
In response to that, Indian cabinet has approved National Manufacturing Policy prepared by Department of Industry Policy and Promotion (DIPP). The policy envisages increasing the share of manufacturing in GDP from the current level of 16% to 25% by 2022. It also seeks to create 100 million additional jobs by next decade. The special purpose vehicle for this targeted growth is National Manufacturing and Investment zones, which is going to be established in different parts of the country. The government will provide single window clearances to the companies who want to set up their manufacturing units. It will be based on the model of public private partnership. Small and medium enterprises will be encouraged through tax breaks. Industry leaders have welcomed this policy initiative of the government but have suggested that there is much more to be done in terms of reforming the archaic labor laws to spur growth in this sector. However, it remains to be seen how the response from the manufacturing sector will be to these zones given the high input costs and uncertain global economic scenario. I believe the cooperation by states with Center and the execution efficiency will be the key factors for the success of this policy.



