The proposed manufacturing policy of the government has crossed a major hurdle with the issues concerning the labour ministry getting sorted out.
Labour and Employment Secretary P C Chaturvedi told Business Standard that the ministry had detailed discussions on the matter with the Department of Industrial Policy and Promotion (DIPP) and all the issues had been resolved.
Under the agreed plan, existing labour laws would be applicable in the manufacturing zones and there would be administrative arrangements for quick relief to workers in case a unit is closed.
“The issue was that they thought some amendments to the law were required for their proposal. We clarified that if somebody wants to do something more than what is required in the law, no amendments were required,” said Chaturvedi.
He added that DIPP was proposing more compensation and more retrenchment allowance and administrative arrangements in case the factory faces problem and workers needed to be redeployed.
“What we are saying is that if they want to have some administrative arrangements in the manufacturing zone which gives quicker relief to workers, the labour ministry has no objection. Why should we have any objection? Our concern is that whatever is available as benefit to the workers under labour laws should be available to them...that’s all,” said the labour secretary.
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He added that labour laws were in no way any problem. “They are already existing and there is no issue on that. Labour laws will be applicable,” he added.
Chaturvedi stressed that the manufacturing policy would enhance growth of the sector and would create large employment.
Issues raised by other ministries including labour and environment ministry were being seen as creating problems in finalising the policy.
To expedite the process, Commerce and Industry Minister Anand Sharma had met Environment and Forests Minister Jayanthi Natarajan. The two ministers reached an understanding to fast-track the resolution of the issues so that the proposed policy could be put up before the Union Cabinet quickly.
Apart from the other benefits, the government is likely to extend capital gains tax exemptions on equity investment in National Manufacturing Industrial Zones (NMIZs). DIPP is currently working out the norms for checking misuse of the benefits. According to the draft paper, NMIZs would enjoy all the tax benefits available to the special economic zones and export oriented units.