Why in news?
The government is working on a new industrial policy to make the manufacturing prospects in the country better.
What is the aim of the policy?
- It subsumes the National Manufacturing Policy.
- It primarily aims at making India a manufacturing hub.
- The Department of Industrial Policy and Promotion, the nodal body for the new Policy, has floated a discussion paper inviting feedbacks.
- Focus groups, with members from government departments, industry associations, academia, and think tanks have been set up to look into the challenges faced by the industry.
- Six thematic focus groups include manufacturing and MSME, technology and innovation, ease of doing business, infrastructure, investment, trade and fiscal policy, skills and employability.
- Besides, a Task Force on Artificial Intelligence for India’s economic transformation has also been constituted to provide inputs for the policy.
What is the need?
- Since the last Industrial Policy announced in 1991, India has witnessed transformation into one of the fastest growing economies in the world.
- It is now required to deploy a different set of ideas and strategies to build a globally competitive Indian industry.
- As the discussion paper highlights, there are certain constraints to industrial growth that have to be addressed.
- This include -
- inadequate infrastructure
- restrictive labour laws
- complicated business environment
- slow technology adoption
- low productivity
- inadequate expenditure on R&D and innovation
- challenges for trade including the Indian MSME sector facing tough competition from cheap imports from China and FTA countries
What are the features of the policy?
It proposes to incorporate a range of measures for the following -
- Facilitating the use of smart technologies such as internet of things (iot), artificial intelligence (AI) and robotics for advanced manufacturing.
- Increasing the number of global Indian firms helping attract inward FDI and supporting outward FDI to assert Indian presence in world markets.
- Addressing the problem of low job creation in the formal sector.
- Enhancing industrial competitiveness
- Developing alternatives to banks and improving access to capital for msmes through options like the peer to peer lending and crowd funding.
- Providing a credit rating mechanism for msmes.
- Addressing the problems with duty structure and also balancing it against obligations under multilateral or bilateral trade agreements.
- Studying the impact of automation on jobs and employment.
- Ensuring minimal/zero waste from industrial activities and targeting certain sectors to radically cut emissions.
- Reviewing the FDI policy to ensure that it facilitates greater technology transfer, leverages strategic linkages and innovation.
Source: The Hindu
