Well-developed infrastructure is key to development

Amitabh Kant, Secretary, Department of Industrial Policy & Promotion, shares the government´s perspective on the much-talked about ´Make In India´ campaign.
What needs to be done in the infrastructure space to spur growth in manufacturing sector?
Well-developed backward and forward infrastructure is essential for manufacturing. Building a high class infrastructure is crucial to spur growth in manufacturing sector and enhancing the competitiveness of this sector in India. Other than essential infrastructure like power and land, development of integrated network of transport system is very essential which includes all roadways, railways and inland waterways. It also requires modernisation of ports and airports. Besides physical infrastructure, soft infrastructure like e-connectivity is also very important for boosting manufacturing.

If you carefully look at the bouquet of thrust sectors of ´Make in India´, a number of infrastructure sectors find place in the bouquet as well, since investment in the infrastructure space has the potential to take manufacturing forward. The government is already taking measures like increasing the capacity of railways with modernisation; construction of dedicated freight corridors, segregation of freight and passenger lines; simplification of land acquisition; constructing extensive highways and expressways; modernisation of ports: increase in capacity addition at major ports to meet growing trade volumes; full mechanisation of cargo handling and movement at ports, etc.

What can be done to facilitate the ease of doing business in the country?
We appreciate that for the manufacturing success story, we need to take the State governments along, side by side with identifying and addressing the possible irritants at policy level through reforms. We are doing our best. For providing an enabling and conducive environment for doing business in India, a number of initiatives have been taken by the government. The emphasis is on simplification of the procedures, rationalisation of the existing rules and increased use of information technology to make governance more efficient, effective, simple and user-friendly. DIPP regularly shares information on new measures through social media (Twitter and Facebook) and uploads all new initiatives in the Website http://dipp.nic.in. A copy of the recent initiatives for ease of doing business is annexed. Besides, the dedicated site of Make in India (http://www.makeinindia.com) has facilities for answering of queries of investors, including queries on sectoral policies and mechanisms at the State level.

What are the primary issues that restrict the growth of Indian players and industry in the country?
We have regular interactions with the industry and the other stakeholders to understand how we in the government can facilitate the industry to take the crucial investment decisions, and for those who are already in India, how to reduce the day-to-day difficulties that they might face on account of our policies and procedures.

Based on the feedback, I understand that tax policies, land and labour laws, skill development, availability of state of the art infrastructure, conducive environment of doing business, availability of cheap finance, environmental clearances, exit mechanism, etc., influence the competitiveness of manufacturing, of course certain industries are affected more by certain aspects. For example, extractive industries today are facing difficulties on account of restrictions imposed by court orders and environmental clearances, which affect the power sector, and in turn the competitiveness of most manufacturing industries.

Or take the instance of taxes. Multiplicity of taxes affects growth of industry and increases the transaction cost. The government is working towards simplification of the tax structure for creating a more competitive environment for trade and industry. Skill development is essential for making the youth employable as well as harvesting the latent entrepreneurship talent that they possess. Its importance for the government can been seen from the fact that a separate Department of Skill Development and Entrepreneurship in the Ministry of Skill Development Entrepreneurship Youth Affairs and Sports has been set by the government. There is a need to identify the training which would be demand-driven and industry-oriented. Skill India to be launched to skill the youth with an emphasis on employability and entrepreneur skills as announced in the recent Budget 2014-15. Further a bill has been passed in the Lok Sabha to amend the Apprentices Act in order to facilitate imparting of skills to youth.

I have already mentioned some of the initiatives taken by the government in relation to ease of doing business in India.

Madhya Pradesh recently provided exemption from some labour laws for the micro, small & medium enterprises (MSME) sector. What more can be done to ease the conditions for doing business in the country for local players?
I wish to clarify that the thrust of the agenda of DIPP is to ease the conditions for doing business in India by making a level playing field for both local industry as well as foreign investors to set up industry in India. It is very encouraging that the State governments are proactively taking steps to further simplify the regulatory business environment. From DIPP, we have taken up with the States to achieve the following national milestones of ease of doing business:

• Timelines to be defined for all clearances.
• Central & State governments to provide exemptions from rules and regulations related to labour, environment etc., subject to the fulfilment of certain conditions.
• Mechanisms for the cooperation of public or private institutions with government inspection services under the overall control of statutory authorities.
• Process of clearances by Centre and State authorities to be progressively Web-enabled.
• A combined application form and a common register.
• The submission of multiple returns for different departments will be replaced by one simplified monthly/quarterly return.
• A single window clearance for units in NIMZ.
• Ease in environment approvals.

What are the concrete steps being taken by the government to help the infrastructure sector grow?
A well-developed infrastructure is the key to the success of developmental efforts including raising manufacturing to a higher level. Development of ports, National Waterways-I, development of roads, select expressways in parallel to development of industrial corridors, were given special focus in the budget. These measures will improve the supply chain in transporting goods across cities and across borders, thereby giving impetus to the manufacturing sector. Some of the announcements in the Union Budget 2014-15 include: a diamond quadrilateral network of high speed rail, connecting major metros and growth centres of the country; an institution to provide support to mainstreaming PPPs called 3P India to be set up with a corpus of Rs 500 crore was announced.

Infrastructure Investment Trusts (InvlTs) are announced in the Union Budget 2014-15 to attract long term finance from foreign and domestic sources for PPP and other infrastructure projects including the NRIs.

FDI of 100 per cent under automatic route has been permitted in construction, operation and maintenance in specified rail infrastructure projects (like high speed trains, suburban corridors and dedicated freight line operations implemented in PPP mode) to aid modernization of rail infrastructure. Recently the government has approved easing of certain norms regarding FDI in construction sector on which we would shortly issue a Press Note after finalising the details.

One of the objectives of the ´Make in India´ initiative is to build best-in-class manufacturing infrastructure. With new smart cities and industrial clusters being developed in identified industrial corridors having connectivity, new youth-focused programs and insti¡tutions dedicated to developing specialised skills, India´s manufacturing infrastructure and capacity for innovation is poised for phenomenal growth.

A new ´National Industrial Corridor Development Authority´ is being created to coordinate, integrate, monitor and supervise development of all industrial corridors. The development of industrial corridors (DMIC, Chennai-Bengaluru Industrial Corridor, Vizag- Chennai phase of the proposed East Coast Economic Corridor, Amritsar-Kolkata Industrial Corridor) has been fast paced. The north-east is planned to be linked with other industrial corridors in cooperation with Japan. Approval has been accorded to 17 National Investment and Manufacturing Zones (NIMZ). Besides, under the Modified Industrial Infrastructure Upgradation Scheme, in-principle approval has been accorded to 21 industrial projects.

– Garima Pant