Development of a robust manufacturing sector is the priority of the Government. It has the potential to not only take theeconomic growth to a higher trajectory, but also to provide employment. The Government is committed to remove all bottlenecks and develop India as a manufacturing hub. A number of measures have been taken by the Government in that direction.
During the last three months, the economic activity has picked up as reflected in the quarterly growth figures of GDP which grew at 5.7 % in the first quarter (Q1) of April-June 2014over the corresponding period ofthe previous year (based on CSO estimates).Industrial growth in general and growth in the manufacturing sector in particular has shown significant improvement with growth rates becoming positive as compared to negative growth rates in these sectors in the corresponding period of 2013-14. Gross Fixed Capital Formation (GFCF), the indicator of investment grew as much as by 7% in Q1 of 2014-15, while last year in Q1the growth rate of GFCF was negative, whichreflects upbeat mood of investors and augurs well for the future growth prospects. This perceptible improvement is a reflection of the improved business environment and market sentiment. The HSBC PMI report of July and August 2014 and the Business Confidence Index recently brought out by NCAER validate the positive business sentiment.
This perceptible improvement in the economic performance in last three months is a reflection of the improved business environment and market sentiment, an outcome of the series of initiatives taken by the Government to bring about positive changes to revitalise the industrial sector in general and manufacturing sector in particular.A number of positive announcements have already been made in the Union Budget 2014-15 in that direction.
Providingan enabling and conducive environment for doing business in India isan important factor contributing to industrial growth.The emphasis of the Government has beenonsimplification of the procedures, rationalization of the existing rules and increased use of information technology to make governance more efficient, effective, simple and user-friendly. The initiativestaken for ease of doing business in India are given in the Annexure.
Foreign Direct Investment (FDI) being an important resource, the Government has taken a number of steps to attract more FDI inflows into the country. The FDI policy in Defence sector has been liberalised and FDI cap has been raised from 26% to 49% [vide press note 7(2014 series)]; 100% FDI under automatic route has been permitted in construction, operation and maintenance in specified Rail Infrastructure projects[vide press note 8 (2014 series)]; the norms for FDI in the Construction Development sector are being eased.FDI inflows have increased by 75 % during June and July, 2014 over thecorresponding period in previous year.
The development of industrial corridors and industrial clusters has been fast paced with a series of initiatives:
· A new ‘National Industrial Corridor Development Authority’ is being created to carry out project development activities, apprise and sanction projects, implement and coordinate all central efforts for industrial corridor development of all Industrial Corridors.
· Work on 5 smart cities namely, Dholera in Gujarat;Shendra-Bidkin in Maharashtra; Integrated Industrial Township in Greater Noida (UP); Integrated Industrial Township near Ujjain (MP); Global City in Gurgaon, Haryana is moving at a fast pace in Delhi-Mumbai Industrial Corridor (DMIC).
· The Perspective Plan for Chennai-Bengaluru Industrial Corridor has been completed. ADB is working on Perspective Plan for the Vizag-Chennai phase of the proposed East Coast Economic Corridor.
· Steps are being taken to expedite the work relating to the Amritsar-Kolkata Industrial Corridor. The Feasibility Study is likely to be completed in record time.
· A Memorandum of Understanding (MoU) between China and India has been signed for promoting cooperation between Chinese and Indian enterprises including the development of industrial parks in India, so as to provide a platform for cluster type development of the enterprises of both countries. A Working Group has been set up to take the workforward
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· In continuing the initiative of developing Investment and manufacturing clusters, one additional National Investment and Manufacturing Zone (NIMZ) at Kalinganagar, Jajpur district in Odisha has been given in-principle approval, bringing the number of NIMZ’s which have been given in-principle approval to 17.
· Besides, under the Modified Industrial Infrastructure Up-gradation Scheme, in-principle approval has been accorded to 21 Industrial projects.
AnAct recognizing National Institute of Design (NID) Ahmedabad as an institute of National Importance received assent of the President on 17 July 2014. This will enable NID Ahmedabad to confer degrees, promote research and function as an Apex body in Design Education. Four new National Institutes of Design are being established.
The Government is focusing on building labour intensive manufacturing. The Indian Leather Development Programme during the last 100 days has provided training to 51216 unemployed youths and 83% of these trained youths have been employed in the leather industry. To provide further impetus to skill development two new Centres of Footwear Design & Development Institutes are being set up.
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