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Hurdles may delay manufacturing policy

business Updated: Jun 06, 2011 01:00 IST
HT Correspondent

Thorny environmental, land acquisition and labour issues, which remain to be ironed out, may delay the implementation of the national manufacturing policy.

Prime Minister Manmohan Singh is set to chair an inter-ministerial meeting on Thursday to discuss the policy, which would enable the creation of mega industrial zones across the country.

The policy is aimed augmenting manufacturing's share in India's GDP from about 17% to 25% in the next 15 years. However, issues on labour and environment may well delay the policy.

An official, who did not wish to be identified, said the labour ministry has opposed the outsourcing of inspection of the national manufacturing industrial zones (NMIZs) to third parties and easier exit policies that could empower companies to execute a "hire and fire policy".

The environment ministry is not in favour of offering an easier set of norms to hasten the process of clearance as relevant laws will have to be modified appropriately, the official said.

The draft policy released by the department of industrial policy and promotion (DIPP) had suggested that clearances should not take longer than a year. "In case the process is not completed in time, it should be treated as deemed granted," it said.

The government plans to earmark Rs 3,500 crore every year for the next five years to set up the first of the seven industrial cities or NMIZs that will come up on the proposed Delhi- Mumbai industrial corridor.

The 1483-km project running through seven states — Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra — will come up along the proposed Delhi-Mumbai dedicated rail freight corridor.

They would subsume special economic zones and industrial parks within their fold.

“The government will provide Rs 500 crore per year per industrial city to the fund for the next five years beginning 2011-12, as grant for the creation of capital assets for catalysing the development of these cities,” a source, who did not wish to be identified, said.