National Manufacturing Policy (NMP)

[LETHALFORCE]

New manufacturing policy to create 100 mn jobs

New manufacturing policy to boost growth - The Economic Times


NEW DELHI: India will soon have a national policy on manufacturing that will help create 100 million additional jobs by 2025 and boost economic growth.

"For the first time we are going to have a policy dedicated to the manufacturing sector. Industry welcomes the in-principle nod given by the prime minister to the draft National Manufacturing Policy and hopes that a final policy will be announced within a month," Harsh Mariwala, president of Federation of Indian Chambers of Commerce and Industry (FICCI) said on Friday.

A high-level committee on manufacturing headed by Prime Minister Manmohan Singh on Thursday cleared the draft of the policy that aims to increase the share of manufacturing in the country's GDP to 25 percent by 2025 from the present 16 percent.

The new policy is expected to give a fillip to the growth of industrial and overall GDP, which have slowed lately.

GDP growth slowed to 7.8 percent in the January-March period, the slowest in five quarters.

The country's industrial output grew at a much slower 6.3 percent in April, according to official data released on Friday.

Analysts said the new policy, if implemented quickly, would provide a much-needed fillip to growth, especially the growth of industrial output.

"This will certainly give the much needed boost to the manufacturing sector whose contribution in the country's GDP has remained stagnant at 16 percent and needs to increase it to generate the much needed employment opportunities," FICCI's Mariwala said.

According to draft of the proposed manufacturing policy prepared by the Department of Industrial Policy and Promotion, in consultation with National Manufacturing Competitiveness Council and the Planning Commission, the new policy is estimated to create an additional 100 million jobs by 2025.

Sustaining growth and providing gainful employment to the rising workforce is among the biggest challenges facing the country's economic policy makers.

The draft policy, which was presented to the meeting presided over by the prime minister by Commerce and Industry Minister Anand Sharma, has been prepared after consultations with various stakeholders, including different ministries, state governments and industry associations.

 

[prototype]

An another reports state that the plan is based on Chinese strategy to create manufacturing hubs which is the next level of SEZ and can itself contain 100's of SEZ with its own independent facilities.

However 2025 seems to much optimistic.

 

[Energon]

This should have happened 3 decades ago, but I'm interested to see how/if this works out. And if it does, it'll be the single most decisive step to change India's fortunes.

 

[Oracle]

This should have happened 3 decades ago, but I'm interested to see how/if this works out. And if it does, it'll be the single most decisive step to change India's fortunes.

I agree with you. But poor leaders coupled with bureaucracy may hinder it.

Are the Chinese p!$$!ng in their pants?

 

[Phenom]

Well the govt needs to do something soon, the IIP numbers were pretty dismal. There seems to be no concrete measures towards economic reforms from this government. Considering the expectation people had when this govt was formed without communist support, they seem to be a big disappointment.

 

[thakur_ritesh]

Well the govt needs to do something soon, the IIP numbers were pretty dismal. There seems to be no concrete measures towards economic reforms from this government. Considering the expectation people had when this govt was formed without communist support, they seem to be a big disappointment.

exactly, and some how this has just slipped my mind and if we look at the UPA I/II rule, there have been no significant reforms what so ever. why is the government so scared and of what? the very basics like retail and insurance reforms which were expected at least in upa I post the exit of commies is yet to see light of the day, and its close to 3 years now ................ its a just a matter of lost opportunities, but then as is said, indian growth is besides the government, not because of it, but still its not the market which will make policies, thats the bare minimum our politicians can do ...............

 

[warriorextreme]

equaling china's success is distant dream..i think we wont be able to even come closer to it...building SEZs means acquiring land..that alone will take many years...

 

[anoop_mig25]

if above strategy is based on chinses models then would we able to create qualitative product(as we know about qualitative products of china). second i worry about land that would be acquired in name of development.as respective governement would be acquring usefull land and returns would minimal what about those who are owing this land, third this land would be probably leased at very economical rate to industralist who then can develope/sell this land and according (me) our industries have bad record in such case as land acquired for one purpose is used for other purpose.

even if NCA draft is made into bill then this would increase governemnt expenditure as government has to pay moer to lanowners as well as it would receive less form idustralist on whom behalf government is acquring land

 

[ejazr]

Top Priorities for a New Manufacturing Policy - India Real Time - WSJ

India Prime Minister Manmohan Singh has set the ambitious goal of boosting manufacturing as a percentage of India's gross domestic product to 25% from 16% today. The WSJ has been examining some of the issues he faces in getting there. And, in advance of Mr. Singh's discussion with his Cabinet Thursday that will pave the way for the implementation of the new manufacturing drive, India Real Time surveyed economists to see what they see as the biggest measures need to reach that goal.

India's economy grew at 8.5% in the year ended March 31 but has shown signs of slowing. Yet the government is aiming to reach a double-digit growth rate in the next few years and to outpace India's larger northern neighbor, China, which has sustained rapid growth as it successfully scaled up its manufacturing capabilities over the past years.

India hasn't shown a similar rise in manufacturing even as services have soared and agriculture has dropped, as a percentage of overall economic output. Some have argued that the rise of services – from outsourcing to finance – means that India won't need an industrial revolution to bolster its development. Others point to history, showing that China, Taiwan, Japan, South Korea and, much earlier, Europe and the U.S., could only dramatically advance their economies – and the livelihoods of the masses – with industry.

The keys, in India's case, to a successful revolution seem to coalesce around four main areas, according to the economists we spoke with.

Infrastructure: The manufacturing policy will have to chart out measures to support the government's massive push to improving India's shoddy infrastructure, to which it plans to dedicate $1 trillion in public and private spending between 2012-2017.

Sonal Varma, an economist with Nomura in Mumbai, said infrastructure constraints are the biggest concern that must be addressed in the new manufacturing policy. The policy should facilitate an improvement in manufacturing productivity through a multi-pronged thrust on lowering production costs, making finance more readily available, and improving logistics, she said.

D.K. Joshi, chief economist at Crisil ratings service in Mumbai, said India's physical infrastructure needs a major facelift and the new policy should aim at upgrading critical facilities like ports and boosting power generation capacity.

"A little bit of rebalancing is required from the services-driven economy towards manufacturing that will help boost employment," Joshi added.

Land acquisition: This has been a major impediment to new industrial projects. Rules varying from one state to another on how land is acquired, compensation paid to land sellers, and changing the use for which the land has been earmarked all have been bones of contention lately, leading to public protests and even violence in some instances.

Tata Motors, most famously, changed its plans to set up a manufacturing facility for its Nano car from West Bengal to Gujarat in 2008 amid political as well as farmer protests over the acquisition of farmland for industrial use for what critics called grossly inadequate compensation.

"There is no clarity on these issues right now," said N.R. Bhanumurthy, an economist with think-tank National Institute of Public Finance and Policy in New Delhi. "A single uniform policy is required to ensure balanced growth across regions in the country."

Currently, some states have formulated their own rules, leading to a multiplicity of land acquisition policies across states and complexity for investors.

Environment: Difficulties in getting the required environmental clearances for new projects has been a major roadblock in the growth of industries. Posco's project in Orissa is a case in point where a proposed $12 billion investment by the South Korean steel manufacturer was held up for years due to delays in getting environmental clearances. Those have now been granted but not before a major tussle with regulators and activists.

Economists say clear guidelines are essential to ensure the speedy review and regulatory nod for investment proposals that are crucial for creating jobs in the country.

Labor laws: Archaic labor laws that are heavily tilted towards protecting the interests of employees also have become an impediment for investments.

Economists say unreasonably strict labor rules that punish industries for firing employees has been a major stumbling block in attracting investment into the industrial sector. Indeed, some say that because the whole economic liberalization process begun in 1991 has failed to boost the share of manufacturing in the economy so far, it is time to revisit sensitive topics like labor laws that have been politically off-limits before now.

"The share of manufacturing hasn't risen to 25% (of gross domestic product) despite the reforms implemented by the government," said Crisil's Mr. Joshi. "That means there is more that must be done like improving the infrastructure supported by the simplification of labor laws."

Mr. Joshi said some businesses were sourcing manufacturing inputs from competitor economies like China to avoid the hassle of having to comply with complex and business-unfriendly local labor laws.

 

[Tianshan]

Are the Chinese p!$$!ng in their pants?

why this?

if you want to compete then you can do so, we can not stop you.

 

[Energon]

I agree with you. But poor leaders coupled with bureaucracy may hinder it.

Well the govt needs to do something soon, the IIP numbers were pretty dismal. There seems to be no concrete measures towards economic reforms from this government. Considering the expectation people had when this govt was formed without communist support, they seem to be a big disappointment.

exactly, and some how this has just slipped my mind and if we look at the UPA I/II rule, there have been no significant reforms what so ever. why is the government so scared and of what? the very basics like retail and insurance reforms which were expected at least in upa I post the exit of commies is yet to see light of the day, and its close to 3 years now ................ its a just a matter of lost opportunities, but then as is said, indian growth is besides the government, not because of it, but still its not the market which will make policies, thats the bare minimum our politicians can do ...............

Frankly, this isn't just a structural issue but also a cultural one. The vestige of the Indian culture promotes disdain for physical labor and relegates the members of the blue collar working class to a low status. There was a brief attempt to reverse this trend during the Nehruvian socialist era but this resulted in unsavory unions steeped in politics and criminal activities which basically negated any form of productivity. It also instilled a very poor work ethic among the working class.

Unless the upper class makes an effort to overcome these cultural barriers by changing their mindset and taking charge of their own domestic duties with the aid of technology leaving a dignified able bodied workforce to participate in the growth of the economy, there will be no change whatsoever.

 

[Shaitan]

Union Cabinet OKs National Manufacturing Policy (NMP)


The Cabinet approved the revised proposal of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry to put in place a National Manufacturing Policy.

The Cabinet in its meeting held on 15" September 2011 considered the National Manufacturing Policy and directed that the policy may be considered by a Group of Ministers (GOM) for further harmonizing the differences in some inter-ministerial positions notably relating to Ministry of Labour and Employment and the Ministry of Environment and Forests. The GOM in its meeting held on 14th October 2011 has resolved the relevant issues. A revised note incorporating the recommendations of the GOM has been approved by the Cabinet today.

The major objectives of the National Manufacturing Policy are to increase the sectoral share of manufacturing in GOP to at least 25% by 2022; to increase the rate of job creation so as to create 100 million additional jobs by 2022; and to enhance global competitiveness, domestic value addition, technological depth and environmental sustainability of growth.

The policy has been formulated after detailed consultations with the industry; subject matter experts; State Governments and the concerned Ministries/Departments of the Government of India. The policy envisages specific interventions broadly in the areas of industrial infrastructure development; improvement of the business environment through rationalization and simplification of business regulations; development of appropriate technologies especially green technologies for sustainable development and skill development of the younger population.

Industrial infrastructure development is envisaged not only generally but also through the creation of large integrated industrial townships called National Investment and Manufacturing Zones (NIMZs) with state-of-the-art infrastructure; land use on the basis of zoning; clean and energy efficient technologies; necessary social and institutional infrastructure in order to provide a productive environment to persons transitioning from the primary to the secondary and tertiary sectors. The land for these zones will preferably be waste infertile land not suitable for cultivation; not in the vicinity of any ecologically fragile area and with reasonable access to basic resources.

It is envisaged to ensure compliance of labour and environmental laws while introducing procedural simplifications and rationalization so that the regulatory burden on industry is reduced. The interventions proposed are generally sector neutral, location neutral and technology neutral except the attempt to incentivize green technology for sustainable development No subsidies are proposed for individual units or areas. The basic thrust is to provide an enabling environment for tapping the potential of the private sector and the entrepreneurial skills of the younger population.

The contribution of the manufacturing sector at just over 16% of India's GOP is much below its potential and a cause of concern especially in the context of other Asian countries in similar stages of development. This also has its socio-economic manifestations and prevents India from fully leveraging the opportunities of globalization.

India is a young country with over 60% of its population in the working age group. With over 220 million people estimated to join the work force in the next decade, the manufacturing sector will have to create gainful employment for at least half this number. With a view to accelerating the growth of the manufacturing sector, the manufacturing policy proposes to create an enabling environment suitable for the sector to flourish in India.

 

[Shaitan]

Maharashtra plans to set up three more mfg zones

MUMBAI, MARCH 4:
Maharashtra plans to set up three more manufacturing zones under the National Manufacturing Policy (NMP), apart from the two that are coming up in Raigad and Aurangabad districts, a senior official said.

"The Government has already notified two areas - Shendra in Aurangabad and Dighi in Raigad - for NIMZs (national manufacturing and investment zones). To further boost manufacturing industry in Maharashtra, we plan to set up three more NIMZs," Principal Secretary (Industry) and MIDC Chief Executive Mr K Shivaji told PTI here.

The NMP, which proposes creating NIMZs, aims at increasing the share of manufacturing sector in the GDP to 25 per cent from the present 16 per cent, and creating 100 million new jobs by 2022.

Under the policy, the Centre plans to set up large integrated area, called NIMZs, which will be the growth drivers for the sector.

The first phase of NIMZ will be established along the Delhi-Mumbai Industrial Corridor (DMIC), which covers Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, Maharashtra and Gujarat.

On completion, this corridor is expected to account for 43 per cent of GDP, 50 per cent of industrial production and exports and 40 per cent of total workforce.

Initially, the Centre has notified seven locations - the Dadri-Noida-Ghaziabad region in Uttar Pradesh; the Manesar-Bawal belt in Haryana, the Khushkhera-Bhiwadi-Neemrana belt in Rajasthan, Ahmedabad-Dholera in Gujarat; the Pithampur-Dhar-Mhow belt in Madhya Pradesh and the Shendra-Bidkin and Dighi Port industrial area in Maharashtra for NIMZs.

The new NIMZs in Maharashtra would come up in non-DMIC region where development has not reached, Mr Shivaji said.

"To give a boost to the manufacturing sector as well as to develop the backward regions of the state, we plan to set up NIMZs in non-DMIC region. We will play the role of a facilitator for companies to set up their projects here," he said.

He added the process for identifying the locations has commenced and feasibility study is being undertaken.

 

[Shaitan]

Work on manufacturing policy to start by August: Anand Sharma


NEW DELHI: The ground work on the ambitious National Manufacturing Policy (NMP) is likely to start as early as August this year, Anand Sharma, Union Minister of Commerce and Industry said at the first meeting of the revamped National Manufacturing Competitiveness Council.

The meeting was attended by several business leaders such as Ratan Tata, Chairman, Tata Group, Venu Srinivasan, Chairman and Managing Director(CMD), TVS Motor, Mukul Kasliwal, Chairman, S Kumars and various secretaries from the government of India such as the MSME secretary and the finance secretary, RS Gujral.

 

[nrj]

Good thread.

 

[nrj]

Three more manufacturing zones on cards

Maharashtra plans to set up three manufacturing zones under the National Manufacturing Policy (NMP), apart from the two that are coming up in Raigad and Aurangabad districts, a senior official said.

"The Government has already notified two areas — Shendra in Aurangabad and Dighi in Raigad — for NIMZs (national manufacturing and investment zones). To further boost manufacturing industry in Maharashtra, we plan to set up three more NIMZs," Principal Secretary (Industry) and MIDC Chief Executive K Shivaji told PTI here.

Three more manufacturing zones on cards

 

[nrj]

Govt's move will boost manufacturing sector: Ratan Tata

Tata group chairman Ratan Tata along with other industry leaders, including ITC Chairman and managing director Y C Deveshwar and TVS Motor company CMD Venu Srinivasan, attended the first meeting of the reconstituted national manufacturing competitiveness council (NMCC).

Stating that there are many road blocks on the way to implement the national manufacturing policy (NMP), Tata said the government has at least made a good beginning that will help in boosting the sector's growth.

"There was a very frank exchange of views by the people press as to what they felt the hindrances were and where the positive motions could accelerate the manufacturing task. Most of us very much appreciated the fact that there is manufacturing policy that will be a guideline. There may be many roadblock on the way to make it implementable. But we are on that path. I think it is a tribute to that policy has been established and government intends to stand by," Tata elaborated.

Govt's move will boost manufacturing sector: Ratan Tata - CNBC-TV18 -

 

[nrj]

NATIONAL MANUFACTURING POLICY

The actual draft - http://india.gov.in/allimpfrms/alldocs/16395.pdf