14 December 2019

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MSME concerns discussed while drafting the new Manufacturing Policy

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The proposed manufacturing policy to give a big boost over the next decade is undergoing a rigorous process of policy making. The new policy will going to touch upon several ministries including the Ministry of Micro, Small and Medium Enterprises (MSME). Since, MSME segment is a major contributor of the Indian manufacturing industry, the new policy will touch upon important MSME concerns.

A key group of ministers was been set up to resolve the inter-ministerial differences over the proposed manufacturing policy. Few media reports came out as Agriculture Minister Sharad Pawar, who heads this GoM, saying “Certain issues raised by the ministries of environment, labour and MSME (micro, small and medium enterprises) in Friday’s meeting. We discussed them in depth and came to a solution, following which I will be able to submit a final draft this week. Only after this, it will be sent to the Cabinet for a final view.”

Pawar said the final draft of the National Manufacturing Policy will be prepared quickly, following which it will be sent to all the four ministers concerned — labour, environment, MSMEs and commerce — to ensure that the changes suggested by them had been incorporated in the draft. The policy aims at creating 100 million additional jobs and expands the share of this sector in the country’s gross domestic product (GDP) from 16 per cent to 25 per cent by 2025.

The GoM was constituted on September 20, following sharp differences between the ministries of commerce & industry, environment, labour and MSMEs over the content of the draft policy. The environment ministry was opposed to the idea of creating a separate special purpose vehicle (SPV) which would be self-regulated as far as environmental clearances for certain projects are concerned. The ministry wanted the powers to be vested in it for granting environmental clearances.

The labour ministry wanted existing labour laws and inspection procedures should also be applicable to the manufacturing zones proposed under the new policy, which the earlier draft did not contain. On whether environment ministries objection on a separate body for granting environment clearance has been resolved, Pawar said it had been accepted that a representative from the state pollution control board along with two or three more people will be part of the SPV.

Environment minister Jayanthi Natarajan is also understood to have agreed to the new proposal. On the West Bengal chief minister’s reported objections to certain provisions of the draft policy, the agriculture minister said the policy was discussed with all state industry ministers some six months back and there was an overall understanding on the contents, but during that time the regime in Bengal was different. After Mamata Banerjee took over, there was a request that this policy should be explained to her. This would be done soon, adds the Business Standard report.

The manufacturing sector, hit hard by rising interest rates, grew by just six per cent in the first five months of this financial year, against nine per cent in the corresponding period last year. The Cabinet had deferred the policy last month, despite cleared by a high-level committee headed by Prime Minister Manmohan Singh, as fresh differences occurred between the commerce and industry ministry, which is piloting the policy, on the one hand and Environment as well as labour ministry on the other. The GoM was constituted to sort those differences.



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