We can have a maximum of 12 manufacturing zones: Sharma

Arun S. New Delhi | Updated on March 13, 2018 Published on October 25, 2011


The policy has a better dispensation for the labour than the existing norms. There is a job loss policy to ensure that workers get suitable compensation in case of business losses or closure of units. – Mr Anand Sharma

The announcement of the National Manufacturing Policy stems from one of the main political commitments of the Congress Party at its plenary last December at Burari (in Delhi), the Commerce, Industry and Textiles Minister, Mr Anand Sharma, said.

With around 225 million Indians set to join the workforce by 2025, the policy aims to create 100 million jobs by 2022. It also aims to increase the share of manufacturing in the GDP to 25 per cent within a decade.

Talking to Business Line after announcing the policy on Diwali eve, the Minister said its emphasis is on skills training as well as incentivising green technologies and small and medium enterprises.

He also sought to allay apprehensions on land acquisition for industry and concerns over easing labour and environment norms.

Excerpts from the interview:

A key instrument to achieve the policy's objectives is setting up of National Investment and Manufacturing Zones (NIMZs). But the minimum area of each NIMZ is set at 5,000 hectares. Even Special Economic Zones with lesser land requirement faced problems in land acquisition. With the country having seen many agitations over land being acquired for industry, don't you think it will be difficult to acquire so much land?

The Centre is not going to acquire land for NIMZs. But I have letters from Chief Ministers of States, who in anticipation of the policy rollout, have already created huge land banks for NIMZs. States without such land banks won't be in the picture.

So it is for the States to identify the required land. The trunk infrastructure will be financed by the Centre including through viability gap funding. A Special Purpose Vehicle will develop the zone infrastructure on a public-private partnership basis. But we are clear that only non-agricultural land will be allowed for NIMZs.

Don't mix up NIMZs with SEZs. SEZs proliferated in hundreds. Here we are talking of just seven smart cities which are coming up under the Delhi-Mumbai Industrial Corridor. We can accommodate a maximum of another five. Let us see which States are lucky to get it. India will be hugely benefited if we have 12 NIMZs.

What do you have to say on concerns that the manufacturing policy will make it easier for companies to ‘hire and fire' labour?

That is a misconception. The policy has a better dispensation for the labour than the existing norms. There is a job loss policy to ensure that workers get suitable compensation in case of business losses or closure of units. This compensation will be equivalent to 20 days' average pay (up from the present 15 days) for every completed year of continuous service or any part of that in excess of 6 months.

A Special Purpose Vehicle will monitor this. As an alternative, the SPV can opt for a sinking fund mechanism to insure workers against job loss due to closure of a unit. If there is surplus labour or if a unit is closed, the SPV will make an effort to redeploy the retrenched workers to other units in the NIMZ.

Can you elaborate on the incentives in the policy?

I think there are more incentives in this policy than the SEZ policy. But we are not giving any incentives for any individual industry in the NIMZ. This is because we don't want the existing industries outside the NIMZs to suffer a non-level playing field because of competition from the units in NIMZs. We are only giving incentives for setting up the zone, skill development and promotion of green technology. The running theme of the policy is that it is environment-friendly.


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Published on October 25, 2011
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