The government is pushing for easier credit availability for units in the national investment and manufacturing zones (NIMZs) planned to come up across the country.
The government, which has given an in-principle approval to the draft national manufacturing policy that would pave the way for creating India’s own versions of China-style mega industrial cities, has asked banks to chalk out a lending strategy for easier and enhanced finances to units in these hubs.
All loans given to micro, medium and small enterprises operating in these manufacturing hubs could be accorded priority sector status.
This could imply mean that all state-owned banks would be mandated to set aside a specified proportion of their total lending to these units at moderate interest rates.
Each of these zones would be spread across 12,500 acres on an average. Some of these will subsume special economic zones (SEZs), the existing dedicated export oriented duty free enclaves.
The policy, which has been in the works for the last two years, is aimed at augmenting manufacturing’s share in India’s GDP from about 17% to 25% in the next 15 years.
The manufacturing policy, if approved, will allow for rationalisation and simplification of business regulations, simple and expeditious exit mechanism for closure of sick units, financial and institutional mechanisms for technology development, skill upgradation, incentives for small industries, government procurement including defence and trade policy
“We will have to see how to make affordable loans available to these units and this would be critical to maintain India’s growth story,” a senior official, who attended the inter-ministerial meeting recently to discuss policy, said.
Consultations are expected to be completed within the next one month, after which the policy will be formalised.