PM headed committee to take a final call on the proposed draft of NMP

The new National Manufacturing Policy (NMP) is expected to get some headway on June 2, with the committee headed by the Prime Minister Manmohan Singh taking a final call on the proposed draft of NMP. The new policy is aimed to increase the share of manufacturing sector in India’s GDP from 16% to 25% by 2022, with the idea of shifting the large proposition of work force from agriculture to manufacturing. Manufacturing contributes over 80% in overall industrial production. Under the upcoming policy, the government has proposed to set up integrated greenfield mega-investment zones to attract global investment and latest technologies.
 
There have been many confrontations among the various ministries since a discussion paper on the NMP was floated by the department of industrial planning and promotion of the commerce ministry and major differences emerged among the ministries on the proposed draft. The Ministry of Labour and Environment had raised their concerns over the labour and environment issues, as the Ministry of Commerce and Industry had suggested an exemption from labour laws for easier hiring and firing of workers. In the proposal, the Contract Labour Abolition Act would also not be applicable and workers’ rights to join unions would also be curtailed. Instead, an alternative safety net would be provided to workers in these zones.

As per the discussion paper, which was issued by DIPP around last year, “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 DIPP suggests making National Manufacturing and Investment Zones (NMIZ). These NIMZ are expected to come up across the country and their sizes would be double that of Special Economic Zone (SEZs). The NMIZ are planned to be specifically drawn 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 including industrial parks, warehousing zones and export oriented units. The land would be acquired by the state governments. 

Anxiety has been raised by many ministries on NMIZ, and hence the industry minister Anand Sharma said in the Confederation of Indian Industry’s India-Africa Forum Summit “the PM had intervened in the matter; the meeting will take place on June 2. Once the PM gives his nod, the policy would then be formally approved by the Cabinet Committee on Economic Affairs”.

Sharma added, “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”.

To address differences over the proposed NMIZ policy, Prime Minister Manmohan Singh is scheduled to hold a meeting with at least six ministers, including commerce and industry minister Anand Sharma, finance minister Pranab Mukherjee, labour and employment minister Mallikarjuna Kharge, environment minister Jairam Ramesh, corporate affairs minister Murli Deora, HRD and telecom minister Kapil Sibal and planning commission deputy chairman Montek Singh Ahluwalia. The planned meeting is also expected to consider to formulae the National Manufacturing Competitiveness Council and Planning commission.