Cabinet note soon on new manufacturing policy: Sharma

After reviewing the causes of slowdown in industrial growth with the corporate leaders, Commerce and Industry Minister Anand Sharma today said a Cabinet note on the proposed policy to boost manufacturing will be circulated soon.

The National Manufacturing Policy which has been given an in-principle approval by a committee chaired by Prime Minister Manmohan Singh, was discussed at length at the meeting with senior members of industry chamber CII.

Sharma will hold similar consultations with the Ficci leadership tomorrow.

"Some fine-tuning was required with few ministries. A Committee of Secretaries led by the Principal Secretary to the Prime Minister is looking into it...

"Other meetings which will take place within the next 10 days will help us in bringing this to a successful conclusion. Soon we will be in a position to circulate Cabinet note on the Policy," Sharma said.

In the backdrop of long-pending decision on opening up the multi-brand retail to the foreign direct investment, the minister said there was a need for further liberalisation of the FDI regime.

Assuring the industry of speeding up reforms, Sharma said a task force will be set up jointly with the industry for reviving factory output and boosting the FDI inflows. The industrial growth slowed down to 5.6% in May from 8.5% a year ago.

"Several suggestions have been given to the government and the minister has promised to take action on many of them. Industry is confident that actions will be taken, reforms will be speeded up and I do see positive things," CII President and Tata Steel Vice Chairman B Muthuraman said.

The pending reforms agenda includes introduction of the Goods and Services Tax and increasing FDI in insurance sector from the existing 26%.

At the support level,the task force will be co-chaired by Secretary in the Department of Industrial Policy and Promotion (DIPP) and an industry leader. It will include economists and analysts.

The decision to engage with the industry comes a day after official data pointed to a dismal performance in the industrial production, propelled by a lower manufacturing sector expansion at 5.6% in May from 8.9% an year ago.

Industry raised the issues of slowdown in capital formation in mining and in manufacturing sector. There were concerns regarding credit flow, skill deficit and decline in manufacturing jobs. It expressed concern over hurdles like land acquisition in the way of big ticket investments.