Centre to unveil ‘future-ready’ industrial policy in October:

Centre to unveil ‘future-ready’ industrial policy in October:

Context

• The government on Tuesday said it would announce the new ‘future-ready’ Industrial Policy in October, by suitably incorporating measures to facilitate the use of smart technologies such as the internet of things (IoT), artificial intelligence (AI) and robotics for advanced manufacturing.

What is this new policy?

• The new policy would aim at making India a manufacturing hub by promoting ‘Make in India’, also that it would incorporate the National Manufacturing Policy.

Wide consultations

• Commerce and Industry Minister Nirmala Sitharaman would hold discussions on the framework in Chennai, Guwahati and Mumbai with stakeholders, including industry captains, think tanks and State governments.
• The Department of Industrial Policy and Promotion (DIPP – the nodal body for the new Policy and part of the Commerce and Industry Ministry) has pursued comments, feedback and suggestions from the public, by September 25, on a discussion paper on the policy.

Outcomes

The ‘illustrative outcomes’ of the policy sketched in the paper include:

• Increasing the number of Global-Indian firms in the Fortune-500 category in the long-term,
• In the medium-term helping attract $100 billion inward FDI annually
• It supports outward FDI to stress Indian presence in world markets, and addressing the problem of low job creation in the formal sector.
• Developing alternatives to banks and improving access to capital for MSMEs through ‘peer to peer lending’ and ‘crowd funding’.
• Providing a credit rating mechanism for MSMEs.
• Addressing the problem of inverted-duty structure.
• Balancing it against obligations under multilateral or bilateral trade agreements.
• Studying the impact of automation on jobs and employment.
• Ensuring minimal/zero waste from industrial activities and targeting certain sectors to radically cut emissions.

Six thematic focus groups:

•       Manufacturing and MSME;
•       Technology and innovation;
•       Ease of doing business;
•       Infrastructure, investment, trade and fiscal policy; and
•       Skills and employability for the future, would facilitate inputs.

What are focus groups?

• Focus groups, with members from government departments, industry associations, academia, and think tanks have been set up to delve deep into challenges faced by the industry in specific areas.
• Also a Task Force on Artificial Intelligence for India’s Economic Transformation has also been constituted which will provide inputs for the policy.

Constraints

• The discussion paper said the constraints to industrial growth include inadequate infrastructure, restrictive labour laws, complicated business environment, slow technology adoption, low productivity, challenges for trade including the Indian MSME sector facing tough competition from cheap imports from China and FTA countries, inadequate expenditure on R&D and Innovation.
• These constraints function in tandem to increase cost of goods and services.
• As they are strongly entwined, they exacerbate the disadvantages.
• “The nexus needs to be broken at more than one link to ensure that the spin-off is in the positive direction,” the paper added.