Tuesday, 22 November 2011

Govt plans Rs 2,500-cr fund for auto component sector



Government is expected come up with Rs 2,500 Fund approval for the Indian Auto Component Market in its 12th Five Year plan. the new initiative called ‘Technology Upgradation and Development Scheme' would aim to give the $40-billion domestic component industry access to finance at reduced rates of interest. This has been suggested in the Report of the Working Group on Automobile Sector for the 12th Five-Year plan (2012-17).

The ‘Auto Component Technology Development Fund' will also be created under the same scheme. This would be used for financing half of the project cost through soft loans, with an interest subvention of four per cent that would be met from the fund corpus.

“We have been pushing for this for the last three years. We had asked for a Rs 7,500 crore fund over five years, but as an interest subvention. The industry will require Rs 15,000 crore in the period for research and upgradation, so we were looking for the Government to put up half of that amount,” Mr Vinnie Mehta, Director-General, Automotive Component Manufacturers' Association said.

The industry, which aims to almost triple its size to $115 billion by 2020, envisages annual capital investment of up to $3 billion.

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