The government announced the nation's first-ever manufacturing policy recently -- the news looks good. It is an undeniable fact that the health of the manufacturing sector, which relies largely on government support, is the key to a healthy economy. This sweaty business can propel economic growth and create million of jobs. Seen from this angle, the National Manufacturing Policy, which I think should have come much earlier, is certainly a welcome development.
The manufacturing policy, as widely reported in the media, aims at increasing sectoral share of manufacturing in GDP to at least 25 percent, creating 100 million jobs in the next 10 years, cutting industry red tape, incentivizing green technology and infrastructure development, and liberalising labour and environment regulations, among many others. All these goals are desirable but ambitious, and if proper planning and efforts are not put on implementing the policy, the whole plan may turn futile in the coming years. The biggest challenge, I think, is the implementation of the policy.
In addition, there are some other important issues. Firstly, the basic benefits under the policy will be available only to a select firms put up in the proposed National Investment and Manufacturing Zones (NIMZs). The rest of the companies, which are not operating from such a zone, will be deprived of the benefits. So, there is a good possibility that only a bunch of specially privileged manufacturers will be created.
Another concern is that the policy has made it easy for companies working from a manufacturing zone to hire and lay off workers. In other words, there would be easing of the existing labour laws. As a result, it will be easier for those units to deal with labour problems, but at the same time this may result in labour exploitation.
The NMP, which has taken two years to be framed, rightly addresses a number of major industry concerns as I have already said. Here I don't want to spread pessimism but just raise the question whether there is scope for further improvement in the policy. I want to emphasise the need for caution to ensure that there remains no scope for corruption, discrimination and labour exploitation while building the nation's manufacturing muscles.
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