Thursday, October 27, 2011

7 industrial townships to create 100 million jobs

A large part of this report appeared in DNA's Mumbai edition on October 26, 2011

Part of Congress' 2009 manifesto, national manufacturing policy promises ITIs, polytechnics, green technologies

New Delhi: Information and Broadcasting minister Ambika Soni and commerce and industry minister Anand Sharma announced on Tuesday cabinet's approval of the national manufacturing policy, and they drew attention to the fact that this was the implementation of the electoral promise made in the 2009 Congress manifesto.

Clearly, the scandal-scarred Congress-led UPA government of prime minister Manmohan Singh wants to turn the tide through big ticket economic programmes at a time when the political fortunes of the UPA government and of the Congress have reached the nadir.

The policy envisages seven manufacturing and investment zones (MIZs), of which three fall in the Delhi-Mumbai industrial corridor (DMIC), that will create 100 million jobs and raise the share of manufacturing in the GDP to 25 per cent by 2022 from the 15 per cent to 16 per cent share at the present.

Sharma said that the seven zones were sector- and region-neutral, though two of the seven fall in Maharashtra, apart from one each in Uttar Pradesh, Madhya Pradesh, Haryana and Gujarat. Each of them would spread over a minimum area of five thousand hectares. He said that land will be allocated by the state governments and he did not see any hurdle because some of the state governments already had land-banks.

The other important decision was to create the optical fibre network which will connect the 2.5 lakh panchayats of the six lakh villages, and the target is to get it done in the next two years with an outlay of Rs 20,000 crore. The right of way for laying down the optical fibre network will have to be cleared by state governments, but the project will be funded by the central government, central public sector undertakings.

Telecom and information technology secreatry R.Chandrasekhar responding to the DNA query whether this was the phase of last-mile connectivity replied said that this was the middle-mile connectivity, which will bring into the network all the public institutions at the village level, and which will help in spreading e-health and e-governance. He admitted that the last mile connectivity will be when private and public service providers provide the individual connections.

Both the MIZs and the laying of optical fibre network which will provide the panchayats with the boradband network, will be executed through special purpose vehicles (SPVs).

The MIZs are to have private sector participation and to ensure this the policy has provisions to enable small and middle enterprises (SMEs) to set up units through venture capitalists, who will find financial backing from the nationalised banks and insurance companies. “This is to the unleash the entrepreneurial enregies of young India,” Sharma assured.

The new zones, which are a variant of special export zones (SEZs) but with a broader domestic base, have enormous incentives through subsidies for use of green technologies and set up industrial training centres and polytechnics to create the skilled work force to make them hum. Subsidies will also be used to create patent pools for green technologies.

The zones, the commerce and industry minister, said will be labour-friendly, and that unlike the existing exit policy, the new provision is to redeploy the work force in the same zone.

Sharma revealed that the share of manufacturing in India's GDP is low in comparison with economies at a similar stage of growth and development, and that it has declined over the last one-and-a-half decades. He said that the share of manufacturing in the GDP in South Korea was 28 per cent, in Indonesia 27 per cent, in Thailand and China (34 per cent).

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