ANNOUNCEMENT 25 Oct 2011In October 2011, the government of India announced a new commercial policy plan.
NUMBER OF INTERVENTIONS
On 25 October 2011, the Government of India announced the National Manufacturing Policy. The Policy aims to increase the manufacturing growth rate from 9% to 12% to 14% over the medium term, and increase the share of manufacturing in GDP from 16% to 25% by 2022.
Key initiatives of the policy are summarised as follows -
1) For Small & Medium Enterprises (SMEs) in manufacturing
- Inclusion of SMEs as Priority sector funding for banks
- Faster clearance of governmental and regulatory procedures
- Tax pass-through stats for Venture Capital Funds with a focus on SMEs
2) National Investment and Manufacturing Zones (NIMZs)
- Conceived as large industrial greenfield townships to promote world class manufacturing
- Government Purchase Preference given to units in NIMZs
- Subsidy on interest on working capital loans
- Viability Gap Funding (VGF) accessible from the government
- Expenditure on filing patents shared by the government
- Other tax exemptions and concessions to be announced from time to time
3) Initiative to increase labour productivity
4) Simplification and Rationalization of business regulations
5) A Technology Acquisition and Development Fund (TADF) to be established for sharing patent registration costs and using energy efficient technologies
6) Focused policy inititave for special sectors when deemed necessary. These sectors include employment intensive industries, capital goods, strategic industries and industries where India has a comparative advantage
7) Use "local value addition"requirement along with government to enable development of domestic manufacturing capabilities
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.