The BJP Government announced its intention to set up a number of sectoral clusters and parks in this year’s Budget and also push production in Special Economic Zones to boost sagging manufacturing.

But, exporters say that dishing out ‘more of the same’ policies won’t suffice and the Government needs to learn from its past mistakes. Focus needs to be on real issues, such as availability of adequate power, infrastructure facilities, labour, timely clearances, land acquisition and policy stability for such initiatives to be a success.

The Government aims to increase the share of manufacturing the GDP to 25 per cent from the present 16 per cent over the next decade.

There have been some success stories related to industrial clusters.

For instance, the Netaji Apparel Park in Tirupur is functioning well with 52 entrepreneurs operating their garment manufacturing units. Investments in this project are in the range of ₹92 crore in infrastructure and factory buildings and about ₹150 crore worth of machinery is deployed.

However, other textile parks that were set up in the region under the Scheme for Integrated Textile Parks approved in the 10th Plan have not been successful. Manufacturers say that the main issues were bureaucratic inefficiency, land acquisition problems and lack of interest of entrepreneurs.

Southern India Mills Association textile park in Cuddalore is a cluster for dyeing and printing units which has been stuck for the past four years.

Besides bureaucratic hurdles, this park is facing opposition from local villagers who have not been adequately compensated during land acquisition.

Manikam Ramaswami, CMD, Loyal Textile Mills, who was the first Chairman of the park, says the project is “lacking in mettle’’ from the State Government side and local powers were hampering the project.

“The park is very important because it can take care of the pollution problem in textile manufacturing with its ocean-based treatment idea,” he added.

Labour shortage Availability of adequate labour is another factor hampering manufacturing.

“You cannot expect people to travel long distances to a textile park. In garment-manufacturing, small units located in semi-urban centres find resources easily compared with large clusters set up in far-flung places,” Ramaswami said.

FIEO President Rafeeque Ahmed, who is also a leather products manufacturers, believes that the sure way to boost manufacturing is for the Government to set up turnkey export parks.

“If exporters get a place to set up operations where they do not have to worry about acquiring land and getting clearances, production would go up even without extra incentives,” he said.

He said his organisation would propose to the Government to set up parks, which would be normal domestic tariff area, in every sector.

The Finance Minister, in his Budget speech, also assured the revival of SEZs and make them effective instruments of industrial production, economic growth, export promotion and employment generation.

Scrap MAT SEZ developers and units say that a revival can happen only when the Government restores predictability in the policy regime by removing the Minimum Alternate Tax and Dividend Distribution Tax, imposed in 2012.

PC Nambiar, Chairman, The Export Promotion Council for EOUs & SEZs, said it had become difficult for developers to bring in investments in such a situation. In a letter written to Finance Minister Arun Jaitley, Nambiar said there was a need for an urgent review of the SEZ Policy.

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