Industry seeks sops for helping weaker sections

The government plans to look into corporate India's prescription to introduce affirmative action through investments in districts where Scheduled Castes and Scheduled Tribes make up over 40 per cent of the population.

Industry has asked the government to provide fiscal sops to companies that undertake such affirmative action, said Finance Minister P Chidambaram, after a meeting with representatives of industry associations here today.

The aim of the meeting was to explore ways through which the manufacturing growth rate could be raised to 12 per cent from the current level, which is a little over 9 per cent.

Chidambaram took up a few other suggestions relating to infrastructure, creation of a corpus to fund acquisitions overseas and skills development by industry, as interesting ideas that would be studied by the government.

He emphasised that the government had neither accepted nor rejected any of the suggestions made today by industry.

Corporate India's suggestion on affirmative action envisaged the promotion of special manufacturing clusters in districts with high levels of SC/ST population.

The clusters would concentrate on industries such as leather and apparel, which have a high intensity of employment. Industry, on its part, has asked the government to cushion its exercise in affirmative action through fiscal concessions.

Among other suggestions from industry is one on flexible labour laws. Industry has asked the government if flexibility in labour laws would be enhanced if it guaranteed 100 days of employment in factories.

On the infrastructure front, industry picked the power sector for attention because it is a driver of manufacturing.

Despite amendments to the Electricity Act, industry representatives believed the ground-level situation relating to independent power producers and the payment security mechanism were unsatisfactory, Chidambaram said.

Access to coal mines "" a critical factor in industries such as power generation and cement "" needed to be simplified, industry told Chidambaram. It wanted single window clearances at both the central and state levels in order to simplify the process.

Representatives suggested that the government put together a national fund to help companies acquire high-technology manufacturing companies abroad. The aim of these acquisitions would be to help industry leap-frog to the front ranks of manufacturing technology.

Chidambaram said he found industry's suggestions on skills development interesting. Industry has promised to take over 100 industrial training institutes this year, but has simultaneously asked for fiscal concessions to carry out the task.

Suggestions were made to widen the market for financial instruments to provide manufacturing companies with adequate resources. The main complaint was inadequate availability of long-term debt, Chidambaram said.