National Manufacturing Policy, faster net link for villages cleared by Cabinet

NEW DELHI: The Cabinet on Tuesday approved the National Manufacturing Policy that seeks to raise the sector's contribution to GDP and create 100 million jobs over a decade. It also cleared a Rs 20,000-crore plan to link all gram panchayats with a fibre optic broadband network and brought more people under the ambit of an interest subsidy scheme on low-cost housing.

"The NMP seeks to enhance the share of manufacturing in the GDP to 25% within a decade and create 100 million jobs as part of the inclusive growth agenda of the UPA," commerce minister Anand Sharma said after the cabinet meeting.

At present, manufacturing contributes 15% to 16% to the country's GDP.

Close to 20 million people are added to the country's work force every year, for which employment opportunities need to be created. The prime minister had approved the policy in June but the details took long to settle because of inter-ministerial differences.

The policy envisages large integrated industrial townships, national investment and manufacturing zones (NIMZs) with state-of-the-art infrastructure, lesser regulatory and compliance burden, faster clearances and fiscal incentives.

It is proposed that the zones, developed with private participation, will be positioned as self-governing and autonomous bodies.

Industry welcomed the new policy.

"The Policy is one of the most significant developments since the economic reforms of 1991, and is poised to transform the industrial landscape in the country," ITC chairman YC Deveshwar said, adding, "the move will power a new paradigm of competitive growth in the country".

FICCI secretary Rajiv Kumar said, "We are very pleased that the manufacturing policy has been passed and hope it will be implemented immediately. State governments should take up the opportunity to build NMIZs, which will provide a fillip to manufacturing."

But, some experts were skeptical.

"As far as land acquisition for NMIZs is concerned, it will not be easy in our country," Planning Commission member Arun Maira said, adding, "But overall, I don't expect it to be a repeat of the SEZ episode, we have learnt from our mistakes there."

The Cabinet also raised the housing loan ceiling for availing 1% interest subsidy from 10 lakh to 15 lakh. It also raised the cost of houses covered under the scheme to 25 lakh from 20 lakh. The decision is likely to benefit borrowers by up to 14,865 every year.

A budget provision of 500 crore has been made for 2011-12 for the implementation of the scheme, which was introduced in 2009.

The government also approved capital infusion of 3,000 crore over two years in state-run National Bank for Agriculture and Rural Development ( NABARD) to help it mobilise higher resources from the market.

The move will raise the bank's paid-up capital to 5,000 crore. At present, the authorised capital of Nabard is 5,000 crore, of which, the paid up capital is 2,000 crore.

The Cabinet also cleared a national optical fibre network for panchayats that will improve governance and service delivery systems at the village level. Under the scheme, the existing optical fibre network available at the district and block headquarter levels will be extended to gram panchayats.