Govt to bring legislation for construction equipment manufacturing

Photo: Reuters

The government is firming up a Construction Equipment Manufacturing (CEM) legislation to introduce a separate regulatory framework and Act for off-highway equipment, a top official said on Wednesday.

The proposed legislation is similar to the Central Motor Vehicle Rules and will soon be placed before Parliament for its enactment. It will cover construction equipment that is not wheeled and aim to counter the use of spurious parts.

"It will be making certain regulations for off-highway construction equipment which are not wheeled because for the wheeled, the road and transport ministry is making regulations," Heavy Industry Secretary Girish Shankar said at an Assocham event in New Delhi.

He adds, "So, the standards will be there and what kind of people can work and all those regulations will be coming. This will be an enabling enactment. Along with that, it will be providing for testing and certification of equipment."

Asked when the proposed legislation will become a reality, Shankar said: "As soon as possible. We have to hear from the stakeholders particularly the construction and equipment industry. They will be coming with their comments very soon. Once they are available, we will finalise the draft and bring it before Parliament."

He explained that the legislation is required because the industry has to gear itself towards quality and adoption of the right technology and discourage use of spurious spare parts.

The secretary said the heavy industry ministry has also proposed allowing the use of external commercial borrowing (ECB) to finance domestic equipment, excluding construction equipment in future FTAs, including locally produced construction equipment in export market access incentives and developing a dedicated R&D and advanced test facility.

"How to improve on the input costs via financing external commercial borrowings, those things are being considered," Shankar said.

He promised that the ministry will take up the issues in leasing, particularly those of multiple taxations, with its finance counterpart.

"We have to introduce a friendlier tax structure to introduce a separate regulatory framework and Act for off- highway equipment. We have already drafted a legislation for CEM," Shankar said.

The government is setting up experience centres for advanced manufacturing where stakeholders can get a first-hand look at the benefits from adoption of Industry 4.0.

"We will be creating certain experience centres along with the industry, academia and the equipment suppliers, equipment for Industry 4.0, particularly the automation and the software industries. We have already finalised one with a partnership with IIT Kharagpur," Shankar said.

"We are thinking of having it in Bengaluru and other places where even smaller units, medium scale industry can experience how they can adopt Industry 4.0 and improve their productivity and become more competitive," he added.