Top Banner

of 23

1010629vvhv

Apr 03, 2018

Download

Documents

Vaibhav Kumar
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript

  • 7/27/2019 1010629vvhv

    1/23

    Ministry of Commerce and IndustryDepartment of Industrial Policy and Promotion

    1

  • 7/27/2019 1010629vvhv

    2/23

    RATIONALE FOR NMP

    OBJECTIVES

    POLICY INSTRUMENTS

    NIMZs

    RATIONALISATION AND SIMPLIFICATION OF REGULATIONS

    SPV FOR NIMZ

    FISCAL INCENTIVES UNDER NMP

    POLICY WITH REGARD TO ENVIRONMENTAL CLEARANCES AND LABOURWELFARE - JOB LOSS POLICY AND SINKING FUND

    ROLE OF GOI

    ROLE OF STATE GOVERNMENTS

    2

  • 7/27/2019 1010629vvhv

    3/23

    SHARE OF MANUFACTURING IN GDP HAS STAGNATED AT15% 16% SINCE 1980 WHEREAS THE SHARE IN COMPARABLEECONOMIES IN ASIA IS MUCH HIGHER AT 25-34%

    CONSTRAINTS:

    INADEQUATE PHYSICAL INFRASTRUCTURE

    COMPLEX REGULATORY ENVIRONMENT

    INADEQUATE AVAILABILITY OF SKILLED MANPOWER

    NMP IS BASED ON THE PRINCIPLE OF INDUSTRIAL GROWTH INPARTNERSHIP WITH STATES

    PROPOSALS IN THE POLICY ARE SECTOR NEUTRAL, LOCATIONNEUTRAL AND TECHNOLOGY NEUTRAL EXCEPTINCENTIVISATION OF GREEN TECHNOLOGY

    3

  • 7/27/2019 1010629vvhv

    4/23

    The Policy aims to

    Increase the sectoral share of manufacturing in GDP to atleast 25% by 2022Contribute to the national objective of creating100 million

    additional jobs by 2022 Increase the level of domestic value addition and

    technological depth in manufacturing

    Enhance global competitiveness of manufacturing andmake the country an international manufacturing hub.

    Ensure skill development/ skill upgradation

    Ensure sustainable development

    4

  • 7/27/2019 1010629vvhv

    5/23

    A. National Investment and Manufacturing Zones (NIMZs)

    Conceptualized as integrated industrial townships withstate-of-the- art

    infrastructure and land use on the basis of zoning; cleanand energy efficient technology and requisite socialinfrastructure managed by an SPV.

    B. Policy instruments for manufacturing industry applicablegenerally including in NIMZs

    i. Rationalization/simplification of business regulations

    ii. Simple/expeditious exit mechanism for non viable units

    iii. Technology development, including green technologies

    iv. Industrial training and skill upgradation measures

    v. Incentives for MSMEs

    5

  • 7/27/2019 1010629vvhv

    6/23

    C. Special Focus Sectors:

    Employment intensive industries: Textiles & Garments, Leather & Footwear,Gems & Jewellery, and Food Processing industries;

    Capital goods: Machine Tools, Heavy Electrical Equipments, HeavyTransports, and Earth Moving & Mining Equipments;

    Industries with strategic significance: Aerospace, Shipping, IT Hardware &Electronics, Defence Equipments, and Solar Energy;

    Industries where India enjoys a competitive advantage: Automobiles,Pharmaceuticals, and Medical Equipments;

    Small and Medium Enterprises: The National ManufacturingCompetitiveness Programme will be strengthened and therecommendations of Task Force on MSME for creation of a separate fundwith SIDBI, strengthening of National Small Industries Corporation (NSIC),

    modification of lending norms and inclusion of lending to MSMEs underpriority sector lending will be given due regard in taking appropriatemeasures; and

    Public Sector Enterprises: A suitable policy framework will be formulated tomake them competitive while ensuring functional autonomy.

    6

  • 7/27/2019 1010629vvhv

    7/23

    D.Leveraging infrastructure deficit and Governmentprocurement

    E.Trade Policy

    7

  • 7/27/2019 1010629vvhv

    8/23

    NATIONAL INVESTMENT and MANUFACTURINGZONES (NIMZs) Integrated industrial townships at least 5000 hect.

    State-of-art infrastructure

    Land use based on zoning

    Clean, energy efficient technology

    Social infrastructure Skill development facilities

    Ownership: State Government to adopt a workablemodel

    At least 30% total land area manufacturing units Management by SPV

    Declaration as an industrial township under Article243Q (c) of the Constitution of India

    8

  • 7/27/2019 1010629vvhv

    9/23

    RATIONALIZATION AND SIMPLIFICATION OF REGULATIONS Proposals under this instrument applicable to manufacturing

    industry in the country as a whole including NIMZs.

    Basic philosophy: Industry to self regulate to the extent possible

    Central/State Governments to suspend operation of particularprovisions wherever such powers exist subject to an alternativemechanism/annual audits by concerned departments and third

    party certification.

    Delegation of powers to a single body in case of other provisions.

    Combined application forms and common registers as far aspossible.

    Deemed clearance on expiry of timelines.

    Systematization of inspections.

    9

  • 7/27/2019 1010629vvhv

    10/23

    Inception stage Government, public

    sector, private parties according tofinancial stake + at least one directorfrom Government of India

    CEO- to be a senior Central/State Govt.official

    Development stage representation ofallottees/ industrial units; developer

    10

  • 7/27/2019 1010629vvhv

    11/23

    Venture Capital Funds with a focus on SMEs in the manufacturing

    sector, will be granted tax pass-through status;

    A separate fund will be created with the Small IndustriesDevelopment Bank of India (SIDBI) using the shortfalls against MSE

    credit targets for commercial banks;

    Rollover relief from long term Capital Gains Tax will be provided toindividuals on sale of a residential property whenever such saleconsideration is invested in the equity of new start-up SME companyin the manufacturing sector for the purchase of new plant and

    machinery; Liberalisation of banking norms for banks investing in Venture

    Capital Funds with a focus on SMEs in the manufacturing sector willbe taken up in consultation with the RBI;

    11

  • 7/27/2019 1010629vvhv

    12/23

    Liberalisation of IRDA guidelines for insurance companies

    investing in Venture Capital Funds with a focus on SMEs inthe manufacturing sector will be taken up in consultationwith the IRDA;

    Cost of placement cells in an ITI set up in a NMIZ will be

    provided by the Central Government for the first five years; Polytechnics and SPV in NMIZ will be provided Viability Gap

    Funding by the Central Government for covering thecapital costs as per VGF guidelines of the Ministry ofFinance

    The Government will provide weighted standard deductionof 150% of the expenditure incurred on PPP projects forskill development (such as private institutions, ITIs) incoordination with the National Skill DevelopmentCorporation;

    12

  • 7/27/2019 1010629vvhv

    13/23

    All buildings with more than 2000 sq meter of built

    up area in a NMIZ which obtain green rating underthe Indian Green Building Council (IGBC)/ Leadershipin Energy and Environmental Design (LEEDS) or GreenRating for Integrated Habitat Assessment (GRIHA)

    systems will be eligible for an incentive of Rs 2 lakhs; Units practicing zero water discharge will be eligible

    for 10% one time capital subsidy on the relevantequipment/systems subject to actual usage for oneyear and third party certification;

    The SMEs will be provided 25% of expenditureincurred on water audit subject to a maximum of Rs1 lakh;

    13

  • 7/27/2019 1010629vvhv

    14/23

    The SMEs will be provided 25% of expenditure incurred on

    environmental audit subject to a maximum of Rs 1 lakh;

    SMEs will be able to access the patent pool and/or partreimbursement of the technology acquisition costs upto amaximum of Rs 20 lakhs for the purpose of acquiring

    patented technologies; and Incentives consisting of five percent interest

    reimbursement of the nominal interest charged by lendingagency and ten percent capital subsidy will be provided forproduction of equipment/ machines/ devices forcontrolling pollution, reducing energy consumption and

    for water conservation out of the Technology Acquisitionand Development Fund (TADF).

    14

  • 7/27/2019 1010629vvhv

    15/23

    Major environmental aspects will be taken care of in the NIMZin the beginning itself by having an impact study while doingselection of the site and subsequently by having properzoning during Master Planning. Continuation of non-viable businesses leads to locking of

    funds and capital assets, which can be more productivelydeployed for generation of higher output, incomes andemployment. An expeditious exit mechanism is thereforeessential for investments locked up in businesses. TheNational Manufacturing Policy seeks to introduce policymeasures to facilitate the expeditious redeployment of assetsbelonging to non viable units, while giving full protection tothe interests of the employees.

    15

  • 7/27/2019 1010629vvhv

    16/23

    The Exit Policy will be prepared keeping in view theprovisions for protection of workers rights within thestatutory framework. Mechanisms may be developed for cooperation of public orprivate institutions with government inspection services

    under the overall control of statutory authorities. Subject tosetting up a suitable mechanism in concurrence with theMinistry of Labour & Employment to enforce various labourlaws, the appropriate Government shall delegate the powersof inspection and enforcement to CEO of SPV who shall be asenior Government official. The Government will conductperiodic audit of the enforcement mechanism put in place toensure compliance of all labour welfare provisions.

    16

  • 7/27/2019 1010629vvhv

    17/23

    Under Section 25FFF of the Industrial Disputes Act there is amandatory requirement to pay compensation equivalent tofifteen days' average pay for every completed year ofcontinuous service, or any part thereof in excess of sixmonths. Under the Job Loss Policy, it is for firms operating in theNIMZs to insure workers against loss of employment in theevent of a unit requiring to close down, or to reduce theworkforce, due to financial constraints. This policy will beutilized for payment of compensation to workers at the time

    of closure or right sizing of the company if circumstancesrequire them to do so.

    17

  • 7/27/2019 1010629vvhv

    18/23

    The job loss policy will enable units to pay suitable workercompensation in the eventuality of business losses/closurethrough insurance and thereby eliminate the charge on theassets. This compensation may be equivalent to twentydays average pay for every completed year of continuousservice or any part thereof in excess of six months.

    SPV will facilitate companies to buy this insurance to meet thestatutory requirement of retrenchment compensation, at thestage of land allotment at a premium determined by the SPVon the basis of competitive bidding. The insurance policy willbe purchased before start of operations. The premium for theinsurance will be paid upfront to create a safety net for theworkers in the event of job loss. The SPV will be responsiblefor monitoring this.

    18

  • 7/27/2019 1010629vvhv

    19/23

    As an alternative to job loss policy, the SPV can opt for asinking fund mechanism to be funded by contributions asdecided by the SPV. The terms and conditions for the creation and operation ofthe fund will be notified by the Central Government /State

    Governments. A certain minimum level of moneycommensurate with the expected liabilities will at all times bemaintained in the sinking fund. The fund shall be continuously recouped in case money isdrawn from the same. In case of the sinking fund route also,the worker compensation may be equivalent to twentydays average pay for every completed year of continuousservice or any part thereof in excess of six months.

    19

  • 7/27/2019 1010629vvhv

    20/23

    The SPV may opt either for a job loss policy or asinking fund or a combination of the two forexample the SPV may buy a policy out of thesinking fund. The SPV can evolve any other suitableoption/arrangement also.

    The SPV will be responsible to ensure that otherstatutory payments like EPF contribution and ESIare kept upto date. Subject to such arrangementsbeing in place, to the satisfaction of Government,the assets of any sick unit could be allowed to beredeployed by freeing from the charge of thelabour dues.

    20

  • 7/27/2019 1010629vvhv

    21/23

    ROLE OF GOIGovernment of India to bear cost of: Master planning

    External link infrastructure Institutional infrastructure - vocational training; design; qualityFunding of internal infrastructure in NIMZ Viability gap funding existing scheme of the Ministry of Finance Long term non-sovereign soft loans from multilateral financialinstitutions assistance for negotiating with back-to-back

    support.

    External Commercial Borrowing developer to be allowed ECBsfor refinancing of rupee debts.Fiscal Incentive specific to NIMZ

    Relief from Capital Gains Tax on sale of plant and machinery of aunit located in a NIMZ will be granted in case of re-investment ofsale consideration within a period of three years for purchase of newplant & machinery in any other unit located in the same NIMZ oranother NIMZ.

    21

  • 7/27/2019 1010629vvhv

    22/23

    Awareness creation about the policy amonglocal industry through meetings/workshops

    Identification of land for NIMZs

    Assessment of availability & quality of existingindustrial infrastructure

    Extent to which State government can fundinfrastructure creation/upgradation

    Initiate action on rationalization/simplificationof State level regulations, particularly withregard to labour, environment etc.

    22

  • 7/27/2019 1010629vvhv

    23/23

    Thank You!

    23