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The much-awaited National Manufacturing Policy was approved on Tuesday by the Union Cabinet. It comes at a time when the country is facing a slowdown in manufacturing and industrial growth.
The policy aims to create 100 million jobs within a decade and increase the share of manufacturing in the country's GDP to 25 per cent by 2022 from the current 15-16 per cent (a level that has been stagnant since 1980).
Among the key instruments for realising these goals is the setting up of National Investment and Manufacturing Zones (NIMZ). The minimum land area of each NIMZ – or greenfield integrated industrial townships with the modern infrastructure – is to be 5,000 hectares.
Announcing the policy, the Commerce, Industry and Textiles Minister, Mr Anand Sharma, told reporters that, “No cultivable, agricultural and forest land will be allowed to be acquired for NIMZs.”
The first phase of the NIMZ will be established along the Delhi Mumbai Industrial Corridor which will see early results in the next few years, he added.
The policy also has a host of fiscal incentives mainly for the micro, small and medium enterprises.
In this regard, an official statement said, “Individuals will be eligible for relief on long-term capital gains tax if the sale proceeds of a residential property are reinvested in equity of a new start-up company,” adding that tax pass through status for venture capital fund will be available if they focus on manufacturing.
The other significant features are the single window clearance mechanism to cut red-tape and the high-priority for skill development. “Private sector will be given standard deduction of 150 per cent of expenditure for skill development institutes,” the statement said.
The policy was finalised after over 20 months of intense stakeholder consultations. These discussions had seen difference of opinion, notably from the Ministries of Environment and Labour.
PROTECTING LABOUR
With a view to protect the interests of labour in cases of closure of units, the policy has a mechanism of fund to insure the workers against such loss. The policy also features third party inspections in addition to inspections by Government agencies for compliance of both environment and labour norms.
The focus will also be on ‘green manufacturing'. In this regard, a Technology Acquisition Fund will be set up to acquire global technologies and build a patent pool especially for equipment manufacturing that seeks to reduce energy consumption.
SMEs will be given access to this patent pool up to a maximum of Rs 20 lakhs for acquiring patented technologies, the statement said.
The policy statement says that support will be given to employment-intensive industries to ensure job creation, adding that, “Special attention will be given to textiles and garments; leather and footwear; gems and jewellery; and food processing industries.”
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