New Manufacturing Policy a Great Beginning, Says CII.

Confederation of Indian Industries has termed the new National Manufacturing Policy (NMP) as a right step in the right direction, and downplayed the criticism that it has been watered down, or would be stifled by red-tape.

"I am extremely satisfied with the draft paper as it is in the right direction and is a great beginning. Of course, we can improve on it as we move forward. It is a great beginning as we have to begin somewhere," CII president B Muthuraman told PTI here today.

He said the NMP is well-intentioned and right in its objectives, and not a whittled down version of what was originally planned.

"Finally, we are dealing with the missing piece in our economic development -- manufacturing. CII believes this sends out a clear message to the industry about government's resolve to take the reform process forward.

"The government, especially the Commerce and Industry Ministry, is to be commended for converging such a diverse range of opinions and issues raised by various stakeholders and bringing out a policy that meets multidimensional objectives towards the overall goal of inclusive growth.

On Tuesday, after many delays and haggling between the ministries, Cabinet cleared the flagship policy to boost manufacturing by streamlining of labour and environmental rules in mega-industrial parks.

The policy seeks to up the share of manufacturing in GDP to 25 percent from the present 16 percent by the turn of 2022 and create 100 million jobs. The share of manufacturing to GDP has been stagnant at 16 percent for the last 30 years.

Stating that the new policy will "revolutionise" the manufacturing sector and will help India head off a global economic slowdown, Muthuraman said, "The policy will generate momentum, resulting in long-term positive impact on growth aspirations."

For management of National Investment and Manufacturing Zones (NIMZs), the policy says the governing body in the form of special purpose vehicle would be headed by a government official. Under the earlier proposal, the SPV was to be headed by a CEO.

On whether he is happy with this dispensation (government servant as the head of SPV) as it creates larger scope for red-tapism, Muthuraman said, "Red-tape is constant struggle for the domestic industry, but I am sure once we get started, we can improve things."

On the absence of clearly defined exit policy in the draft, he said, "It does in fact offer one, and the industry is happy to work within the system. It does offer flexibility to hire and fire workers and this is one of the major positive steps in the policy."

He also pointed out that land acquisition policy in the draft is welcome, as government will provide basic infrastructure and develop land in these mega zones, which takes away the burden of the industry.

"We, at CII, have been saying for years that industry thrives in clusters, and hence the NMP decision to buy land and develop is a big step. Later on we can make these land bags a land corporation and this conversion is very much provided for in the SPV."

On whether the government will be able to meet desired objective, he said he "is more than hopeful".

Source : news.outlookindia.com