"There may be many road blocks on the way to make that (NMP)

actually implementable but we are on that path and I think its a tribute
that a policy has been established and the government intends to stand by
it,“

-Ratan
Tata
The Indian government approved a long-debated
manufacturing policy on October 25, 2011

 The intent of the policy is to boost the country’s

manufacturing capability

To increase the share of manufacturing sector from the

current level of around 16% of GDP to 25% by 2022

To create 100 million new jobs by 2022 in special

manufacturing hubs.
Increase technological depth and value addition in
India's manufacturing to enable India to improve its trade
balance which has been deteriorating with increases in
imports (including large volumes of manufactured
goods) exceeding exports.

The NMP would be a key enabler for setting of

National Manufacturing and Investment Zones
(NMIZs), including the ambitious Delhi-Mumbai Industrial
Corridor (DMIC).

 This could be critical for India as an expected 130

million Indians will be joining the workforce, many of
whom may not be qualified to participate in India’s
growing software industry.
In India, manufacturing as a share of GDP is much
lower than in economies such as China, where it is more
than 40%.

Low labour costs could shift some manufacturing to

India, and with a growing domestic market, local
manufacturing could also have logistical benefits.

Electronics are likely to account for a large share of

total manufacturing, which means that India’s new policy
could be very important for the global electronics supply
chain.
There will also be incentives for electronics,
semiconductor and LED industries, as well as improved
taxation policies such as a new goods and services tax
(a form of a value-added tax) system.

The policy provides for compensation of 20 days for

every year of service against the norm of 15 days. The
compensation mechanism can be either a job loss
insurance policy by companies or a common sinking
fund set up by all units which can be dipped into in case
a particular unit shuts shop.

The policy also allows small and medium enterprises

exemption from long-term capital gains if the sale
proceeds of a residential property are reinvested in the
equity of a new start-up company.
“It hopes to... give comfort to investors through a single-window
clearance mechanism,”

-Anand Sharma,
Commerce and Industry Minister
Good industrial policy is not about micro-managing industry, nor is it
about 'picking winners' - particular firms and technologies to bet on - a
risky approach that has worked sometimes in other countries but failed
often too.

Sound industrial policy is the process of accelerating learning within a

country's industrial eco-system that enables enterprises within it to
improve their competitiveness faster than enterprises in other countries.
 Source:

•www.displaysearchblog.com

•www.articles.economictimes.indiatimes.com

•www.indianexpress.com

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