PM sets timeline for leaps in manufacturing

Time-bound targets for steel, textiles, aircraft & public transport on alternative fuel

To boost economic growth and provide many more jobs through manufacturing, a Prime Minister-headed committee on Tuesday set a target of raising annual  steel production capacity to 300 million tonnes by 2025 and to increase textile exports by 30 per cent this year.

It also decided to work out a strategy to manufacture civilian aircraft in India and develop public transport systems on alternative fuels.

Amid deteriorating macro economy parameters, including a sharp depreciation of the rupee against the dollar, Prime Minister Singh chaired a meeting of the High Level Committee on Manufacturing.  He regretted the country hardly has any manufacturing capabilities in electronics and telecommunications.

“Often, our production is at the lower end of the value chain. Our exports consist of raw materials and primary goods, and our imports consist overwhelmingly of manufacturing,” he said, in the wake of a trade deficit of over $20 billion in May, adding: “If we have to grow at eight-nine per cent (yearly), this has to come through sustained growth in manufacturing, particularly labour-intensive manufacturing. Manufacturing and manufacturing alone can absorb all those who need better livelihood opportunities.”

Steel
The meeting targeted production of 300 mt of steel in another dozen years. “In the short run, pro-active facilitation of projects in the pipeline would be taken up on priority, jointly by the steel ministry and the new investment facilitation mechanism in the Cabinet Secretariat,” said the Prime Minister's Office (PMO).

Government-owned Steel Authority of India is to leverage existing infrastructure to substantially expand capacity. It would work out plans for capacity expansion and production of speciality steels by end-September. As for the sector as a whole, a ‘master plan’ for achieving 300 mt annual production is to be prepared. "As the private sector finds it difficult to assemble land and get clearances, the state would assume a pro-active role in partnership with state governments,” the PMO said.

The targeted capacity will be a little more than double of the expected steel production at 120 mt this year from 89 mt in 2011-12. The meeting decided that project-specific Special Purpose Vehicles (the term for a subsidiary company with an asset/liability structure and legal status that make its own obligations secure) would be floated for identified sites, which would assemble land, get necessary approvals and clearances and tie up water and raw materials. “The SPV would then be offered in a transparent manner for takeover by investors through a bidding process. The steel ministry would prepare a road map with time lines for the above in eight weeks,” the PMO said.

SETTING TARGETS
Timeline set by Prime Minister-chaired high-level committee on manufacturing:

• Steel ministry to prepare roadmap on hiking India’s steel production capacity to 300 million tonnes by 2025 against 120 mt at present
   
• An inter-ministerial meeting under Textiles Secretary to work out action plan in four weeks for raising textile exports by 30 per cent this year
   
• High-level steering group to work out modalities to manufacture civilian aircraft in India
   
• An inter-ministerial group to work out implementation modalities in four weeks for the first pilot project for alternative public transportation

Textiles
As new opportunity arises for India's textile sector to strengthen its base abroad after collapse of the Rana Plaza building in Dhaka, the meeting decided that quick decisions would be taken on raising textile exports by 30 per cent this year. In 2012-13, these were about $26 bn. A 30 per cent increase would mean taking exports to $34 bn.

“The goal would be to leverage the strengths we have in cotton and other fibres to enhance employment generation and achieve a greater share in global markets, especially in apparel,” the PMO said.

The core of the strategy is to facilitate the rapid scaling of competitiveness of the garment segment of the textile sector in the country through a comprehensive package of measures. Some of the elements of the strategy include having ready availability of work space, having adequate and comfortable housing for workers, having more flexible work timings, leveraging textile clusters and obtaining the best technologies.

Aircraft
The meeting also decided that a 70-100 seater range of civil aircraft be developed in India, to begin with. "The idea is to house the development and production in an SPV that would be created for this purpose. The design capabilities in NAL (National Aeronautics Ltd), HAL (Hindustan Aeronautics Ltd) and other institutions in the country would be utilised for this,” the PMO said.

A steering group under V Krishnamurthy, chairman, National Manufacturing Competitiveness Council, would work out how to go about this.

Non-petro public tpt
The meeting also decided that experimental projects for public transport based on alternative fuels be launched. These would include electric and hybrid vehicles — three wheelers, mini buses, buses — in Delhi to begin with, followed by other metro cities. The first pilot in Delhi is targeted to be launched in August. An Inter-Ministerial Group, including the chief secretary of Delhi, would work out implementation modalities in four weeks for the first project.