Govt to set up MIRs, may ease FDI norms
Bouyed by the success of Special Economic Zones, the government now plans to set up five manufacturing investment regions and revise Foreign Direct Investment norms in manufacturing to boost growth.
By PTI |
NEW DELHI: Bouyed by the success of Special Economic Zones, the government now plans to set up five manufacturing investment regions and revise Foreign Direct Investment norms in manufacturing to boost growth.
"We are looking at how, if at all required, FDI in manufacturing can be further liberalised. There is a scope for further liberalisation. We are looking at it," Commerce and Industry Minister Kamal Nath said at a press conference on Tuesday.
He said that many recommendations have been received on liberalising FDI norms and they were being studied.
The industries where government was considering further liberalisation include, leather, pharma and engineering goods, he said, adding that the changes would be aimed at removing procedural bottlenecks.
FDI in manufacturing grew 75 per cent to $2 billion last fiscal and government was looking at doubling it in the next two years, he said.
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Nath said that to increase the share of manufacturing in Gross Domestic Product (GDP) to 24 per cent from 17 per cent at present the sector would need to grow by 12-14 per cent."In April manufacturing grew 10.4 per cent," Nath said, adding that in May growth in manufacturing was 12.2 per cent.
To spur manufacturing, the government is formulating a policy for Manufacturing Investment Regions (MIR) and Petroleum and Petrochemical Investment Regions (PCPIR). The MIR is proposed to cover around 100 square kilometres while the PCPIR would be stread over 250 square kilometres.
The MIRs would provide world class infrastructure and single window clearance but no fiscal incentives. The MIRs would not require any separate legislation, Nath said.
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The regions would not be given any new fiscal concessions though they might qualify for viability gap funding for setting up the necessary infrastructure, Ajay Dua, Secretary in the Department of Industrial Policy, said.Dua said state and central governments would facilitate infrastructure development but private companies could also be allowed for the purpose.
As the regions, which may include several Special Economic Zones, industrial parks, IT parks and Export Oriented Units, would not be given extra tax breaks, the finance ministry has also agreed to the proposal, Dua said.
On PCPIRs, he said five coastal states of Orissa, West Bengal, Karnataka, Gujarat and Andhra Pradesh have already made presentations and are in the process of finalising their action plan to establish these regions.
Asked about the opening up the retail sector, Nath said the government was looking to finalise a model which would generate additional economic activity and did not displace existing employment.
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