DIPP wants written nod from labour, environment ministries

Having seen fresh differences always crop up in the Cabinet regarding the draft of the National Manufacturing Policy (NMP) and the resultant deferment, the Department of Industrial Policy and Promotion (DIPP) is in no mood to fully trust the agriculture ministry’s latest claim that all related issues have been ironed out.

For, even as agriculture minister Sharad Pawar has stated that the imbroglio surrounding the country’s first-ever NMP has been completely resolved, the pertinent draft panel he heads has yet to approve the final minutes of last week’s meeting by the Group of Ministers (GoM).

This, when there are more formalities left. “The minutes,” points out a DIPP official, “will have to be first approved by the panel — that is, to each of its members.” Then follows another round of deliberations. “After that only will the final Cabinet note be prepared,” he told Business Standard.

Officials in DIPP also say it needs to get in writing from the Labour and Environment ministries about having resolved the differences that had earlier stalled the Cabinet clearance of the NMP.

If the policy finally goes through, India will get an NMP, 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 the present 16 per cent.

The progress of the NMP has faced hurdles right from the start. Inter-ministerial differences persisted even after Prime Minister Manmohan Singh gave the draft his “in principle” approval. This necessitated the establishment of a GoM. The body was formed on September 20 and was mandated to take an impartial view on the matter and expedite the passage of the NMP. This was considering that the manufacturing sector contributes to over 80 per cent to India’s industrial production and is of vital importance for the entire Indian industry.

It was last week that Pawar said the issues raised by environment, labour and MSME ministries have been sorted out. What’s more, his panel decided to apprise West Bengal Chief Minister Mamata Banerjee over the proposed plan to create massive manufacturing conclaves that would entail acquisition of large tracts of land.

The first such zone, officials said, would be spread over three states along the western railway corridor — Haryana, Rajasthan and Gujarat.

Other members of the panel are ministers Pranab Mukherjee (finance), Anand Sharma (commerce, industry and textiles), Virbhadra Singh (micro small and medium enterprises), Mallikarjun Kharge (labour), Dinesh Trivedi (railway) and Salman Khurshid (law).

The environment ministry had raised serious concerns with the proposal of establishing a special purpose vehicle that is to be headed by the chief executive officer of a National Manufacturing Investment Zones (NMIZs).

That official would be empowered to give environmental clearance — except in the case of hazardous industry.

According to the 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. The ministry is also against the proposal of a third-party inspection of environment-related issues of units within the NMIZs.

On the other hand, the labour ministry is opposed to the proposal of creating a statutory service body for the small and medium enterprises 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. The ministry has also raised objections on the proposal to create an expeditious exit mechanism for the investments locked up in businesses.