1/9/2019 Suresh Prabhu: Ministry sends new industrial policy for Cabinet approval: Suresh Prabhu - The Economic

esh Prabhu - The Economic Times

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Ministry sends new industrial policy for Cabinet approval:

Suresh Prabhu
BY KIRTIKA SUNEJA, ET BUREAU | UPDATED: DEC 10, 2018, 07.49 AM IST Post a Comment

The New Industrial Policy has been sent for the Union Cabinet’s consideration, commerce
and industry minister Suresh Prabhu said, proposing a new regime that aims to create
jobs for the next two decades and attract $100 billion foreign direct investment (FDI)
annually.

“For the industrial policy, the Cabinet note has been sent. We were putting in place an
action plan on how to implement it and that is why it took time,” he said.

The New Industrial Policy, which will replace the 27-year-old existing policy, aims to
resolve bottlenecks arising from inadequate infrastructure, restrictive labour laws and
complicated business environment. The policy is in sync with the government’s ‘Make in
This will be the third industrial policy after the ones
India’ target to increase the share of the manufacturing in the economy to 25% by 2022 released in 1956 and 1991.
from 16-17% now.

Big Change:
The policy would have some financial implications as the government may provide The end of Five-Year Plans: All you need to know
incentives for use of transformational technologies like artificial intelligence, internet of
things, and robotics.

An elaborate administrative machinery, including a steering committee for effective implementation of the policy, is also on the anvil.

The major reform proposed ahead of general elections next year would address the issue of inverted duty structure and develop
alternatives to banks for improved access to capital for micro, small and medium enterprises (MSMEs) such as peer to peer lending and
crowd funding.

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“We will give infrastructure, this is our commitment. We are already making industrial corridors and we want to make country specific
clusters in those,” Prabhu added.

The new policy also takes into account the competition from China, specifically addressing productivity and MSMEs.

https://economictimes.indiatimes.com/news/economy/policy/ministry-sends-new-industrial-policy-for-cabinet-approval-prabhu/printarticle/6702113… 1/2
1/9/2019 Suresh Prabhu: Ministry sends new industrial policy for Cabinet approval: Suresh Prabhu - The Economic Times

As per the Department of Industrial Policy and Promotion (DIPP), productivity as measured by value added per worker and average
wages in manufacturing in India are only one-third of that in China.

“Differences in productivities across sectors and across firms within the same sector make matters worse. Workers in India are
overwhelmingly employed in low productivity and low wage activities,” the department has said.

Indian MSMEs are facing tough competition from cheap imports from China and free trade agreement countries.

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