Investment regions to push manufacturing

The government is formulating a comprehensive policy framework for manufacturing investment regions (MIR) and petroleum and petrochemicals investment regions (PCPIR) to help attain a target of increasing the share of manufacturing in the country's GDP from 17 per cent at present to 25 per cent by 2012 and 30 per cent by 2020.

"The government is examining if the policy for the two regions can be clubbed into one. As per the present outline, the PCPIR will be spread over 250 sq km while the MIR will be spread over 100 sq km," a senior industry ministry official said.

Officials said the finance ministry had approved the broad contours of the MIRs and PCPIRs according to which no separate fiscal sops would be given.

The part of the region which is set up as an SEZ with focus on exports will enjoy tax sops available for SEZs, while the part of the region which is set up as a industrial park will enjoy the sops under that scheme.

Similarly, the part of the region which is set up as a growth centre will attract the sops given by the state government concerned for such growth centres.

"A management board for the MIR or the PCPIR will be set up in the state concerned comprising representatives of the Centre, the state government and the developers of the region. The board will ensure that all clearances are obtained," the official said.

Briefing reporters on the performance of the manufacturing sector, Commerce and Industry Minister Kamal Nath said the government was also willing to further liberalise the foreign direct investment procedures in sectors like leather, engineering sector and pharmaceuticals to boost manufacturing.

"FDI equity inflows into the manufacturing sector have gone up from a meagre $671.47 million in 2003-04 to $2 billion in 2005-06," he said.

The manufacturing sector is expected to clock a 12 per cent growth this fiscal and was targeted to grow to 14 per cent next year.

"The growth in the manufacturing sector has already increased to 11 per cent in April and 12.2 per cent in May," he said.

Nath said Prime Minister Manmohan Singh had also convened a meeting of his trade and industry council on July 20 to consider the recommendations made by the Investment Commission.