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Cabinet approves Revised National Manufacturing Policy Print E-mail
Written by Ganesh   
Wednesday, 26 October 2011
New Delhi: The Cabinet approved the revised proposal of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry to put in place a National Manufacturing Policy. India Inc welcomed the Cabinet approval of the National Manufacturing Policy on Tuesday.

The Cabinet in its meeting held on 15th September 2011 considered the National Manufacturing Policy and directed that the policy may be considered by a Group of Ministers (GOM) for further harmonizing the differences in some inter-ministerial positions notably relating to Ministry of Labour and Employment and the Ministry of Environment and Forests.

The GOM in its meeting held on 14th October 2011 has resolved the relevant issues. A revised note incorporating the recommendations of the GOM has been approved by the Cabinet today.

The National Investment and Manufacturing Zones (NIMZ) will be standalone, integrated industrial townships that will be autonomous and self governing under Article 243Q-C of the Constitution. At least seven National Investment and Manufacturing Zones are proposed to be set up in the North and West. A survey has been commissioned to set up similar zones in the South. The first phase will be set up along the Delhi-Mumbai Industrial Corridor (covering Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, Maharashtra and Gujarat) and is expected to come on stream in the next few years.

The environment ministry will give priority in processing cases from the manufacturing zones and designate officials from the state pollution control board to fast track clearances. Waste water management, rain water harvesting, water and environment audit and green buildings are mandatory within the NIMZ.

"The clearance of the National Manufacturing Policy by the Cabinet comes as a huge confidence booster for the Indian economy. This is a historic step in the economic reform agenda and will set the pace for a much higher trajectory of growth in employment, investment and output. Finally, India is dealing with the missing piece in India's economic development - that of manufacturing. CII believes that with this unequivocal clearance by the Cabinet of this landmark policy, Indian Industry is taking a clear message about the Government's resolve to take the reform process forward," said B Muthuraman, President, CII.

"The forward-looking and progressive policy as finally presented is eminently sensible and addresses a number of issues of concern to industry. The Government and especially the Ministry of Commerce and Industry is to be commended for converging such a diverse range of opinions and issues raised by various stakeholders and bringing out a policy that meets multidimensional objectives towards the overall goal of inclusive growth," he added.

"India has taken a historic step today that would revolutionize manufacturing sector in the country. CII welcomes the clearance of the ‘National Manufacturing Policy’ by the Cabinet. CII has been actively advocating for an early announcement of the policy and is confident that the much awaited policy announcement would create an upswing in the overall business confidence. Timing of the approval is also important and assumes greater significance given the domestic business environment and current global uncertainties. The announcement of the policy at this critical time would generate momentum resulting in long term positive impact on the growth aspirations," said Chandrajit Banerjee, Director General, CII.

The major objectives of the National Manufacturing Policy are to increase the sectoral share of manufacturing in GOP to at least 25% by 2022; to increase the rate of job creation so as to create 100 million additional jobs by 2022; and to enhance global competitiveness, domestic value addition, technological depth and environmental sustainability of growth.

The policy has been formulated after detailed consultations with the industry; subject matter experts; State Governments and the concerned Ministries/Departments of the Government of India. The policy envisages specific interventions broadly in the areas of industrial infrastructure development; improvement of the business environment through rationalization and simplification of business regulations; development of appropriate technologies especially green technologies for sustainable development and skill development of the younger population.

Industrial infrastructure development is envisaged not only generally but also through the creation of large integrated industrial townships called National Investment and Manufacturing Zones (NIMZs) with state-of-the-art infrastructure; land use on the basis of zoning; clean and energy efficient technologies; necessary social and institutional infrastructure in order to provide a productive environment to persons transitioning from the primary to the secondary and tertiary sectors. The land for these zones will preferably be waste infertile land not suitable for cultivation; not in the vicinity of any ecologically fragile area and with reasonable access to basic resources.

It is envisaged to ensure compliance of labour and environmental laws while introducing procedural simplifications and rationalization so that the regulatory burden on industry is reduced. The interventions proposed are generally sector neutral, location neutral and technology neutral except the attempt to incentivize green technology for sustainable development No subsidies are 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.

The contribution of the manufacturing sector at just over 16% of India's GOP is much below its potential and a cause of concern especially in the context of other Asian countries in similar stages of development. This also has its socio-economic manifestations and prevents India from fully leveraging the opportunities of globalization. India is a young country with over 60% of its population in the working age group. With over 220 million people estimated to join the work force in the next decade, the manufacturing sector will have to create gainful employment for at least half this number. With a view to accelerating the growth of the manufacturing sector, the manufacturing policy proposes to create an enabling environment suitable for the sector to flourish in India.

Last Updated ( Wednesday, 26 October 2011 )
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