Have to address contentious issues to boost manufacturing: Government

NEW DELHI: The government on Tuesday said it will have to address contentious issues like land acquisition and power supply to give a boost to the manufacturing sector.

"Manufacturing is not absolutely a cake walk in India. We need much more to do. In fact, there are issues right from acquisition of land to getting power and other permissions," Minister for Heavy Industries and Public Enterprises Praful Patel said here.

He was talking to reporters on the sidelines of the Automotive Component Manufacturers Association of India ( ACMA) summit here.

Patel said the contribution of the automobile industry in the overall manufacturing area needs to grow in order to create more employment opportunities. The sector contributes 22 per cent to the country's manufacturing GDP.

To deal with land related issues, the government is in the process to make a law. The Cabinet cleared the Land Acquisition Bill yesterday.

The government is also coming out with a National Manufacturing Policy, which envisages creating world-class manufacturing and investment zones.

The proposed policy is expected to increase the sector's share to 25-26 per cent in the country's GDP by 2025 and generate 100 million jobs in the next decade.

At present, manufacturing industry contributes 16 per cent to the country's Gross Domestic Product (GDP).

Patel said the auto components sector faces competition not only from China, but also from other nations like Vietnam, Malaysia and Thailand.

The industry has been asking the ministry for extension of certain incentives, including tax-refund Duty Entitlement Pass Book (DEPB) Scheme.

Department of Heavy Industry Secretary S Sundareshan said that his department has written to the finance ministry requesting it to extend DEPB Scheme beyond September 30.

Under the DEPB, the government reimburses exporters on the taxes paid on import equivalent content of export products.