New Industrial Policy

 

Relevancy

  • G.S. Paper 2,
  •  Aim of the policy
  • Features and Need of the policy

Recently

  • The government is working on a new industrial policy to make the manufacturing prospects in the country better.

Aim of the policy

  • It primarily aims at making India a manufacturing hub.
  • It subsumes the National Manufacturing Policy.
  • Focus groups, with members from government departments, industry associations, academia, and think tanks have been set up to look into the challenges faced by the industry.
  • The Department of Industrial Policy and Promotion, the nodal body for the new Policy, has floated a discussion paperinviting feedbacks.
  • Besides, a Task Force on Artificial Intelligencefor India’s economic transformation has also been constituted to provide inputs for the policy.
  • Six thematic focusgroups include manufacturing and MSME, technology and innovation, ease of doing business, infrastructure,  investment, trade and fiscal policy, skills and employability.

Features of the policy

  • It proposes to incorporate a range of measures for the following –
  • Ensuring minimal/zero waste from industrial activities and targeting certain sectors to radically cut emissions.
  • Enhancing industrial competitiveness
  • Increasing the number of global Indian firms helping attract inward FDI and supporting outward FDI to assert Indian presence in world markets.
  • Addressing the problems with duty structure and also balancing it against obligations under multilateral or bilateral trade agreements.
  • Reviewing the FDI policy to ensure that it facilitates greater technology transfer, leverages strategic linkages and innovation.
  • Facilitating the use of smart technologies such as internet of things (iot), artificial intelligence (AI) and robotics for advanced manufacturing.
  • Providing a credit rating mechanism for msmes.
  • Addressing the problem of low job creation in the formal sector.
  • Developing alternatives to banks and improving access to capital for msmes through options like the peer to peer lending and crowd funding.
  • Studying the impact of automation on jobs and employment.

Need of the policy

  • Since the last Industrial Policy announced in 1991, India has witnessed  transformation into one of the fastest growing economies in the world.
  • It is now required to deploy a different set of ideas and strategies to build a globally competitive Indian industry.
  • As the discussion paper highlights, there are certain constraints to industrial growth that have to be addressed.
  • This include –
    • Inadequate infrastructure
    • Restrictive labour laws
    • Complicated business environment
    • Slow technology adoption
    • Low productivity
    • Inadequate expenditure on r&d and innovation
    • Challenges for trade, including the indian msme sector facing tough competition from cheap imports from china and FTA countries

 

 

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