With a view to boost exports, the government had set up Special Economic Zones. These zones were built in different cities. Companies that had operations in these zones enjoyed special benefits that included, low or zero duties, lower tax rates, etc. While the SEZs did help out with the exports, but it did little to boost the level of manufacturing in the country.
Now the government plans to set up the National Manufacturing and Investment Zones or the NMIZs. The idea is to create manufacturing hubs that will offer infrastructure, facilities as well as incentives to manufacturers.
As reported by a leading daily, the Department of Industrial policy and promotion (DIPP) has decided to expedite the process for putting in place the national manufacturing policy that would enable the creation of NMIZs. These zones would be spread over an area of 8 square km. They would offer sops like tax incentives, flexible labor laws as well as refinance facility for overseas debt. The interesting part is that these zones would provide easier exit norms for the foreign investors. The zones would be a combination of public utilities, logistics, residential areas as well as environment protection mechanism. They would include the SEZs and the industrial parks within their folds. These measures would boost the much needed investment in the manufacturing space. However, the government is hoping to rely more on the private sector for the investment required for setting up these regions.
The zones would be set up on the lines of those in China. The manufacturing zones in China have been greatly responsible for giving the thrust to the shining manufacturing sector of the country. The DIPP hopes to see a similar performance in India as well.
The manufacturing sector is expected to add nearly 250 m jobs in the next 15 years. It is expected to be the biggest growth sector for the country that would boost its GDP growth in the years to come. The government has targeted to increase the share of manufacturing in the GDP to 25% over the next 10 years. It currently contributes 16% of the country’s GDP. However, the sector is currently far less efficient as compared to that in other countries like China and Japan. The new manufacturing policy is expected to remove the bottlenecks and handicaps that are faced by the Indian industry.