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Decision on manufacturing policy stalled on differences

The Cabinet on Thursday was forced to defer a decision on the national manufacturing policy as the environment and labour ministries persisted with their opposition to certain facilities proposed to be given to the special zones to be set up under the policy.

The Cabinet on Thursday was forced to defer a decision on the national manufacturing policy as the environment and labour ministries persisted with their opposition to certain facilities proposed to be given to the special zones to be set up under the policy. A senior commerce and industry ministry official told FE on condition of anonymity that the policy would now be considered by a group of ministers (GoM) for further discussions.

According to officials, environment minister Jayanthi Natarajan expressed concerns over the proposal to give single-window clearances for industries in the proposed national manufacturing and investment zones (NMIZs). The commerce and industry ministry which moved the cabinet note, said that once the land for an NMIZ was cleared by the environment regulator, each unit in the zone won?t need individual clearances. The labour ministry, on its part, has opposed the proposal for delegating a lot of labour-related powers to the special purpose vehicles (SPVs) that would manage the NMIZs.

Briefing media persons after Thursday?s cabinet meeting, information and broadcasting minister Ambika Soni said that labour minister Mallikarjun Kharge in the previous day wrote a letter to the Cabinet Secretariat expressing his views on certain services to be offered to NMIZs (like creation of an EPFO-like entity) and and delegation of powers to SPVs.

Kharge, currently on a visit to Turkey, was absent at Thursday?s Cabinet meeting. ?There was a discussion…some ministers had queries and the minister concerned (commerce and industry minister Anand Sharma) answered them,? Soni said.

Sources told FE that the Prime Minister had asked the commerce minister Anand Sharma to meet all the stakeholder minsters again before the policy can be cleared by the cabinet.

Meanwhile, the other proposal for giving a boost to the manufacturing by way of strengthening the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) through a fund infusion of Rs 18,500 crore was approved by the Cabinet in principle. But since the corridor is also linked to the NMIZs to come up along it, no formal nod was given to even this proposal on Thursday.

The fund infusion is for creating seven new cities in six states including Gujarat, Haryana, Uttar Pradesh and Madhya Pradesh.

At present, the government has a 49% stake in the DMIC project, while 51% is jointly held by Infrastructure Leasing and Financial Services (IL&FS) and Infrastructure Development Finance Company (IDFC).

After the cabinet approves equity restructuring of the DMIDC project, it will become a deemed government entity and will then be decided by the finance ministry which all will be the fresh stakeholder companies in the project.

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First published on: 16-09-2011 at 02:54 IST