POLICY managers may be having a tough time countering the resistance to some of the norms they have formulated for special economic zones (SEZs) in the country. But they seem to have left those worries behind them and are now focussing on a policy for introducing manufacturing investment regions (MIRs) aimed at the development of the manufacturing industry in the hinterland. The good part about this initiative is that there may not be a cap on the number of MIRs in the country.
Apart from greenfield projects spread across 150-200 sq km, MIRs could also take the form of brownfield expansions of existing state manufacturing units. “While these units will have no fiscal sops, the central government will provide the entire rail, road connectivity and other infrastructure requirements,” said Ashwani Kumar, minister of state in the ministry of commerce and industry. The state government is also expected to chip in by providing land, sewage and other local facilities.
According to the minister, the state governments of Maharashtra, Punjab and Haryana have, already, shown interest in promoting such MIRs. He expects more states keen on developing far flung areas to show interest in the proposal.
The UPA government wants to make India’s manufacturing sector more competitive as it believes that the sector could be a prime driving force for the country’s economic growth. By encouraging SEZs, petrochemical regions and MIRs, the government wants to increase the share of manufacturing in gross domestic product (GDP) from the current level of about 17% to 25% by 2012 and further to 30% by 2020.
The manufacturing sector has been one of the main contributors to the recent stellar growth in industrial production. The latest data on industrial output shows that thanks to a strong performance by the manufacturing sector, industrial growth shot up to 11.8% in October from 4.5% a year ago.
“Liberalisation of foreign direct investment norms is also being considered, especially in the civil aviation — aircraft maintenance and mining sectors,” Mr Kumar told ET.
A high-powered committee headed by the central cabinet secretary is currently monitoring the implementation of the Petroleum, Chemical and Petrochemical Investment Regions (PCPIR) policy. “Bayer, Exon, Dow Chemicals and Shell are some of the companies that have shown interest in these projects,” the minister said.
The National Manufacturing Development Council has already identified certain labour-intensive manufacturing sectors such as textiles, food processing and leather for special government succour. Some of the National Manufacturing Development Council’s proposals had been taken on board in the last two Union budgets. Policy action is also being seen outside the budget. The integrated textile park scheme, for instance, is also expected to show some results after the initial hiccups.
The National Manufacturing Development Council , which is represented in the prime minister’s high-level committee on manufacturing, is now sharpening the focus on skill upgradation. Policy managers have acknowledged the fact that absence of skilled manpower is a major constraint in the efforts to give a fresh momentum to Indian’s manufacturing sector, which had plunged into a torpor, even as the services sector recorded phenomenal growth in recent years