Union Cabinet refused to clear the proposed national manufacturing policy

NEW DELHI: In a setback to plans on setting up industrial zones, the Union Cabinet refused to clear the proposed national manufacturing policy due to 'last minute'' objections by the labour and environment ministries over flexibilities in laws for units in the zones. The policy has been referred to a group of ministers that will try to resolve the differences now.

Earlier this month, Commerce And Industry Minister Anand Sharma had announced that he expected the policy to be in place within a few weeks, but this will certainly not happen now.

"There are still some areas of differences that remain between the DIPP and the labour ministry on applicability of labour laws which the GoM will have to sort out," a DIPP official said.

Environment Minister Jayanthi Natarajan and Labour Minister Mallikarjun Kharge both sent communications to the DIPP last evening registering their objections. "The labour ministry specifically objected to the proposed service entity for small and medium enterprises for taking care of labour-related issues, like provident fund, on the ground that such statutory functions can't be outsourced," a government official told ET.

Natarajan opposed the inclusion of state pollution board officials in the SPV to be created to carry out environment impact assessments as she felt it would lead to Centre and state conflicts, the official added.

The labour ministry had earlier objected to the draft manufacturing policy proposal as it sought flexibilities on application of labour laws on units in the zones, including easier hire and fire laws and outsourcing of inspections to private players.

The environment ministry, too, had objected to the suggestion of giving faster environment clearances to units in the zones. All ministries later said that the issues had been resolved with the labour ministry claiming that the DIPP had accepted the view that there couldn't be two set of labour laws in the country.

The NMP aims at creating over 220 million jobs in the next 15 years.