The Hindu Business Line : Centre to grant industrial licences for strategic sectors

THE Union Government has decided to grant industrial licences (ILs) to entrepreneurs directly against their applications for projects in the licensed sector. This step is expected to facilitate the entrepreneurs to ensure speedy implementation of projects in such strategic sectors such as defence-oriented production, atomic energy and rare earths etc.

This procedure, however, will not apply to manufacture of items reserved for exclusive production in the small sector, according to a release issued here on Saturday by the Department of Industrial Policy & Promotion (DIPP) in the Ministry of Commerce and Industry.

Such applications, which relate to the manufacture of SSI items, will continue to be processed as per the existing procedure, that is, the issue of a letter of intent (LoI) in the first instance and the conversion of the LoI into an IL after the execution of a legal undertaking with the Directorate General of Foreign Trade (DGFT) for fulfilment of conditions relating to export obligation.

The release also clarified that, having obtained the IL for projects in the licensed sector, it would be the responsibility of the entrepreneur to ensure that all requisite approvals and clearances under other statutes, regulations and notifications issued by the Centre or the State governments are obtained for the manufacturing activity specified in the IL.

Under the existing procedure hitherto, a LoI is issued to the entrepreneur in the first instance after consideration of an application for IL for setting up an industrial undertaking or expansion of the existing unit or for the manufacture of a new article. The conditions contained in the LoI are required to be fulfilled within a period of three years or within the extended period of validity as may be specifically allowed by the Government.

These conditions usually relate to setting up of pollution control equipment, site clearance from the State Government and certain special conditions for specific sectors. On fulfilment of the prescribed conditions, the holder of the LoI is required to approach the Secretariat for Industrial Assistance (SIA) and the administrative Ministry concerned for getting the LoI converted into an industrial licence.

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