Shipbuilding Industry capable of generating Mass Employment in Remote, Coastal and Rural Areas: Mansukh Mandaviya

New Delhi: In a written reply to a question in Rajya Sabha today the Minister of State for Shipping (I/C) and Chemical & Fertilizers Shri Mansukh Mandaviya informed that the Indian shipyards employ around 30,000 people at present which will substantially go up once this sector is revitalised. Among manufacturing activities, shipbuilding has one of the highest employment multipliers, which is 6.4. It is capable of generating mass employment in remote, coastal and rural areas, thereby absorbing the labour migrating from farm fields into manufacturing facilities which are set up by shipyards and their ancillaries. With revitalization of this sector and with consistent orders on shipyards, more manpower will be required and it is expected to increase employment.

He further informed that the Shipbuilding industry is a strategically important industry due to its role in energy security, national defence and development of heavy engineering industry. However, shipbuilding is primarily an order driven industry and each vessel is built on order. The details are given below:

(i) Shipbuilding industry is very strategic for any country owing to the significance of ships in both trade and also national defence. Ships play a major role in transportation of oil and gas and most of the crucial commodities which run the economy. Shipbuilding industry provides facilities for building of various types of ships/vessels such as oil tankers, bulk carriers, cargo vessels, gas carriers and product carriers etc.

(ii) Cochin Shipyard Limited, a PSU under administrative control of Ministry of Shipping is constructing an Indigenous Aircraft Carrier which will boost India’s national defence. Further, some shipyards are also building various types of defence vessels such as warships, submarines, corvettes, missile boats, offshore patrol vessels, floating border outposts, etc. Shipbuilding industry promotes indigenous development of complex design and engineering skills which are essential for sustenance and growth of indigenous defence capabilities.

(iii) Nearly 65% value of the built ship is contributed by heavy engineering industry such as steel, electronics, engineering and electrical equipment, port infrastructure as well as trade and shipping services. Promotion of shipbuilding industry also develops ancillary industries.

The steps taken by Ministry of Shipping to promote shipbuilding industry are given below:

(i) Financial Assistance Policy on Shipbuilding: To promote shipbuilding in Indian shipyards, the Union Cabinet has on December 9, 2015 approved New Shipbuilding Financial Assistance policy for Indian shipyards for contracts signed during a ten year period, viz. 2016-2026, with budgetary projections of Rs. 4,000 crore for this period.

(ii) Right of Refusal to Indian Shipyards: The Union Cabinet has approved on 09.12.2015 that all government departments or agencies including CPSUs have to provide Right of First Refusal to Indian shipyards while procuring or repairing vessels meant for governmental or own use till 2025, after which only Indian shipyards would build and repair vessels for above mentioned organisations. The modified guidelines have been uploaded on website of Ministry of Shipping in February, 2019.

(iii) Grant of Infrastructure Status: The Department of Economic Affairs has notified the inclusion of standalone ‘Shipyards’ in the Harmonized Master List of Infrastructure Sub-sectors on 13thApril,2016. With this inclusion, shipyards will be able to avail flexible structuring of long term project loans, long term funding from Infrastructure Funds at lower rates of interest and for a longer tenure equivalent to the economic life of their assets, relaxed ECB norms, and issuance of infrastructure bonds for meeting working capital requirements.

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