PM to convene manufacturing policy meet

The high-level Committee on Manufacturing led by Prime Minister Manmohan Singh is likely to take a final call on the new National Manufacturing Policy (NMP) on June 2, following differences among ministries over the proposed draft.

The policy aims to increase the contribution of manufacturing n total gross domestic product from the current 16 per cent to 25 per cent by 2022, with the idea of shifting a large proportion of the work force in agriculture to here.

There have been severe differences among the various ministries since a discussion paper on the NMP was floated by the department of industrial policy and promotion (DIPP) of the ministry of commerce and industry around a year before.

“The Prime Minister had intervened in the matter. The meeting will take place on June 2,” commerce and industry minister Anand Sharma told Business Standard on the sidelines of the India-Africa Forum Summit here, organised by the Confederation of Indian Industry.

Dipp suggests creating massive National Manufacturing and Investment Zones (NMIZ). These NMIZs are expected to come up across the country and their sizes would be double that of Special Economic Zones (SEZs).

The NMIZs are proposed to be specifically delineated for the establishment of manufacturing facilities for domestic and export-led production, along with the associated services and infrastructure. The processing area may include one or more SEZs, industrial parks, warehousing zones and export oriented units. The land would be acquired by the state governments.

Concerns have been raised by various ministries on this, especially those of labour and environment, over the proposed relaxations in labour and environment laws in the NMIZs.

Once the PM gives his nod, the policy would then be formally approved by the Cabinet Committee on Economic Affairs.

Sharma said it was imperative for India to have a new policy to make India a manufacturing hub. The new policy is also expected to attract huge foreign investments, besides encouraging large-scale industrial activity. Foreign investment inflows have seen a decline in 2010-2011, compared to 2009-10. Besides, this would result in job creation which remains a primary concern for the government.

The situation of the manufacturing sector in India is a cause of concern, especially when seen in the context of transformation registered in this sector by other Asian countries in similar stages of development.

While the dramatic shifts in global manufacturing bases over the past four decades have brought these economies in focus, India has not been able to fully leverage the opportunities provided by the dynamics of the world economy, the discussion paper said. India would need to change its growth strategy and increase manufacturing exports, Sharma had said earlier. The proposed meeting would also consider formulations of the National Manufacturing Competitiveness Council and the Planning Commission.