After Prime Minister Manmohan Singh intervened in June to salvage the National Manufacturing Policy (NMP) that got mired into stiff differences among ministries, it is now Agriculture Minister Sharad Pawar’s turn to iron out the imbroglio within the ministries of commerce and industry, environment and labour.
Pawar has been selected by the Prime Minister to head the group of ministers (GoM) on NMP, which is going to have its first meeting soon. The GoM has been mandated to sort out the issue “as soon as possible,” which will have the ministers of commerce and industry, labour, environment and law as its core members, officials in the Department of Industrial Policy and Promotion (DIPP) told Business Standard.
After it appeared NMP would see a smooth sail in the Cabinet last week, differences between the ministries at the last moment stalled the policy.
In the meantime, Commerce and Industry Minister Anand Sharma has also raised the issue with the environment ministry for a possible “track change” and “communication gap” on approving the policy.
It seems the issue has gone back to square one where both the ministries of environment as well as labour have raised the very same issues on which the entire controversy had started even as both had given their consent on the draft policy, after the prime minister intervened.
“We have implemented the changes in the draft policy that they wanted,” a senior DIPP official said, adding the GoM would look into those issues and try to bring out a solution.
The environment ministry is miffed with the proposal of establishing a special purpose vehicle (SPV) that is to be headed by a senior official, designated to be the chief executive officer of National Manufacturing Investment Zones (NMIZs), who would be empowered to give environmental clearance except in the case of hazardous industry. DIPP says this is not a violation of any law but in line with the provisions given in the Environment Protection Act, Air Act and Water Act.
But according to the environment ministry, such a provision would translate to delegating the roles and responsibilities of the minister to a senior government official, who would exercise those powers. Technically, this would entail amendment to Water and Air Acts, contrary to what DIPP is saying.
DIPP has also contested the environment ministry’s viewpoint that such a provision would also result in differences between the Centre and state governments as pollution control is a state subject. “This is out of question as we have been talking to states on this issue constantly. We are regularly sending letters to the chief ministers and chief secretaries. States are very eager to invite industry and wants the policy to come,” the official said.
Both the ministries are also having major difference over third-party inspection of environment-related issues of units within the NMIZs, something that was going on for a year and was understood to have been sorted out between Anand Sharma and minister of state for environment and forests Jayanthi Natarajan, when she took over in July.
On the other hand, the labour ministry is opposed to the proposal of creating a statutory service body for the small and medium enterprises (SMEs) that would take care of all the financial obligations of its employees. It was decided that the body would be a commercially viable entity. This was meant for only those SMEs that would be located inside the zones. Besides, it has also raised objections on the proposal to create an expeditious exit mechanism for the investments locked up in businesses.
If the policy finally goes through, India will gets it first ever National Manufacturing Policy which is designed to create 100 million jobs by 2025, thereby increasing the share of manufacturing to 25 per cent of the country’s gross domestic product from 16 per cent. The PM had granted an in-principle approval to the draft policy in June after which the committee of secretaries headed by Principal Secretary to the Prime Minister, T K A Nair, was believed to have ironed out the differences.