New Manufacturing policy to generate 100 million jobs by 2025

Government is set to approve the new manufacturing policy, which is expected to generate 100 million jobs by 2025. The high level committee chaired by Prime Minister Dr. Manmohan Singh is meeting today to discuss the new manufacturing policy.

With this new policy, Indian government is aiming to increase the share of manufacturing sector in GDP from 15% to 25% in the next 15 years. The new policy will allow for rationalization and simplification of business policy, easy and quick exit mechanism for closure of sick units, financial and institutional mechanisms for technology development, skill upgradation, incentives for small industries, government procurement including defense and trade policy. It also aims to create a friendly environment for superior growth of SME sector.

In order to increase the share of manufacturing sector, Indian government is planning to address all the crucial aspects related to the sector and special attention is given to Infrastructure development, changing land and labour policy and easing environment policy to boost growth of manufacturing sector.

Poor infrastructure is the biggest hurdle in the growth of manufacturing sector. Indian government is planning to invest around Rs 1 trillion in infrastructure development in next five year. The new policy also aims to address the issues related to land acquisition for industries. Land issues have been a major obstruction to National Investment and Manufacturing Zones (NIMZs) i.e., upcoming industrial projects. Policy aims to create a Land Bank by the state governments for industries, to digitize land and resource maps, outline the utilization of land locked into non-productive uses, including sick industries. Labour issues are also addressed by the policy. The policy will encourage better institutional arrangements and connections between labour unions and employers through dialogue and consultation. Government has made easier environmental norms for the clearance of the projects.

The policy also proposes to set up Manufacturing Industry Promotion Board (MIPB) headed by commerce and industry minister Anand Sharma, for better coordination between different government originations and ministries. Other objectives of the new policy are skill development among rural migrants and urban poor for improving labour productivity, increase domestic value addition and technological depth and enhancing global competitiveness of manufacturing through appropriate policy support. It will give special focus on labour intensive industries like textiles, leather, gems and jewellery and food along with the capital intensive industries.

However, the new policy is facing resistance from various ministries, mainly from labour and environment ministries. The environment ministry is not in favor of offering an easier set of norms to hasten the process of clearance of the projects. The labour ministry has opposed the outsourcing of inspection of the NIMZs to third parties and easier exit policies that may empower firms to execute a hire and fire policy. The NIMZs will be setup by the government under the policy.