New industrial policy on anvil

New Delhi: The Department for Promotion of Industry and Internal Trade (DPIIT) is working on a new industrial policy that proposes to increase financing sources for industry and a scheme for promoting Made in India brand, sources said.

It has suggested various ways for wider access to finance for the industry such as setting up of a development finance institution to provide finance at competitive rates and considering using some part of foreign exchange reserves for such funding. The draft - Statement on Industrial Policy 2022 – Make in India for the world - has been circulated to different ministries for their views and comments. The proposed policy, sources said, is aimed at addressing issues and challenges of industry through certain policy measures to foster and create an innovative and competitive industrial ecosystem in the country.

To achieve the goals, it has identified six objectives such as the focus on competitiveness and capability; economic integration and moving up the global value chain; promoting India as an attractive investment destination; nurturing innovation and entrepreneurship; and achieving global scale, and standards.

Sources said that the proposal also includes the implementation of an integrated investment promotion strategy by involving district, state, national and international market synergies. About the scheme for Made in India brand, they said it could serve as a platform for manufacturers to demonstrate local value addition which can enhance the country's credibility as a source of quality products.

Other suggestions in the proposed policy include providing performance-based loans and incentives for innovation and green growth; leveraging fintech; encouraging MSMEs to choose the corporate bond market; and accepting intellectual property rights as collaterals for loans. Besides, it has suggested enabling supply chain financing; encouraging microfinance institutions to form cooperative groups and finance micro-enterprises at affordable rates.

This will be the third industrial policy after the first in 1956 and the second in 1991. It is likely to replace the industrial policy of 1991 which was prepared against the backdrop of the balance of payment crisis. Further, the draft suggests rolling out social security schemes for women workers, and inclusion of labour-intensive industries under the production-linked incentive scheme. It also proposes incentivising public procurement to promote Make in India, creating a national digital grid, developing a robust data protection regime, setting up of a technology fund, and creating a task force to continuously identify skill gaps. For enhancing export competitiveness, the draft has proposed strengthening of the export finance systems. On nurturing innovation, it has proposed the creation of innovation zones at the level of urban local bodies and the formulation of a national capacity development program. The Department for Promotion of Industry and Internal Trade (DPIIT), under the Commerce and Industry Ministry, in August 2017 had floated a draft industrial policy.