The Planning Commission has recently released the draft of the countrys first ever National Manufacturing Policy. The objective of the National Manufacturing Policy is to boost the countrys share of industrial production, employment; development of world-class infrastructure and investments in Indias manufacturing space. Summary of the Policy: Manufacturings share in Indias has been stuck at 16% since 1980s. The policy aims to incre the share of manufacturing in countrys GDP from the current 1 to 25% by 2022. The National Manufacturing Po aims to create 100 million additio jobs in the next decade. The draft policy envisa establishment of Natio Investment and Manufactur Zones (NIMZ) equipped with world-cl infrastructure that would autonomous and self-regula developed in partnership with private sector. Each National Investment Manufacturing Zones to have 5, hectares. Land will be selected by St Governments. Preference would given to uncultivable land. Both state and central Governm would fund trunk infrastructure. The policy embodies an easy policy and single window cleara in zones The NIMZ would be managed special entity The policy has envisaged fiscal s to boost manufacturing. Small & medium enterprises to reimbursed for technology purcha Industrial training and sk development programmes Flexible labor laws and simplified expeditious exit mechanism for units Relaxation in environme regulations Financial and tax incentives to s and medium enterprises Incentives to states for infrastruct development Incentives for Green Manufacturin Rationalization of busin regulations to reduce burden procedural and regulat compliance on businesses Increased focus on employm intensive industries, capital go industry, industries with strate significance and those in wh India enjoys a competitive edge the SME sector. Make industrial land (l acquisition) available thro creation of land banks by states. How the Policy would achieve the above objectives? Foreign investments and technolog will be welcomed while leverag the countrys expanding market manufactured goods to induce building of more manufactur capabilities and technologies wit the country. Competitiveness of enterprises in country will be the guiding princi in the design and implementatio policies and programmes. Compliance burden on indu arising out of procedural regulatory formalities will reduced through rationalization business regulations. Innovation will be encouraged augmenting productivity, qual and growth of enterprises; Effective consultative mechan with all stake holders will instituted to ensure mid-cou corrections. Which Industry verticals will be give special attention? Employment intensive industr such as textiles and garme leather and footwear; gems jewellery; and food process industries Capital Goods such as machine to heavy electrical equipments; he transport, earth moving and min equipments. Industries with strategic significa such as aerospace; shipping; hardware and electron telecommunication equipm defence equipment; and s energy. Industries where India enjoys competitive advantage such automobiles; pharmaceuticals; medical equipment. Small and Medium Enterprises: Small and Medium Enterprises (S segment of manufacturing has particular attracted due attention the new policy as can be seen fr the various financial development incentives that h been envisaged therein. The n for special focus on the segm arises from the fact that curren 8% of overall GDP, 45% manufacturing output and 40% the countrys exports originate more than 26 million SME u across the country. These SME u are engaged in the production more than 6000 products, 22% which are food products, 12% chemicals and chemical produ 10% basic industry metals, 8% m products, 6% each of electrical machinery parts and rubber plastic products (36% miscellaneous products). Public Sector Enterprises specially defense and Energy sectors. How they want to rationalize the Business Regulations? The policy notes that on an aver a manufacturing unit needs comply with nearly 70 laws regulations. Apart from fac multiple inspections, these u have to file sometime as many 100 returns in a year. This kind of compliance burden p off young entrepreneurs and t are not willing to take up entrepreneurial role. As a result large number of people who co have been self employed and wo contribute to further employm and enhance economic activity, up accepting jobs much below t potential. The policy suggests that Cent State Governments may prov exemptions subject to fulfilment conditions as provided in statute. SPV may act as a facilit in this regard. Mechanisms may developed for cooperation of pu or private institutions government inspection servi under the overall control of statut authorities. In respect of laws and regulati pertaining to environment , Cent State Governments may delegate power as allowed by the relev statutes to an official of the St Pollution Control Board (SP posted in the zone. The Environmental Clearances NIMZ units under the Notification, 2006 shall considered on a high priority, the units thereon will be exemp from public hearing provided un the EIA Notification, 2006 in ca where such estates have underg public hearing as a whole. Furt facilitative instructions guidelines may be issued at Central and State level from time time aiming at promotion of NI investment while safeguard environmental integrity. Technology Acquisition and Development Fund The policy proposes establishment a Technology Acquisition Development Fund (TADF) acquisition of appropri technologies including environm friendly technologies; creation o patent pool; and development domestic manufacturing equipments used for controll pollution and reducing ene consumption. Operation, Monitoring and Review the Fund will be done by the Gr Manufacturing Committee. Gr Manufacturing Committee comprising representatives from concerned Ministries/Department the Central Government and relev sectoral experts from outs government. GMAC will incentives for Green Manufacturin Please note that Technol Acquisition and Development F will also function as an autonom patent pool and licensing agency will purchase Intellectual Prop (IP) rights to inventions from pat holders. Any company that wants use the IP to produce or deve products can seek a license from pool against the payment royalties. This company may t produce the product for use specified geographical areas subj to meeting agreed quality standar The TADF would reserve the right license more than one company fo particular patent. Skill Development: NIMZ, the SPV will undertake skill gradation in co-ordination with National Skill Developm Corporation (NSDC). Further, policy seeks to expand the netw of ITIs. There are currently 8306 it is / I (as on July 15, 2010) with a capa of training 1.16 million persons year. Though the 11th plan alre envisages setting up of 500 new I in industrial clusters/SEZs and 1 new ITIs in other areas based demand via the PPP route, overall availability of train infrastructure will remain gro inadequate. So, to encourage the private sector set up their own institutions, government will provide weigh standard deduction of 150% of expenditure (other than land building) incurred on Public Priv Partnership (PPP) project for s development in the ITIs manufacturing sector in separ facilities in coordination with NSD The policy also speaks establishment of institutes specialized learning such as specialized Polytechnic for automobile sector, or a Polytech focused on high-tech manufactur and semiconductors for electronics sector, or one that fost innovation and product developm in the IT/ITES sector National Investment and Manufacturing Zones National Investment Manufacturing Zones (NIMZs) will developed as integrated indust townships with state-of-the art infrastructure and land use on basis of zoning; clean and ene efficient technology; necessary so infrastructure; skill developm facilities, etc., to provide productive environment to pers transitioning from the primary se to the secondary and terti sectors. These NIMZs would be managed SPVs (Special Purpose Vehicl which would ensure master plann of the Zone; pre-clearances setting up the industrial units to located within the zone undertake such other functions specified in the various sections this policy. To enable the NIMZ to function a self governing and autonom body, it will be declared by State Government as an Indust Township under Article 243 Q(c) the Constitution. In sum, the NIMZs would be la areas of developed land, with requisite eco-system for promot world class manufacturing activity What is major difference from SEZ? NIMZ would be different from SEZs terms of size, level of infrastruct planning, and governance structu related to regulatory procedures exit policies. Size: An NIMZ would have an area of least 5000 hectares in size. Land Availability: The State Government will responsible for selection of l suitable for development of NIMZ including land acquisition necessary. Government owned land or Priv Lands falling within the propo NIMZ, to be acquired by the St Government or Land under exist industrial areas/estates/sick defunct units including PSUs. NIMZ would be preferably develo on waste lands; infertile and lands not suitable for cultivation. The use of the agricultural land be kept to minimum. There sho be reasonable access to b resources like water. It should not be within ecologically sensitive area or clo than the minimum dista specified for such an area. Who will own NIMZ? It is left to the State Government adopt a model that it considers m workable. The State Government keep the ownership of NIMZ itself transfer the ownership to a st government undertaking. The state Government may have jo ownership with a private part and aopt any other appropri model. How NIMZ will be administered? The administrative structure of NI will comprise of a Special Purp Vehicle, a developer, St Government and the Cen Government. A NIMZ will be notified by Central Government , by notificat in the Official Gazette. O notified, an SPV will be constitu to exercise the powers conferred and discharge the functi assigned to it under this Policy manage the affairs of the NIMZ. Every SPV shall be a legal entity the name of the NIMZ. This SPV be a company. The appropriate financial administrative structure of the will be agreed to among differ stakeholders giving representation to nominees different stakeholders on the Bo of SPV. The CEO of the SPV will be a se Central/State government offici This SPV will prepare a Master P for the Zone. It will prepare strategy for development of the Z and an action plan for regulation to serve the purpose the policy. These shall be submitted to Board of Approval. After approval, the Zone will be develo by the SPV. Please note that Cen Government will bear the cost master planning for the NIMZ. The SPV can take up the work development on its own thro various agencies/contractors or t up the development in partners with a developer who shall selected through a transpar process. the State Governm would help in Water Requirem Power connectivity, Infrastruct Linkages. Role of Central Government As mentioned above, a NIMZ will notified by the Central Governm by notification in the Offi Gazette. The Department Industrial Policy and Promotion act as the nodal agency for central government in matt pertaining to the NIMZs. The application for setting-up NIMZ will be forwarded by the st to the DIPP for approval. DIPP constitute a Board of Appro which will consider all applicati for establishment of NIMZs approve such proposals as are fo feasible. Each NIMZ will be notified separat by DIPP. In case an amendment required to the concept and des of the project, as encapsulated the preliminary project re submitted by the State Governm the same will be considered by Board of Approval. Central Government will improve/provide external physic infrastructure linkages to the NI including Rail, Road (Natio Highways), Ports, Airports, Telecom, in a time bound manner This infrastructure will be creat upgraded through Public Priv Partnerships to the extent possi Viability Gap Funding thro existing schemes will be provid Wherever necessary, requi budgetary provisions for creation these linkages will also be made. How many NIMZ will be established? It has been reported that at le seven National Investment Manufacturing Zones (NIMZ) proposed to be set up in the No and West. A survey has been commissioned set up similar zones in the South. mentioned above, these zones wo be greenfield integrated indust townships and the area would be least 5,000 hectares.The 7 towns as follows: 1. Ahmedabad- km 2. Shendra-Bid km 3. Manesar-Ba 4. Khushkhera- (Rajasthan) 5. Dighi Port sq km 6. Dadri-Noida- Pradesh) 250 7. Pithampur-D Pradesh)- 37 Conclusion: We come to the conclusion that the plan is both ambitious and impressive, intending to give mega industrial townships autonomy, incentivise public private infrastructure development and facilitate access to green technologies. Itll boost the Made- in-India labels global competitiveness. Itll also hasten factory expansion, a must for absorbing Indias young workforce growing by around 20 million annually. With manufacturing wages rising in China, we can leverage the advantage of cheaper, abundant labour to attract investors. The NIMZ are to be limited to government-acquired waste and infertile land, which seems to be logical and sensitive decision. The core idea of this seems to skirt land- related strife and conserve ecologically sensitive areas. But, we also note that the project viability rides on logistics, there would be a requirement of fast development of the integrated infrastructure. Further, these zones will not appear overnight. We have an experience of procedural over delays and missed timelines. There should be a rule based process for expeditious development of these mega Hubs. Viability Gap Funding for NIMZ To promote manufacturing in the country, the Government in March 2013 issued norms for setting up of National Investment and Manufacturing Zones (NIMZs) with a host of benefits, including exemption from capital gains tax. NIMZs will be eligible for viability gap funding, which cannot exceed 20 per cent of the project cost. As per the norms, the developers of NIMZs will be allowed to raise funds through external commercial borrowings (ECBs) for developing the internal infrastructure of NIMZs. A scheme for a job loss policy will be put in place to enable units to pay suitable worker compensation in the eventuality of closures, through insurance.
Posted on: Mon, 05 Jan 2015 01:00:44 +0000
Trending Topics
Recently Viewed Topics
© 2015