Manufacturing policy of India

The Government of India has announced a National Manufacturing Policy with the objective of enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs. The Investment/”>National Investment & Manufacturing Zones (NIMZs) are an important instrumentality of the manufacturing policy.

The NIMZs are envisaged as integrated industrial townships with state of the art Infrastructure-2/”>INFRASTRUCTURE; land use on the basis of zoning; clean and energy efficient technology; necessary social infrastructure; Skill development facilities etc. to provide a productive Environment for persons transitioning from the primary to the secondary and tertiary sectors.

The policy is based on the principle of industrial Growth in PARTNERSHIP with the States. The Central Government will create the enabling policy frame work, provide incentives for Infrastructure Development on a Public Private Partnership (PPP) basis through appropriate financing instruments, and State Governments will be encouraged to adopt the instrumentalities provided in the policy.

Application & Approval

A two-stage application procedure has been put in place. In the first stage, the State will make an application for in-principle approval to the Department of Industrial Policy and Promotion (DIPP), the nodal department. The application will be examined on the basis of the format and submitted for in-principle approval to the Commerce & Industry Minister. The said in-principle approval will be communicated to the State Government.

Techno-economic Feasibility Report cum Development Plan

A techno-economic assessment will be carried out by the State Government to assess the economic and technical viability of the identified land area for a NIMZ. Such an assessment will be presented by the State Government along with the application for final approval.

Agreement of Implementation

The State Government concerned will enter into an Agreement of Implementation (AOI) with the DIPP indicating the specific commitments of each implementing agency along with timelines. A draft AOI will be presented by the State along with the application for final approval. On receipt of final approval, the NIMZ will be declared by the State Government as an industrial Township under ARTICLE 243Q(1)(c) of the Constitution.

Simultaneously, the State Government will constitute a Special Purpose Vehicle (SPV) to discharge the functions specified in the policy. The CEO of the SPV shall be a senior government official appointed on a full-time basis. The SPV will include an official conversant with the work relating to pollution control/ environmental protection. There shall be a provision for suitable representation of a nominee of the Government of India (DIPP), and of the allottees and subsequently of the industrial units on the Board of the SPV.

Land allotment

Proposals for establishment of individual units / other entities in the NIMZ will be considered for land allotment and other clearances by the SPV and/or such authority to which the relevant powers are delegated. Such allotment shall be on leasehold basis.

The SPV will ensure that land in the NIMZ allotted for the permissible purpose as per the master plan will be used within the specified period of time for the specified purpose which would be indicated in the land allotment letter itself. In case the said land is not used within the specified period for the specified purpose, it shall revert back to the SPV.

Role of Central Government

The Central Government will improve/provide external physical infrastructure linkages to the NIMZs including Rail, Road (National Highways), Ports, Airports, and Telecom, in a time bound manner. This infrastructure will be created/upgraded through Public Private Partnerships to the extent possible. Viability Gap Funding through existing schemes will be provided. Wherever necessary, requisite budgetary provisions for creation of these linkages will also be made.

For the internal infrastructure in a NIMZ, the government will provide:

Viability Gap Funding (VGF): Under the Ministry of Finance ‘Scheme for Support to Public Private Partnerships in Infrastructure’ in the form of capital grant at the stage of project construction will be given as per the VGF guidelines. The total Viability Gap Funding under this scheme shall not exceed twenty percent of the total project cost. Additionally, the State Government or its agencies may also provide funding out of their budget as may be feasible.

Long term soft loans from multilateral financial institutions: Soft loans from multilateral institutions will be explored for funding infrastructure development in NIMZ. Assistance would be provided for negotiating non-sovereign multilateral loans by providing back-toback support, if necessary.

Rationalization and SIMPLIFICATION of central level business regulations

The advisory pertaining to central level environmental regulations issued by the Ministry of Environment & Forests is at Annexure–III. In respect of labour regulations, subject to the setting up of a suitable mechanism in concurrence with the Ministry of Labour & EMPLOYMENT for central level labour laws, the Central Government shall delegate the powers of inspection and enforcement to the CEO of the SPV. The Central Government will conduct periodic audit of the enforcement mechanism put in place to ensure compliance of all Labour Welfare provisions.

Job Loss Policy

The Central Government will put in place a scheme for a job loss policy to enable units to pay suitable worker compensation in the eventuality of business losses / closures, through insurance. The compensation under this instrument would be equivalent to 20 days’ Average pay for every completed year of continuous service or any part thereof in excess of six months. The SPV will facilitate, the companies that opt for it, to buy the policy at the stage of land allotment, at a premium, determined by the SPV on the basis of competitive bidding.

The Manufacturing Policy of India is a comprehensive policy document that outlines the government’s vision for the Manufacturing Sector in India. The policy aims to make India a global manufacturing hub by 2025.

The policy has seven key objectives:

To increase the share of manufacturing in GDP to 25% by 2025.
To create 100 million new jobs in manufacturing by 2025.
To make India a global leader in manufacturing innovation and technology.
To promote the development of a strong manufacturing ecosystem in India.
To improve the competitiveness of the Indian manufacturing sector.
To ensure that the benefits of manufacturing growth are shared equitably across all sections of Society.
To make India a sustainable manufacturing hub.

The policy outlines a number of strategies to achieve these objectives, including:

Sectoral policies: The policy identifies 12 key sectors for focus, including automotive, electronics, pharmaceuticals, and textiles. For each sector, the policy outlines specific measures to promote growth and investment.
Investment promotion: The policy aims to attract both domestic and foreign investment into the manufacturing sector. To this end, the policy proposes a number of measures, including tax incentives, Land reforms, and improved infrastructure.
Skill development: The policy recognizes that a skilled workforce is essential for the growth of the manufacturing sector. To this end, the policy proposes a number of measures to improve the skills of the Indian workforce, including vocational training, apprenticeships, and university Education.
Research and development: The policy recognizes that innovation is essential for the growth of the manufacturing sector. To this end, the policy proposes a number of measures to promote R&D in India, including tax incentives, funding for R&D institutions, and collaboration between industry and academia.
Infrastructure: The policy recognizes that adequate infrastructure is essential for the growth of the manufacturing sector. To this end, the policy proposes a number of measures to improve infrastructure in India, including investment in roads, railways, ports, and airports.
Exports and market access: The policy recognizes that exports are essential for the growth of the manufacturing sector. To this end, the policy proposes a number of measures to promote exports, including tax incentives, market research, and trade facilitation.
Competitiveness: The policy recognizes that the Indian manufacturing sector needs to be competitive in order to succeed in the global marketplace. To this end, the policy proposes a number of measures to improve the competitiveness of the Indian manufacturing sector, including reducing costs, improving quality, and increasing productivity.
Governance: The policy recognizes that Good Governance is essential for the success of the manufacturing sector. To this end, the policy proposes a number of measures to improve governance in India, including reducing Corruption, improving transparency, and strengthening the Rule of Law.
Implementation and monitoring: The policy recognizes that the success of the manufacturing policy will depend on its effective implementation and monitoring. To this end, the policy proposes a number of measures to ensure implementation and monitoring, including setting up a dedicated implementation body, establishing performance indicators, and conducting regular reviews.

The Manufacturing Policy of India is a comprehensive and ambitious policy document. If implemented effectively, it has the potential to transform the Indian manufacturing sector and make India a global manufacturing hub.

However, there are a number of challenges that need to be addressed in order to achieve the objectives of the policy. These challenges include:

The need to improve infrastructure: India’s infrastructure is inadequate to support the growth of the manufacturing sector. There is a need to invest in roads, railways, ports, and airports.
The need to improve skills: The Indian workforce is not adequately skilled to meet the needs of the manufacturing sector. There is a need to improve vocational training, apprenticeships, and university education.
The need to improve innovation: The Indian manufacturing sector is not innovative enough. There is a need to promote R&D in India, including tax incentives, funding for R&D institutions, and collaboration between industry and academia.
The need to improve competitiveness: The Indian manufacturing sector is not competitive enough in the global marketplace. There is a need to reduce costs, improve quality, and increase productivity.
The need to improve governance: Governance in India is not good enough. There is a need to reduce corruption, improve transparency, and strengthen the rule of law.
The need to improve implementation and monitoring: The success of the manufacturing policy will depend on its effective implementation and monitoring. There is a need to set up a dedicated implementation body, establish performance indicators, and conduct regular reviews.

Despite these challenges, the Manufacturing Policy of India is a positive step towards making India a global manufacturing hub. If implemented effectively, it has the potential to transform the Indian manufacturing sector and create millions of new jobs.

What is the difference between a manufacturing policy and a manufacturing strategy?

A manufacturing policy is a high-level document that outlines the overall goals and objectives of a manufacturing organization. It typically includes information on the organization’s target markets, product mix, production capacity, and quality standards. A manufacturing strategy, on the other hand, is a more detailed plan that outlines how the organization will achieve its manufacturing policy goals. It typically includes information on the organization’s production processes, Supply Chain Management, and human Resources.

What are the benefits of having a manufacturing policy?

A manufacturing policy can provide a number of benefits for an organization, including:

Increased focus and clarity: A manufacturing policy can help to ensure that all employees are aligned with the organization’s goals and objectives. This can lead to increased focus and clarity, which can improve efficiency and productivity.
Improved decision-making: A manufacturing policy can provide a framework for making decisions about manufacturing operations. This can help to ensure that decisions are made in a consistent and rational manner.
Reduced risk: A manufacturing policy can help to reduce risk by providing a clear roadmap for the future. This can help to avoid costly mistakes and ensure that the organization is prepared for changes in the market.
Improved Communication: A manufacturing policy can help to improve communication between different departments within the organization. This can lead to better coordination and collaboration, which can improve efficiency and productivity.

What are the challenges of implementing a manufacturing policy?

There are a number of challenges that can be associated with implementing a manufacturing policy, including:

Resistance to change: Employees may be resistant to change, especially if they are not involved in the development of the manufacturing policy. This can lead to challenges in implementation and execution.
Lack of resources: Implementing a manufacturing policy can require significant resources, both financial and human. This can be a challenge for organizations that are already operating under tight constraints.
Complexity: Manufacturing policies can be complex documents that are difficult to understand and implement. This can lead to challenges in ensuring that the policy is actually implemented in the way that it was intended.

What are some examples of successful manufacturing policies?

Some examples of successful manufacturing policies include:

The Toyota Production System: The Toyota Production System is a manufacturing philosophy that focuses on continuous improvement and waste reduction. It has been credited with helping Toyota to become one of the most successful car manufacturers in the world.
The Six Sigma approach: Six Sigma is a quality management approach that focuses on reducing defects and improving efficiency. It has been adopted by a wide range of organizations, including manufacturing companies.
The Lean Manufacturing approach: Lean Manufacturing is a manufacturing philosophy that focuses on eliminating waste and improving efficiency. It has been adopted by a wide range of organizations, including manufacturing companies.

What are some common mistakes made when implementing a manufacturing policy?

Some common mistakes made when implementing a manufacturing policy include:

Not involving employees in the development of the policy: Employees are more likely to support a manufacturing policy if they are involved in its development. This can help to ensure that the policy is actually implemented in the way that it was intended.
Not providing adequate training: Employees need to be trained on the new manufacturing policy in order to be able to implement it effectively. This training should include both theoretical and practical components.
Not providing adequate resources: Implementing a manufacturing policy can require significant resources, both financial and human. Organizations need to make sure that they have the resources in place to implement the policy effectively.
Not monitoring and evaluating the policy: It is important to monitor and evaluate the manufacturing policy on a regular basis to ensure that it is still meeting the needs of the organization. This can help to identify any areas that need to be improved.

Sure. Here are some MCQs on the topics of manufacturing, economics, and business:

Which of the following is not a factor of production?
(A) Land
(B) Labor
(C) Capital
(D) Entrepreneurship
Which of the following is not a type of business organization?
(A) Sole proprietorship
(B) Partnership
(C) Corporation
(D) Government-owned enterprise
Which of the following is not a characteristic of a market economy?
(A) Private ownership of property
(B) Freedom of choice
(C) Economic planning
(D) Competition
Which of the following is not a characteristic of a command economy?
(A) Centralized planning
(B) Public ownership of property
(C) Economic planning
(D) Competition
Which of the following is not a characteristic of a Mixed Economy?
(A) Private ownership of property
(B) Freedom of choice
(C) Economic planning
(D) Competition
Which of the following is not a type of economic system?
(A) Market economy
(B) Command economy
(C) Mixed economy
(D) Traditional economy
Which of the following is not a goal of economic growth?
(A) Increased production
(B) Increased employment
(C) Increased Inflation
(D) Increased standard of living
Which of the following is not a factor that contributes to economic growth?
(A) Increased investment
(B) Increased productivity
(C) Increased Population
(D) Increased government spending
Which of the following is not a type of Economic Development?
(A) Primary economic development
(B) Secondary economic development
(C) Tertiary economic development
(D) Quaternary economic development
Which of the following is not a goal of economic development?
(A) Increased production
(B) Increased employment
(C) Increased inflation
(D) Increased standard of living

I hope these MCQs are helpful!