NEW DELHI: The government is likely to provide necessary stimulus to the heavy construction equipment market mainly to drive residential, commercial and industrial development. This would lead to strengthening of public-private partnership for economic growth. Final details of the proposal are under discussion and the finance minister is likely to discuss it internally soon, Finance Ministry sources said.
The government has already introduced many initiatives to lift the sector from its current dormant conditions. The measures include authorising the Indian Infrastructure Finance Company Limited (IIFCL) to raise Rs 10,000 crore by issuing tax-free bonds to make highways and port projects funding worth Rs 25,000 crore available to the sector. The IIFCL has also been given the nod to raise more funds worth Rs 30,000 crore to fund projects worth Rs 75,000 crore over the next 18 months.
“The measures need to be infused into the ancillary sector, too. The construction equipments used for tasks like mining, lifting, material handling and excavation, need a boost,” said Alireza Moghaddam, chairman, AMIDT Group.
Rapid urbanisation and infrastructural growth have fuelled construction equipment industry demand over the past few years. “The Indian construction equipment industry is anticipating greater demand ahead owing to the government’s intent on increasing development of urban infrastructure and the mining sector,” said a senior official in the urban development ministry.
According to Icra report, demand for mining equipment had seen limited support by the end of 2015, due to a weak outlook for steel, which impacted iron ore mining. It expects resolution of problems to eventually lead to a recovery of the industry in calendar year 2017.
Infrastructure being an integral part of the initiative, provides a boost to the construction equipment manufacturing industry. “What is required is forward thinking by the manufacturers to crack this dynamic field and the market is geared up to move up after a long slump,” said Moghaddam.