Cabinet approves new manufacturing policy
The government Tuesday cleared the long-awaited National Manufacturing Policy (NMP) which seeks to set up mega industrial zones and create 100 million jobs by 2022.
The policy that was approved by the Union Cabinet has diluted the proposals relating to labour and environmental laws, following consultations on the original draft by a Group of Ministers headed by Agriculture Minister Sharad Pawar.
While the original proposal, enumerated in 2009 draft, advocated a flexible labour and environmental law for the mega industrial zones, the policy cleared today rule out any such flexibility.
It said the "exit policy (for workers) will be prepared keeping in view the provisions for protection of workers' rights within the statutory framework".
On management of National Investment and Manufacturing Zones (NIMZs), the policy says the governing body in the form of special purpose vehicle (SPV) would be headed by a government official.
Under the earlier proposal, the SPV was to be headed by a Chief Executive Officer.
Evading a direct reply to a question on dilution of the original proposal, Commerce and Industry Minister Anand Sharma said "there were concerns" that was why a GoM was set up.
"It (concerns) was addressed in participatory and consultative manner. We came out with a robust policy, which is one of the major policy rollouts in recent times," he said.
"The NMP seeks to enhance the share of manufacturing in the GDP to 25 percent within a decade and create 100 million jobs in manufacturing as part of the inclusive growth agenda of the UPA," Sharma said after Cabinet cleared the policy.
The contribution of the manufacturing sector in India's GDP at present is just over 16 percent.
To encourage the manufacturing sector, the government will provide fiscal incentives to the industry, particularly to the small and medium enterprises (SMEs).
The Cabinet had earlier taken up the NMP in its meeting on September 15. The matter was, however, deferred following differences between ministries over the labour and environment issues.
The NMP, Sharma said, "will ensure compliance of labour and environmental laws while introducing procedural simplifications and rationalisation so that the regulatory burden on the industry is reduced".
He said interventions proposed are generally sector neutral, location neutral and technology neutral, except the attempt to incentivise green technology for sustainable development.
"No subsidy is proposed for individual units or areas. The basic thrust is to provide an enabling environment for tapping the potential of the private sector and the entrepreneurial skills of the younger population," Sharma said.
The policy envisages specific interventions broadly in the areas of industrial infrastructure development and improvement of the business environment through rationalisation and simplification of business regulations.
Besides, development of appropriate technologies, especially green technologies for sustainable development, and skill development of the younger population are envisaged, Sharma said.
The NMP aims at creating large integrated industrial townships.