Decision on FDI in multi-brand retail likely soon

Written by Timsy Jaipuria | Updated: Oct 26 2011, 07:57am hrs
The Cabinet cleared the new national manufacturing policy on Tuesday. In an interview with Timsy Jaipuria, commerce and industry minister Anand Sharma explains why the policy is a landmark initiative after the economic liberalisation of 1991.

There is no clarity on when and how the fiscal and tax incentives envisioned in the polocy be rolled out.

The policy will be notified in the next 30 days. And it is a matter of time for the tax exemptions (to be notified). Bby the time the zoning of the land is done, the fiscal sops will be available.

The Direct Taxes Code speaks about reducing tax exemptions to the bare minimum. Even the sops for SEZs are being phased out. Isn't there a dichotomy in introducing a clutch of new incentives

The tax exemptions proposed in the policy will be introduced in the draft Direct Taxes Code which is currently in Parliament. I have met the Finance Minister on this and both of us have agreed on this.

There were issues related to environment and labour flexibilities for NIMZs. How have these been sorted out

The NIMZs that are proposed to be created under the policy will be run by SPVs headed by government secretaries facilitating single window clearances. So it will obviate the need for multiple approvals and fast-track the clearance process.

The SPV will be headed by a CEO to whom the powers will be delegated. He will be a government official and will be appointed with the consent of the industry, environment and labour ministries. One of the members of SPV will be from the state pollution control board, who will assess the environment impact.

How many NIMZs will be there and where all will these be

Since the NIMZs are mega industrial clusters, we do not aim to have more than 5 of these. The seven smart cities which will be created in the Delhi-Mumbai industrial corridor will also be notified as NIMZs once they are created. So in all 7 smart cities and plus 5 or 6 mega clusters will the NIMZs and not more than that. The first NIMZ will come up either in Rajasthan or in Maharashtra as they are already ready with the land. Gujarat and Andhra Pradesh are also keen. The state governments will be partners in these zones and the central government will be providing the trunk infrastructure.

What is holding you back on the FDI relaxation in multi-brand retail

These are political decisions. Today by clearing the national manufacturing policy we have taken a major step and now on this (FDI in retail), I will be meeting the UPA chairperson, the Finance Minister and the Prime Minster shortly. I must tell you it is under active consideration and we will come out with a decision soon.