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Resource centre on India's rural distress
 
 

New manufacturing policy targets 100 mn jobs in 10 years

-ENS Economic Bureau
 
The government today approved a national policy for manufacturing that aims to increase the sector’s share in the economy to 22 per cent from 16 per cent and create 100 million jobs over 10 years. The policy will ensure this by facilitating national manufacturing investment zones, which will offer faster clearances.

“It hopes to... give comfort to investors through a single-window clearance mechanism,” Commerce and Industry Minister Anand Sharma told The Indian Express. The Delhi-Mumbai Industrial Corridor (DMIC) was anchored in the manufacturing policy framework, he added.

The Cabinet Committee on Economic Affairs has already cleared the DMIC project and sanctioned Rs 17,500 crore for development of seven industrial cities along this corridor.

Sharma said some states such as Gujarat, Maharashtra, Andhra Pradesh and Rajasthan have created large land banks for national manufacturing investment zones in anticipation of the policy rollout. “Many issues are state subjects. They will have to play a proactive role,” he said.

The cabinet also approved easier exit norms for units in the manufacturing investment zones, which give India Inc the required flexibility but also protect labour interests in the event a unit is shut down. The policy provides for compensation of 20 days for every year of service against the norm of 15 days. The compensation mechanism can be either a job loss insurance policy by companies or a common sinking fund set up by all units which can be dipped into in case a particular unit shuts shop.

The policy also allows small and medium enterprises exemption from long-term capital gains if the sale proceeds of a residential property are reinvested in the equity of a new start-up company.