Minister of Commerce and Industry and Textile Anand Sharma says the National Manufacturing Policy would be progressive. In an interview with Indivjal Dhasmana and Nayanima Basu, he says the policy would seek to create jobs, besides being a friendly one for the investors. Edited excerpts:
The policy was deferred in the last Cabinet due to differences between your ministry and the labour and environment ministries. What was the compromise formula?
Policy formulation is a consultative, transparent and democratic process. Positions have to be harmonised because it is a national policy. There were some issues, which were addressed by the group of ministers on environment and labour. The policy is not in conflict either with the environment acts or labour laws. Rather, it is progressive and will create jobs.
How did you resolve those differences?
The policy is a reality today. All of us understand that this was needed. I would rather not look into the past and would look forward. It is a major leap to create self-regulation and single window clearance.
How was the issue of creating an over-arching special purpose vehicle (SPV) resolved?
The challenges that face investors today are delays, red tapes, multiple applications etc. Through the SPV, there will be a single window clearance. It will be headed by a CEO, who will be a senior government official.
What about the issue of delegation of powers concerning the environment ministry?
There will be a State Pollution Control Board official, since we are a federal country and these are subjects pertaining to states concurrence. The official would be on deputation to the SPV. So, everything is very clear that it will be a single window.
What about the concerns of the labour ministry?
The issues stand delegated with the consent of the states. In the eventuality of a closure of a unit, a suitable mechanism has been devised using innovative job loss policy or sinking fund to insure workers against such loss. Third party inspections would also be there to supplement inspections by government agencies for compliance monitoring for both labour and environment.
The 12th plan approach paper targets the gross domestic product (GDP) to grow by nine per cent in the next five years. Assuming the same growth rate will be targeted till 2022, do you think it is feasible for manufacturing to grow by 12-14 per cent to reach 25 per cent of the GDP by 2022?
Manufacturing would have to grow between 12 and 14 per cent. This will definitely be feasible. We must have a long-term vision.
What about the rate rise by the Reserve Bank? Do you think this will impact manufacturing?
The cost of credit would have to be within the endurance limits for the investors and the industry.
The policy has a plethora of fiscal incentives for investors, particularly the tax sops. Do they have a sunset clause and have you got full support on this from the finance ministry?
There is no sunset clause here. The direct tax code is pending with the standing committee. So, when it is passed, the minute details would be worked out then. But we do have in-principle approval of the Department of Revenue.
What about acquisition of land for the national investment and manufacturing zones?
The land would have to be identified by the states for the zones. The state governments would have to identify non-agricultural land for this.
