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Time has run out for the current government to announce the much-publicised new industrial policy that hoped to attract foreign investments worth $100 billion annually, create jobs and ease regulations as the Model Code of Conduct now in place makes it difficult for new measures to be implemented.
“Officials who gave the final shape to the new industrial policy tried their best to speed up things and get the last-mile issues sorted out before the announcement of election dates, but it did not work out. It can now be hoped that the new government that comes to power after the general elections takes forward the work already done and announces the policy soon,” a government official told BusinessLine .
Delay in approval
The Department for Promotion of Industry and Internal Trade (DPIIT), formerly known as the DIPP, had drawn up the new industrial policy sometime last year, and had also sent it to the Union Cabinet for its approval. The proposal, which when implemented would have replaced the 27-year-old existing policy, however, led to a lot of questions from Cabinet members.
“DPIIT officials gave an extensive presentation on the nuances of the proposed policy including changes in labour laws, policy to ease investments and business and also ushering in of new technology including artificial intelligence,” the official said.
But doubts on various aspects of the new industrial policy remained and a Cabinet approval was elusive.
“One reason why there was a delay in approval was the fact that the proposal was multi-faceted and included sensitive issues such as labour regulations, foreign investment rules, reversing the inverted duty structure, and lending to the micro and small sectors,” the official said.
The new industrial policy proposes to increase share of manufacturing in the country’s GDP to 25 per cent by 2022 from the existing 15-16 per cent.
The draft policy also proposed the establishment of a body with representation from the Centre and the States to work on changes in labour laws whenever required. It suggested strengthening of municipal bodies as well.
Increased competition from China was also factored in by the draft policy and its effects on the MSME sector and ways to deal with it discussed.
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