Manufacturing policy suffers setbacks
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The Industry Ministry's proposal to ease labour and environment laws in special manufacturing zones (SEZ) has not found support from the labour and environment ministries, senior official said today.
"... Labour Department is citing ILO (International Labour Organisation) obligations... One serious difference of opinion I got is that everybody is talking about (their) sovereign functions, including Environment (Ministry)," Department of Industrial Policy and Promotion (DIPP) Secretary R P Singh said here at a Ficci function on Manufacturing Policy.
The draft national manufacturing policy, which aims to attract overseas investment, besides increasing the share of manufacturing in the GDP, has been stuck due to inter-ministerial differences, with the opposition coming mainly from the labour and environment ministries.
"I did not expect the Labour Department response to be so lukewarm. We are coming on some kind of consensus, but I am not fully satisfied," Singh said.
He asked industry to talk directly with the Labour Department and labour unions regarding the issue.
The draft policy has also suggested that the proposed National Manufacturing Investment Zones (NMIZs) – big enclaves which could even subsume special economic zones – should be given the flexibility to downsize labour.
Likewise, it recommended changes in environment norms that come in the way of investment.
Meanwhile, Singh also said the Revenue Department is veering round to the proposal for extending capital gains tax exemptions on equity investment in NMIZs.
On the revenue side, the DIPP has asked for an exemption of capital gains tax in the NMIZs in case equity investment is made in the manufacturing sector.
"Finally, Revenue Department has seen merit in this and hopefully they are agreeing to this. Now, we are working modalities with them as to how to check the misuse of this...," he said.
Meanwhile Commerce and Industry Minister Anand Sharma today met new Environment Minister Jayanthi Natarajan and discussed industry concerns over the clearance of projects and the proposed policy.