Differences stall policy on manufacturing

Mired in inter-ministerial differences, the much-awaited National Manufacturing Policy was on Thursday deferred by the Cabinet, as some ministers wanted more information on the policy and ostensibly because Labour Minister Mallikarjun Kharge was away in Turkey.

“The proposed policy was deferred on Thursday as the labour minister was abroad. He has given some suggestions in writing,” Information and Broadcasting Minister Ambika Soni told reporters after the Cabinet meeting. She said some other ministers also wanted additional information on the policy.

“Therefore, it was decided by the Prime Minister to either incorporate answers to these questions in the policy or make the ministers understand why they cannot be incorporated and only then it be taken up by the Cabinet,” she said.

To a query, she said the policy was deferred to “a day which is as soon as possible”.

It is learnt that the ministries of labour and environment spoiled the party at the last moment. Officials said both the ministries raised their objections with Cabinet Secretary Ajit Kumar Seth last night.

The officials said it seemed the environment ministry changed its stance and objected to the proposal that environment clearance would be handled by a separate entity. It was decided earlier that a special purpose vehicle would be created which would be self-regulated as far as environmental clearances for certain projects were concerned.

The manufacturing policy aims at increasing the share of manufacturing to 25 per cent of the country’s gross domestic product over a decade from the current 16 per cent to boost employment generation. As manufacturing has been witnessing a deceleration in growth, industry has put pressure on the government to clear the policy to boost the sector.

During the initial stages of formulating the policy, there were several differences that arose on the draft recommendations of the commerce and industry ministry, especially with the ministries of labour and environment, over the issue of setting up National Investment and Manufacturing Zones that entails acquisition of vast areas of land for industrial purposes.

However, the draft policy was granted an in-principle approval on June 9 by a high-level committee headed by Prime Minister Manmohan Singh.

Earlier, Labour Secretary P C Chaturvedi had told Business Standard the proposed manufacturing policy of the government had crossed a major hurdle with the issues concerning the labour ministry getting sorted out. Under the agreed plan, existing labour laws would be applicable in the manufacturing zones and there would be administrative arrangements for quick relief to workers in case a unit is closed.

Meanwhile, the Cabinet also cleared another proposal of the commerce ministry on Delhi-Mumbai Industrial Corridor Development Corporation, a special purpose vehicle for industrial development along the Delhi-Mumbai rail corridor. The proposal related to fund infusion of Rs 18,500 crore as well as change in the equity structure of the company, officials said.