieved rapid growth, perhaps the fastest rate of growth among all industries over the past decade. The value of output of the electronics industry grew by about 25 per cent annually during the Sixth Plan and around 35 per cent per annum during the Seventh Plan. However, India's production of electronic goods is presently less than one percent of the world production which is valued at over U.S. $ 750 billion per annum. The industry is employment-oriented and provides , direct employment to around 2.60 lakh persons . and indirect employment to approximately 5.20 lakh persons. The electronics exports especially software exports have recorded impressive increases but the import intensity of the sector is a cause for concern. 5.18.2 The status and weaknesses of the indigenous electronics industry have been detailed in para 5.3.9 above. The focus of attention in the Eighth Plan, in electronics industry would be on production at internationally competitive scales, encouraging export oriented production, technology development, manpower development, rural industrialisation and application of electronics in key socio-economic sectors. In the area of computer software exports, where the country has comparative advantage, Software Technology Parks are being set up. These would require certain facilities like quick and easy communications, already provided in a few centres. A project on Value Added High Speed Data Communication Network for Software Exports is being implemented. 5.18.3 Electronics has a very significant role to play in increasing productivity and reducing costs in virtually every sector of the economy. Over the last few years certain technologies have been developed for introduction of electronic systems and controls in a number of industries such as steel, cement, paper and pulp, sugar, tea and power and also in the areas of agriculture, social infrastructure and strategic electronics, which are apppropriate for the needs of the country. In the Eighth Plan, efforts will be made for intensive application of these technologies in various sectors. 5.18.4 Another area needing attention is the training of manpower required for the electronics industry. In order to achieve the desired growth and to attract foreign investors, it has become necessary to ensure that adequately trained manpower is available. At present, training in electronics is being imparted both in Government and private institutions. Government has supported more than 450 institutions during the Seventh Plan. In the Eighth Plan, this aspect will be given special emphasis by introducing more and more job oriented courses at ITI level and Post Diploma/Degree level in the area of repair/maintenance of consumer electronics, industrial electronics, electro-medical equipment and computer systems. Some institutions like Centres for Electronics Design and Technology (CEDTs) etc. will generate special manpower in this field. Government is giving recognition to a number of private institutions engaged in various courses in computer education. Keeping in view the future requirement of manpower, there is an imperative need for augmenting and improving the training facilities available in ITIs, Polytechnics, Engineering Colleges and other institutions. Fertilisers 5.19.1 During the Seventh Plan, four gas-based nitrogenous fertiliser plants at Aonia, Vijaipur, Jagdishpur (on HBJ line) and Namrup Expansion III and DAP project at Paradeep were commissioned. Four gas-based projects are under implementation at Babrala, Shahjahanpur and Kota along HBJ line and at Kakinada in Andhra Pradesh. Even after this, there will be a shortfall of about 3 million tonnes of nitrogen in 1996-97. 5.19.2 As the expansion of the existing units provides considerable savings in infrastructure and utilities, doubling of plants at Bijaipur, Aonia and Jagdishpur should be undertaken without further loss of time. Discovery of gas in Krishna-Godavari and Cauvery basins offers an opportunity to add small—sized gas—based plants in these regions. Subject to finding an effective transport route, surplus gas available in North Eastern region can be utilised for fertiliser production. There is also a need to promote use of low cost bio-fertilisers. 5.19.3 The raw material reserves for phos-phatic fertilisers in the country are negligible. The choice is to import either rock phosphate and sulphur or intermediates like phos-acid or phosphatic fertiliser itself. The policy of a judicious mix of import of finished fertilisers and production of fertilisers through raw materials and intermediates would continue. 5.19.4 The prices of fertilisers are controlled. As retail prices are considerably lower than the fair cost of production plus freight, the manufacturers are compensated for the difference under the production-cum-transfer subsidy system. Calculation of fair prices is based on reasonable norms of production level, energy consumption, working capital margin etc. The ' pricing norms have been gradually tightened ^ over successive pricing periods, each lasting 3 years. Despite this, the subsidy burden has been steadily increasing due to (i) escalations in the costs of inputs which are not compensated by corresponding increases in the retail prices of fertilisers; (ii) increase in the volume of production of fertilisers and (iii) high capital costs of new fertiliser plants. On the other hand, the fertiliser industry has been complaining that though it is assured of a 12 per cent post— tax return on net worth, in actual practice, a number of items are excluded. Besides, there are inordinate delays in the release of the subsidy, adversely affecting the financial position of the fertiliser companies. There is a general feeling that the system of retention prices is not conducive to optimisation of the capital costs and operating efficiencies. 5.19.5 Complete de-control of prices can end the subsidy and pricing problem altogether. This will be in line with the philosophy of greater reliance on market forces and appears to be the most desirable option for solving the problem of mounting subsidies on the one hand and ensuring healthy growth of the fertiliser industry on the other. This will, of course, have to be accompanied by suitable increases in the procurement prices of agricultural products. However, this can have an adverse effect on the consumption of fertilisers especially by small and marginal farmers in the initial years. Phasing out subsidy will, therefore, have to be done gradually, giving time to farmers to adjust. 5.19.6 Group retention prices for newer plants based on gas can be introduced as an interim measure. This will be the second best option and it will give incentive to the new fertiliser plants to optimise the capital and operating costs. 5.19.7 There is a need to promote the use of slow release fertilisers through appropriate fiscal measures so as to optimise the nutrient usage. The use of bio-ferti Users also needs to be encouraged. These are environment - friendly, low cost inputs. Petrochemicals 5.20.1 The petrochemicals industry, mainly based on a range of products derived from petroleum and natural gas, is highly capital and technology intensive. Being relatively new, the industry has the advantage of using state-of-the-art technologies, the production being internationally competitive. However, the industry suffers from the disadvantages of high input costs and high rates of taxes and duties. The result is that the prices ofpetro- chemicals in the country are way above the international prices. 5.20.2 During the Seventh Plan, implementation of Maharashtra Gas Cracker Complex (MGCC) at Nagothane, with a capacity of 300,000 tpa ofEthylene, was taken up by IPCL. Because of an unfortunate accident, the project got delayed and was commissioned only in the last quarter of 1991-92. Besides, IPCL has implemented a number of schemes for rehabilitation/expansion of its Polypropylene (PP) plant, revamping of its naphtha cracker, additional Xylenes production, Bicomponent Acrylic Fibre, etc. at its Baroda Complex. The other major facilities commissioned are: Aromatics plants of Bharat Petroleum Corporation Ltd. (BPCL), Bombay and Cochin Refineries Ltd.(CRL), Cochin and a number of downstream units based on availability of propylene from refineries at Vizag, Madras and Bombay. 5.20.3 The petrochemicals industry has now been delicensed. Letters of Intent were earlier issued for setting up crackers at Hazira, Auraiya, Gandhar, Vizag, Haldia and Assam and for expansion ofNOCIL cracker. The work on these crackers is in initial stages. It is expected that based on market considerations, these crackers would get phased suitably. 5.20.4 During the Eighth Plan, greater emphasis would be laid on performance plastics, (polyamides, polyacetals, polycarbonates, ABS) consumption of which is linked to the growth of automobile, electronics, telecommunication and other consumer items. The changing Indian scene with multi-fold growth of above industries would push the growth in consumption of these performance plastics Application Development Centres are being set up to propagate use of performance plastics. Petrochemicals industry is technology intensive and linkages between research, manufacturing, design, engineering and academics are proposed to be strengthened. Drugs and Pharmaceuticals 5.21.1 Indian drug industry manufactures a wide range of basic drugs and pharmaceuticals covering almost all therapeutic regimes. These include antibiotics, bacterials, steroids and hormones, vaccines, psychotropic preparations and a wide variety of synthetic drugs, including herbal preparations. The industry is quite widely distributed among FERA companies, public and private sector units and other medium scale units specialising in a few drugs. There were about 14,000 units producing drugs/formulations at the end of 1991-92. More than 30% of production of bulk drugs comes from units in the small scale sector, which, in turn, base their production on penultimate intermediates for a large number of items. 5.21.2 There are five public sector units namely, Indian Drugs and Pharmaceuticals Ltd.(IDPL), Hindustan Antibiotics Ltd.(HAL), Bengal Immunity Ltd.(BIL), Bengal Chemicals and Pharmaceuticals Ltd. (BCPL) and Smith Stan-istreet Pharmaceuticals Ltd.(SSPL). All of them, except HAL, have been in the red mainly due to outmoded plants, inefficient technology, high labour costs, weak marketing efforts, concentration on bulk drugs manufacture and excessive reliance on institutional or traditional sales outlets etc. 5.21.3 Since introduction of the Drug Price Control Order (DPCO), 1986, the pharmaceuticals industry has witnessed a good growth and for the last three years, the country has been a net exporter of drugs. In line with the prevailing economic environment, there is a need to review the DPCO and allow greater freedom to the industry in the matter of price fixation. While price control may be countinued for a few life-saving drugs, the firms producing such drugs may be allowed to diversify into other areas where they can make enough profit to off-set these losses. Alternatively, the Government could consider subsidising the use of such essential life saving drugs by poorer sections of the society while allowing the fixation of their prices by the market. 5.21.4 A strong technology base for the drug industry is necessary for its healthy development. This calls for vigorous and sustained R and D efforts. So far, the main thrust has been on process improvement and not much effort has been made to produce new drugs from the basic stage. During the last decade, processes for some of the important intermediates and raw materials have been developed within the country. A number of R and D Programmes have been identified to be taken up in a co-ordinated manner in the national laboratories, public sector undertakings and private sector units. Development of sophisticated formulations such as slow release forms, advanced drug delivery systems, etc., will also receive due attention. Research and development in the area of bio-technology by an understanding of DNA replication mechanism related to the country's needs will also receive due emphasis. Pollution control measures, industrial safety and energy conservation will be considered as integral parts of production activities. Pesticides 5.22.1 As more and more farmers are adopting multi-cropping practices using hybrid seeds, pesticides have become an important input to minimise crop losses and also as part of public health programme. Pesticides are first manufactured as technical grade chemicals, which are subsequently formulated in ready-to-use form both in the organised sector and small industries. As many as 137 pesticides have been approved for use in India, out of which, two (i.e. DDT/BHC) are high volume pesticides. The others are largely used by farmers for fighting pests of a variety of crops such as fruits, vegetables, cotton, groundnut, sugarcane, rice, wheat, etc. 5.22.2 The country is largely self-sufficient in the manufacture of pesticides but some of the intermediates as also new varieties of insecticides are being imported. During the Seventh Plan, a number of new pesticides such as Bu-tachlor, Isoproturon, Monocrotophos as well as Pyrethroids were taken up for manufacture to meet the specialised needs of the agricultural sector. 5.22.3 There is now greater awareness of environmental pollution and safety aspects and the new pesticides have to satisfy these criteria before being certified for use. DDT has been banned in Europe and U.S.A. as it was found to , enter the human food chain ultimately. DDT t production by Hindustan Insecticides Ltd. would also need to be gradually phased out. Existing centres in the country dealing with environmental and health monitoring of toxic substances under CSIR, ICMR and ICAR need to be upgraded to create facilities for regular monitoring of pesticides in the environment, with a view to minimising environmental and occupational health problems. 5.22.4 A UNDP aided Pesticides Development Programme has been taken up. The main objectives of this are:
Cement 5.23.1 The gradual de-control of cement has resulted in progressive increase in cement production as well as upgradation of technology. The country has now emerged as an exporter of cement. Besides, a good resource base, India has locational advantage in respect of cement trade as a number of neighbouring countries are importers of cement. The newer cement plants compare well with the plants in the world in terms of productivity and production cost and the country can easily export about 5 million tonnes per annum by 1996-97. Sugar 5.24.1 India is the largest producer of sugar-cane as well as sugar in the world. The sugar industry is the second largest agro-based industry in India. While the new generation of 2500 tpd mills produce better results, a number of old mills are in need of modernisation. Introduction ofco-genertion, electronic controls is being encouraged to optimise production parameters and improve productivity. Future sugar complexes should provide for down-stream industries using molasses and bagasse as raw-materials. To facilitate this molasses should be decontrolled so that the sugar complexes can be developed tor optimal benitits. After many years, the country has resumed sugar export. Such exports should be on a continuous basis and should not be determined on a year to year basis. Leather and leather goods 5.25.1 Leather and leather goods industry has emerged as one of the important foreign exchange earners in recent years. During the Seventh Plan, the value of exports rose from a level ofRs.584 crores to Rs.2030 crores. The exports in 1991-92 are expected to he around Rs.3200 crores. 5.25.2 There is a constraint on the availability of hides and skins, especially for export production. To bridge the gap between the requirement and availability of hides and skins, a series of measures would be necessary. These include setting up of a network of mini-modern carcass recovery centres all over the country, use of improved flaying tools and techniques and viable modern slaughter houses. Textiles 5.26.1 Textile industry is the single largest industry in India, accounting for about twenty per cent of the total industrial output and providing employment to around 15 million people. It is also an important contributor to India's exports, accounting for 26 per cent of the total value of exports in 1990-91. The textile industry passed through a severe crisis in the early part of the Seventh Plan mainly due to high cost of raw materials and labour, obsolete machinery, demand recession and competition from the powerloom sector. In order to promote modernisation of the industry, Textile Modernisation Fund (TMF) was introduced in 1986 with a corpus of Rs.750 crores. The response of the industry has been quite encouraging and it is proposed to continue TMF during the Eighth Plan. 5.26.2 The progress and implementation of the Textile Policy, 1985 were reviewed by a high powered committee set up in May, 1988 under the Chairmanship ofShri Abid Hussain, the then Member, Planning Commission. The committee has focussed on the institutional arrangements needed for restructuring of textile industry for its integrated development. The major recommendations of the Committee include restructuring and modernisation of the organised mill sector and institutional arrangements like Textile Restructuring Asset Trusts(TRATs) for improving its efficiency; institutional arrangements for area based development of handloom and powerloom sectors; upgrada-tion of cotton processing facilities; pre-eminent role of cotton as the main raw material, realistic pricing of synthetic fibres/yarns; devising ways and means for increasing textile exports; and upgradation of technology in the readymade garments and textile machinery industries. 5.26.3 In the Eighth Plan, greater emphasis will be laid on production of value-added, diversified and quality goods for export and increasing capacity utilisation, sophisticated design and product-mix and appropriate technology. The organised mill sector would concentrate increasingly on exports with bulk of the indigenous demand being met by the powerloom sector. The handloom sector will concentrate on high value products for domestic as well as export markets. The textile exports are expected to be Rs. 28,000 crores in 1996-97 at a compound growth rate of 18% per annum. To achieve this, emphasis will be laid on exports of non-quota items, higher unit-value realisation and better marketing techniques. Jute 5.27.1 The jute industry passed through a severe crisis in the early part of the Seventh Plan due to demand recession, imbalance in cost-price structure and competition from synthetic packaging materials. The absence of desired thrust on modernisation/diversification and widespread sickness in the jute industry led to closure of a number of mills. In 1986, the Government announced a package of policy measures consisting of Jute Modernisation Fund Scheme (JMFS) ofRs.150 crores, Special Jute Development Fund (SJDF) of Rs.100 crores, duty free import of identified jute machinery items for modernisation and mandatory usage of jute packaging materials by specified end- user sectors. However, the pace of modernisation has been rather slow. As stated earlier, not only is this to be speeded up but jute industry will have to concentrate on diversification and production of high value products. The mandatory usage of jute for packaging should only be a temporary feature. Ultimately jute must compete on its inherent strengths. Paper and Paper Board Industry 5.28.1 Paper Industry in India is more than a century old. The capacity is almost evenly divided between the large units (organised sector) and a number of small paper mills scattered throughout the country and mostly based on non-wood materials such as bagasse, fibrous crop residues, jute cuttings, cotton waste, cotton rags and waste paper, etc. 5.28.2 The main problems facing the large paper mills are inadequate availability of forest-based raw materials, technological obsoles-cence, high energy consumption, high capital cost of modernisation, high cost of inputs, management deficiencies and scarcity of skilled labour. In the case of small paper mills, the problems are inefficient chemical recovery systems leading to high production cost as well as environmental pollution, obsolete equipment with low productivity and high energy consumption and shortage of raw materials. The National Forest Policy has ruled out captive industrial plantations and requires paper and other forest-based industries to procure their raw materials by establishing direct relationship with individual growers of trees. However, this arrangement has proved to be unworkable because growing trees takes 7-8 years. It is, therefore, imperative to review this aspect and consider making available degraded and waste lands to the industry for captive plantations. Privately owned lands should also be allowed to be used for plantations. The paper industry would also need to switch over as much of the existing capacity as possible to the use of bagasse and other agricultural wastes and modernise its equipment accordingly. 5.28.3 With steady increase in sugar production, there is a need for forward planning and integrating paper production with sugar production, using bagasse as the raw material. Such a plant has already been operating successfully in Tamil Nadu. Many more such plants need to be planned. This requires adequate supply of coal or some other alternative fuel, for feeding the boilers of sugar mills and co-generating power for paper production. Newsprint 5.29.1 There are two major projects under implementation Uttar Pradesh bagasse basetl. newsprint project of NEPA with a capacity of 89,000 tonnes per annum and 200 tpd composite newsprint and printing and writing paper project of Punjab Agro Newsprints Ltd. Both these projects are scheduled to be completed by the end of the Eighth Plan. The newsprint manufacture is capital intensive and involves long gestation period. Even though the prices are not administered, profitability is comparatively low and the private sector is not coming forward to take up manufacture of newsprint. The country is spending about Rs.300 crores of foreign exchange per annum on newsprint import. There is a need to encourage creation of bagasse based additional capacity in tandem with new sugar capacity. Such "Integrated sugar/newsprint Units" would have many external economies and would improve viability of both the industries. Atomic Energy 5.30.1 The activities of the Department of Atomic Energy under Industry and Minerals sector pertains to requirement of heavy water, nuclear fuel, instruments and controls, spent fuel recovery and waste disposal for the nuclear power reactors. 5.30.2 During the Seventh Plan, the on-going heavy water project at Thal was completed and commissioned in 1986. The Manuguru project got inordinately delayed. It commenced production in March, 1991 alongwith the heavy water plant at Hazira taken up during the Seventh Plan. 5.30.3 The production of heavy water has been well below the capacity at most of the plants due to a variety of reasons such as feed limitation (Talcher, Nangal and Thal), steam and power limitations (Kota), reduced level of deuterium in the feed (Baroda, Tuticorin and Thal), etc. Efforts should be made to eliminate these limitations for a reasonable level of production. 5.30.4 The performance of Hazira and Manuguru Plants is expected to be quite good in view of the improvements made over the previous plants and provision of a captive power plant at Manuguru. 5.30.5 The Nuclear Fuel Complex (NFC) has undertaken two schemes for augmenting nuclear fuel supply : Expansion phase-I and Augmentation of Fuel and Zircaloy capacity. The NFC Expansion phase-I for raising production capacity of zircaloy from 35 tpa to 50 tpa and of fuel from 90 to 225 tpa, has been considerably delayed due to deficiencies in the design of equipment and delay in the import of sophisticated equipment like sintering furnaces and vacuum-arc melting furnaces. The scheme is now expected to be completed in 1992-93. 5.30.6 The capacity of NFC is being farther augmented from fuel capacity of 225 tpa to 300 tpa and zircaloy capacity from 50 tpa to 80 tpa. The project is now expected to be completed together with phase-I expansion in 1992-93. 5.30.7 Augmentation of Nuclear Fuel capacity also requires additional mining and mill for uranium concentrates for which a Rs.495 crores project at Narwapahar and Turamdih was taken up in the Seventh Plan. The project, however, suffered a set-back due to two years' delay in getting environmental clearance. The project is now scheduled to be completed by the end of 1993. 5.30.8 The Orissa Sands Complex (OSCOM) Project of Indian Rare Earths Ltd. (IRE) in Orissa was delayed and commissioned in October, 1987. Due to various technical problems, plant performance remained in the range of 10-20% of capacity before suspension of operations in 1991. Rectification of these problems is proposed to be taken up in the Eighth Plan. 5.30.9 The following new units are proposed to be taken up during the Eighth Plan:
5.30.10 Titanium Sponge Plant and Zirconium Sponge Plant will be put up in same premises as a number of facilities are common. The possibility of setting up these units in the private sector is being explored. . Statement -5.1 Profitability
Profile of Public Sector Enterprises
Statement 5.2 Actual
Expenditure For Industry And Minerals Projects In The Central Sector
Note: A: At Current Prices. B : At 1984 Prices. Statement 5.3 Outlays
For Central Industrial and Mineral Projects for The Eighth Plan (1992-97)
Note: * - Includes external aid routed through the budget. Statement 5.4 Eighth
Plan (1992-97) Outlays - States / Union Territories
Statement 5.5 Capacity And Production For Selected Industries - Indicative Targets For 1996-97.
Statement - 5.5 (Contd.)
Statement No.5.5 (Contd.)
Statement No.5.5 (Contd.)
$Capacity
in Million Spindles and Production in Million Kgs. |
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