New Delhi: The department of industrial policy and promotion (DIPP) under the commerce and industry ministry will release a new industrial policy by October that will focus on encouraging Indian branded products with higher value addition and will review the existing foreign direct investment (FDI) policy regime to facilitate greater technology transfer.
The policy is expected to replace the United Progressive Alliance government’s National Manufacturing Policy (NMP) released in 2011, which sought to create 100 million jobs by 2022.
“It is time to shift from a policy of ‘continuity with change’ in 1991 to radical and accelerated reforms for greater strategic engagement with the world. A comprehensive, actionable, outcome-oriented industrial policy will enable industry to deliver a larger role in the economy; to fulfil its role as the engine of growth and to shoulder the responsibility of adding more value and jobs," a discussion paper released by DIPP said.
DIPP has adopted a consultative approach for formulating the industrial policy by setting up six thematic focus groups and an online survey on the department’s website to obtain inputs. The six thematic areas are “Manufacturing and MSME"; “Technology and Innovation"; “Ease of Doing Business"; “Infrastructure, Investment, Trade and Fiscal Policy"; and “Skills and Employability for the Future".
A task force on artificial intelligence has also been constituted under V. Kamakoti, a professor in the department of computer science and engineering at the Indian Institute of Technology Madras; the task force will also provide inputs for the policy.
The proposed policy will aim to set a clear vision for the role of industry and industrial growth in the growth and development of the economy.
The discussion paper said lack of competitiveness of Indian industry has been a concern that has been discussed for a long time now.
“Competitiveness can be improved by reducing the cost of infrastructure such as power, logistics, easing regulatory/compliance burden, reducing the cost of capital and improving labour productivity," it added.
The discussion paper said brand-building should gain importance alongside achieving quality and scale.
“The quantum of value addition has to be increased at all levels. Larger the value addition, greater the positive externalities from economic activity. Creating complete value chains domestically and globally or integrating into existing chains is vital to ensure that the world market is accessed at the right time," it said.
The report said while the policy will aim to attract $100 billion of FDI in a year, up from $60 billion in 2016-17, it will also aim at retaining investments and accessing technology.
“FDI policy requires a review to ensure that it facilitates greater technology transfer, leverages strategic linkages and innovation," it said.
The policy will aim to harness existing strengths in sectors like automobiles and auto-components, electronics, new and renewable energy, banking, software and tourism, and create globally scaled-up and commercially viable sectors such as waste management, medical devices, renewable energy, green technologies, financial services to achieve competitiveness.
The policy will also push for reforms to enhance labour market flexibility with an aim for higher job creation in the formal sector and performance linked tax incentives.
A time frame for implementation of the policy will be decided taking into consideration the changing economic and business cycles of the world and the Indian economy, geopolitical trends and broad policy directions in the country, the discussion paper said.
DIPP has invited comments from the public regarding the framing of the new policy by 25 September.