Cabinet gives nod to Rs 69,725 crore incentives for maritime sector

The Union Cabinet approved shipping and maritime development sops worth Rs 69,725 crore Wednesday. This included a maritime development fund worth Rs 25,000 crore, an enhanced shipbuilding financial assistance scheme of Rs 24,736 crore, and a shipbuilding development scheme of Rs 19,989 crore.

In addition to these, cabinet gave its nod to four laning the Sahebganj-Bettiah portion of national highway 139W, and doubling Bakhtiyarpur-Rajgir-Tilaiya section of Railway line. Both these connectivity projects are in Bihar. A Rs 1,866 crore productivity linked bonus for railway employees also got approved.

Commenting on the impact of the shipbuilding incentives, union Railways, Information Technology, and Information Broadcasting Minister Ashwini Vaishnaw said these will arrest the decline of the domestic shipping industry.

“Shipbuilding is the mother of the heavy engineering industry...this plan is for a 10-year period,” he told journalists. An official presentation said these measures will unlock 4.5 million Gross Tonnage of shipbuilding capacity and attract investments of roughly Rs 4.5 lakh crore into India’s maritime sector.

Under this package, the Shipbuilding Financial Assistance Scheme (SBFAS) will be extended till March 31, 2036 with a total corpus of Rs 24,736 crore. An official statement said the scheme aims to incentivise ship building in India and includes a Shipbreaking Credit Note with Rs 4,001 crore allocation. A National Shipbuilding Mission will also be established to oversee these schemes.

A Rs 25,000 crore Maritime Development Fund (MDF) has been approved to provide long-term financing for the sector. This includes a Rs 20,000 crore Maritime Investment Fund having 49% participation from the centre and a Rs 5,000 crore Interest Incentivisation Fund. This will reduce the effective cost of debt and improve project bankability.

In addition to these, the Rs 19,989 crore Shipbuilding Development Scheme (SbDS) has been approved. It aims to expand domestic shipbuilding capacity to 4.5 million Gross Tonnage per annum, support mega shipbuilding clusters, infrastructure expansion, establish the India Ship Technology Centre under the Indian Maritime University. This scheme will provide risk coverage, including insurance support for shipbuilding projects.