1.
NEW MANUFACTURING POLICY
The Government of India has announced
a national manufacturing policy with the objective of enhancing the share of
manufacturing in GDP to 25% within a decade and creating 100 million jobs. It also seeks to empower rural youth by
imparting necessary skill sets to make them employable. Sustainable development is integral to the
spirit of the policy and technological value addition in manufacturing has
received special focus.
The Policy is based on a principle of industrial growth in partnership
with the States. Central Government will create the enabling policy framework,
provide incentives for infrastructure development on a PPP basis through
appropriate financing instruments, while State Governments will identify the
suitable land and be equity holders in the NIMZs. The following are the key
policy instruments for achieving the objective:
a)
Establishment of
National Investment and Manufacturing Zones (NIMZs) – green
field integrated Industrial Townships with state –of-the-art infrastructure and
land use on the basis of zoning; clean and energy efficient technology and
requisite social infrastructure. NIMZ proposed with land area of at least 5000
hectares.
b) Industrial
Townships are proposed to be self governing and Autonomous Bodies under Article
243(Q-c) of the Constitution.
c) The trunk infrastructure will be financed appropriately by Central
Government including through viability gap funding while SPV will develop the
zone infrastructure in PPP mode.
d)
NIMZ will be managed by Special
Purpose Vehicle, headed by. Govt. officials and experts, including those of
environment.
The policy has also come up with proposals to
improve access to finance for SMEs in the manufacturing sector.
The
proposals in the policy are generally sector neutral, location neutral and
technology neutral except incentivization of green
technology. While the National
Investment & Manufacturing Zones (NIMZs) are an important instrumentality,
the proposals contained in the Policy apply to manufacturing industry
throughout the country including where ever industry is able to organize itself
into clusters and adopt a model of self-regulation.
2.
DELHI-MUMBAI INDUSTRIAL CORRIDOR
The first phase of
the NIMZ will be established along the DMIC which will see early results in the
next few years. The development of this corridor will be anchored in the
National Manufacturing Policy which will give its strength by providing an
overarching policy framework.
The Government of
India is developing the Delhi Mumbai Industrial Corridor (DMIC), as a global
manufacturing and investment destination utilizing the high capacity 1483 km
long western dedicated railway Freight Corridor (DFC), as the backbone. In
essence, the DMIC project is aimed at the development of futuristic industrial
cities. This would involve/attract an estimated investment of around US$ 90-100
billion over the next thirty years. The DMIC project covers 6 States i.e.
Haryana, UP, Rajasthan, Madhya Pradesh, Maharashtra and Gujarat, accounting for
43% of the national GDP, 50% of industrial production and exports and 40% of
total workforce. It is estimated that the developments under the project will
offer employment opportunities for over three million people.
DMIC has 24 nodes covering 11 Investment Regions (IR) of more than 200
sq. kms each and 13 Industrial Areas (IA) of about
100 sq. kms each. Initially, 7 (Seven) investment
nodes are being developed with assistance from Government of India.
e)
The 7
Investment Regions under DMIC will be NIMZs as under:
§
Ahmedabad-Dholera Investment Region,
Gujarat (900 sq km)
§
Shendra-Bidkin Industrial Park
city near Aurangabad, Maharashtra (84 sq km)
§
Manesar-Bawal Investment Region,
Haryana (380 sq km)
§
Khushkhera-Bhiwadi-Neemrana Investment Region,
Rajasthan (150 sq km)
§
Pithampur-Dhar-Mhow Investment Region,
Madhya Pradesh (370 sq km)
§
Dadri-Noida-Ghaziabad
Investment Region, Uttar Pradesh (250 sq km) and
§ Dighi Port Industrial
Area, Maharashtra (230 sq km).
The
present status of the Delhi Mumbai Industrial Corridor is as follows
§
Master
Plans of New Industrial Cities have been approved except the one for Uttar
Pradesh.
§
The
Cabinet in its meeting held on 15th September, 2011 has, inter alia, approved
financial assistance of Rs.17, 500/- crore over the
next five years for the development of industrial cities in the Delhi – Mumbai
Industrial Corridor. In addition, Rs.1000/- crore has
been approved for undertaking project development activities by the Delhi
Mumbai Industrial Corridor Development Corporation.
§
State
Governments have initiated the process of land acquisition except Uttar
Pradesh.
3.
INVESTOR-FRIENDLY FDI POLICIES
The policy on FDI is reviewed on an ongoing basis, through a consultative
process, so as to facilitate FDI inflows. Some of the significant measures
taken towards rationalization and simplification of the policy in recent years
include:
(i) Consolidation of FDI policy:
FDI Policy has been consolidated into a single document for ease of
reference, which is being updated every six months.
(ii) Review of policy on cases requiring prior Government approval for
foreign investment:
Only proposals involving total foreign equity inflows of more than
Rs.1200 crore (as against the earlier limit of the
total investment being more than Rs.600 crore), now
require to be placed for consideration of the Cabinet Committee on Economic
Affairs.
(iii) Introduction of a specific provision for ‘downstream investment
through internal accruals’:
This measure implies that Indian companies have full freedom in accessing
their internal resources for funding their downstream investments.
(iv) Flexibility in fixing the
pricing of convertible instruments through a formula, rather than upfront
fixation:
This change, which provides flexibility in price fixation of convertible
instruments, through a formula, rather than through upfront fixation, has been
made intended to assist recipient companies in obtaining a better valuation
based upon their performance.
(v) Inclusion of fresh items for issue of shares against non-cash
considerations, including import of capital goods/ machinery/ equipment and
pre-operative/ pre-incorporation expenses:
This measure, which liberalizes conditions for conversion of non-cash
items into equity, has been introduced to significantly ease the conduct of
business.
(vi) Removal of the condition of prior approval
in case of existing joint ventures/technical collaborations in the ‘same
field”:
The requirement of Government approval for establishment of new joint
ventures/technical collaborations in the ‘same field’ has been done away with.
(vii) Permitting of FDI in Limited Liability Partnerships (LLPs), subject
to specified conditions:
This change, which permits induction of FDI through the new modality of
LLPs, implies significant benefits to the Indian economy, by attraction of
greater FDI, creation of employment and bringing in international best
practices and latest technologies.
Cabinet cleared 100% FDI in Single Brand retail and 51% FDI in Multi
Brand Retail. The decision regarding Multi Brand Retail is suspended till the
consensus is developed through consultation among various stakeholders
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DS/GK