Mumbai: The National Manufacturing Policy’s targets to create 100 million jobs and increase the share of manufacturing in India’s gross domestic product (GDP) from the current 16% to 25% by 2022 may remain mere statements of intent, acknowledged participants at the two-day Confederation of Indian Industry’s (CII) Manufacturing Summit that began here on Wednesday.
“We have seen many policies come and go but it’s a challenge for us to see that some of this is implemented,” said Arindam Bhattacharya, managing director of the Boston Consulting Group’s Indian operations.
Key to the policy, which was cleared by the Cabinet this October, is establishing national investment and manufacturing zones (NIMZs), proposed to be developed as greenfield industrial townships and benchmarked against the best manufacturing hubs in the world. The top 10 manufacturing cities in the world, according to ‘Industry Week’ magazine, include Shanghai, Seoul, Osaka, Detroit and Rantstad.
The manufacturing zones will have at least 5,000 hectares each. Units in these zones will enjoy single-window clearance, a liberal exit policy, incentives including exemptions from capital gains tax, and incentives for green manufacturing and technology acquisitions.
Shailesh Sheth, director of Bharat Fritz Werner Ltd said while the policy was strong on intent, it was weak on a doable agenda. “It’s doable, provided we refine the document more to clearly specify a practical agenda. There are a lot of generalities which lend it to sound like a statement of intent as compared to some doable agenda,” Sheth said.
Ajay G. Piramal, chairman of the Piramal Healthcare Ltd., said that while an economic growth rate of 7-9% was assumed as a given earlier, the future didn’t seem as bright if the right policy framework and the necessary infrastructure wasn’t created.
“There has been more money flowing out of the country than FDI (foreign direct investment) in recent times in a country that is capital starved,” he said, referring to the recent exodus of investment by Indian corporates into overseas markets.
Ajay Shankar, former industrial secretary and current secretary of the National Manufacturing Competitiveness Council at CII, however, said he was encouraged by past instances. “If you look at the past, you see that we had touched 12-14% growth rates in a few short periods. The challenge is to make it steady and sustainable for 10 years. I think this is very much doable because some individual firms have demonstrated that it can be done,” he said.