National Manufacturing Policy
and NIMZs
|
|
|
|
|
Rama Krishna Vadlamudi,
|
||
The Government of India is proposing to bring
in a new National Manufacturing Policy (NMP) which aims to increase the share
of manufacturing in GDP to 25 per cent by 2022 and create 10 crore jobs in the
manufacturing sector (the share of manufacturing remained stagnant at 16 per
cent between 2000-01 and 2010-11). The Union cabinet had on 25 October 2011
approved the NMP which was the brainchild of the Department of Industrial
Promotion and Policy under the Commerce & Industry Ministry.
Key features of the new National Manufacturing
Policy are:
v To
increase the share of manufacturing sector in GDP to 25 per cent by 2022
v To
create 10 crore jobs in the manufacturing sector by 2022
v A
key platform for achieving the NMP’s objectives is the creation of National
Investment and Manufacturing Zones or NIMZs in select towns/areas
v The
land acquisition for the NIMZs will not be done by the Central Government, but
will be done in partnership with the state governments
v No
cultivable, agricultural or forest land will be allowed to be acquired for
NIMZs
v The
new policy aims to bring more benefits to workers – a job loss policy promises
adequate compensation to labour or to redeploy them to other NIMZs in case of
closure of units
v Tax
incentives will be provided to small and medium enterprises (SMEs)
v More
thrust will be given for green technologies and skills training and development
v Private
sector will be given standard deduction of 150 per cent of expenditure for
skill development initiatives
v Sectors,
like, capital goods, aerospace, shipping, IT hardware, solar energy and telecom
equipment will be given priority
v Single-window
clearance is promised to cut bureaucratic delays
v Proposes
to sanction Rs 17,500 crore over the next five years for developments of
integrated industrial townships in DMIC
v Special
attention will be given to employment-generating sectors, like, textiles &
garments, leather & footwear, food processing industries, and gems &
jewellery with a view to creating more jobs
What are NIMZs?
The NMP envisages
setting of large industrial townships called National Investment and
Manufacturing Zones (NIMZs) which will enjoy good infrastructure, single window
clearances, lesser government regulations and fiscal incentives.
These greenfield
DMIC
is a large infrastructure project that aims to industrialise areas between Delhi Japan
The NIMZs will be
set up with private sector participation and with the active involvement of
state governments.
The commerce and
industry minister, Anand Sharma, has stated that seven smart cities will be
coming up under DMIC in the first phase. He further said that a total of 12
NIMZs would be allowed in all probability.
Criticism of the NMP
The industry
associations have generally welcomed the NMP though some have expressed their
doubts about the implementation of the new policy.
Land acquisition
for industrial development has become a critical issue of late due to
opposition from farmers and land owners over land compensation issues. A Land
Acquisition Bill in on the anvil now.
In 2005, the
government had brought in a policy for creating Special Economic Zone or SEZs
on the lines of Chinese SEZs. It may be mentioned that the SEZs have not
achieved their desired objectives. It was a big ‘land-grab’ opportunity for
private sector. Many fiscal incentives provided to SEZs initially were later
withdrawn. Only a fourth of the total SEZs formally approved are in working
condition at present.
Labour reforms
are a big policy area which has not been touched by the reform process in the
last two decades. The private sector is happy to manage the labour demand with
the help of temporary workers in the absence of any exit policy/labour reform
from the government.
Bibek Debroy, an
economist, had a few years back suggested that the entire nation should be
provided with fiscal and other incentives instead of just creating a few
islands of prosperity. Maybe, his suggestion deserves a serious consideration
from policymakers.
-
- -
Abbreviations:
GDP – Gross Domestic Product or national income
Note on author: Author is an
investment analyst and writer. The views are personal and this is written only
for information purpose. Readers are advised to consult their certified
financial adviser before taking any investment decisions.
Author’s articles on financial
articles can be accessed at:
No comments:
Post a Comment