FICCI suggests 12-point action plan to boost manufacturing sector

October 31, 2013 6:27 am

FICCI suggests 12-point action plan to boost manufacturing sector
The suggestions in the FICCI mandate, if implemented, will lead to a 10 per cent manufacturing growth on a long-term basis and could create 67 million jobs in the manufacturing sector
With a focus on job creation and skill development, industry body FICCI suggested a 12-point action plan to ensure that manufacturing rebounds and creates jobs for the millions who are going to join the labour force in the next 10 to 15 years. The action plan outlines measures aimed at building an enabling policy framework to attract investments.
FICCI’s 12-point manufacturing mandate suggests, “A 10 per cent manufacturing growth on a long term basis with a potential to create 67 million jobs in manufacturing directly, provided some pro-active labour market policies are implemented as suggested in the mandate. With 10 per cent manufacturing growth, we can achieve a size of $950 billion by 2025 from the current size of $ 250 billion for our manufacturing sector and take the total employment in manufacturing to 115 million during the period. While, this remains short of the targeted additional employment of 100 million by 2025 as per the National Manufacturing Policy this would be more realistic given the current economic scenario.”
The Mandate suggests 12 broad areas with specific measures for the short and long term, to stimulate growth and job creation in manufacturing on a sustainable basis. These 12 areas are:. Macro-economic environment and measures. Taxation. Labour policies and workers’ housing. Feedstock, raw materials & electricity for manufacturing. Land for manufacturing. Industrial corridors and clusters. Ease of doing business. Infrastructure. Free trade agreements & international trade. MSME. Stimulating demand. Skill development.
The mandate recommends, scope of the provision of investment allowance for new plant and machinery announced in the Budget needs to be expanded. “The minimum threshold of investment of Rs. 100 crore is significantly high and would deprive smaller investors an opportunity to take advantage of this facility. The threshold for minimum investments needs to be reduced from Rs. 100 crore to Rs. 10 crore to encourage investments by smaller investors also. Further, the period for which the allowance is available should be increased from 2 years to 5 years as projects need longer gestation period,” it adds.
The mandate also pointed out, retrospective amendments in the tax laws have lead to deterioration of India’s image as an investment destination and adversely impacted the business climate. Therefore, it suggests, government should avoid retrospective amendments in law to override a benefit available to the taxpayer and retrospective amendments should be made in rarest of rare cases as suggested in Shome Committee report on indirect transfer of assets. This will help in creating conducive business climate and reviving flow of investments in India.
Besides, the recommendations call for expediting investigations into instances of dumping, according ‘priority sector’ status to manufacturing for securing adequate power supply, developing integrated solar manufacturing hubs and ask the government to have a relook at the Land Bill. It says, “Any legislation should enable Government to assist manufacturing industry especially the large projects in acquiring land. The Land Bill in its current form rules out acquisition of land for manufacturing industry.”
According to FICCI, today, the biggest challenge is that institutions which execute single window clearance system both at the centre and State are not sufficiently empowered to provide such one-stop shop services to investors. It demands, “Both Centre and State should have timelines defined in respect of all clearances. In case, the decision is not taken within specified timeline, the clearance should be deemed’ to have been given on expiry of timeline.”
The mandate also suggests setting up of a single quasi-judicial regulatory authority for dispute resolution to enable faster rollout of infrastructure projects.
The current Government Procurement policy of MSME Ministry provides for mandatory sourcing of minimum 20 per cent by Government departments from both manufacturing and services MSMEs. The 12-point action plan suggests, “This should be changed to mandatory sourcing of at least 20 per cent for MSME in manufacturing in addition to sourcing from service sector MSME.”