Sunday, 30 October 2011

Vision of the visionary manufacturing policy


To improve GDP and to create livelihoods for many, a big plan had been envisioned. Just six days ago the Indian cabinet passed its ambitious plans. New town ships will be made under Article 243Q-C of the Indian Constitution. Realizing that the manufacturing sector needs re-vitalization, the National Manufacturing Policy has been approved. Large size zones have been planned for the making and expansion of the manufacturing industry in India. Setting up of industrial town is going to be easy as non-fertile land has to be acquired for National Investment Manufacturing Zones (NIMZ). These are going to be in the Northern part and Western part of India. For the Eastern corridor, new system of railways is going to be made. The industrial towns to be built will have greater autonomy (sounds like SEZ story). There should be coordination amongst the different departments—industrial growth department, and Planning Commission have problem communicating the urgency and important of land acquisition to the Environment department. And Labour department will follow suit with the issue of granting ‘minimum wages’ to the workers.
Lapse in leadership. In India individuals (in government) envision growth plans; and when the implementation stage comes, they would have left their posts, and new individuals (who do not know the spirit of the plan) will implement it differently. This would give the plan an entirely new form.
Which States are planned for development? Industrial towns have been planned for development in different states of India, and individual states do not have top grade city-planners nor do they know how to make modern contracts like the PPP or BOT etc. It is the central government which has best technocratic acumen needed in the construction of industrial cities. And professionalism and acumen cannot be taught or learnt overnight. Fiscal incentives have been given to private firms for coming forward (20%). But all states should be given incentives for development, not just some. Partiality has been shown in favouring the North and Western over the rest. Only uniform policy will be successful. How the different states take this initiative will vary; for example Maharashtra state may not give land.
Incentives given by state governments. Some states give big incentives to industrialists like the state of Gujrat where industrial town will grow fast. Others may not encourage it, but also not discourage. Some will have road-blocks .There are also some amendments (like for Gram Panchayat Act) needed to make these super towns. Soon the local farmers will agitate for their share in the progress of the state and new amendments would be need in individual states as all have individual land acquisition policies. Unless the original land owners are given a role as a stakeholder, the making of infrastructure will be plagued by rural unrest/protests. There should be a forum (to redress upcoming issues) to hear the problems faced in establishing the townships. The problems will not be state specific; they will be national as these plans are national. Uniform legislation is mandatory for progress. These plans are to be implemented by public partnership models. If there is a serious hindrance which would hamper the implementation, there should be a clause to “stop building” or “exit policy”. In the new zones, buying and selling land will be made easy, as per policy. There will be tax exemption for the industries. And State Pollution Control Board will also favour industrialists as an officer will be delegated from outside. Moreover, Technology Acquisition Fund would be given to the small enterprises for making a patent pool of manufacturing methods using controlled power consumption.
Promise to make livelihoods The plans will give 100 million jobs. But industrialization reduces jobs as few people can mange in the running of factories. And with coming of electronics in as circuit boards etc, jobs are further reduced. This promise may not materialize as anticipated. This would favor the government and the industrialist but he worker will not gain. And our nation consists of only workers.
The true index of our progress is the fact that we lead meaningful lives, even with minimum fulfilment of basic needs; we manage with meager incomes, high cost of living, scarce resources, small homes with high rent, run-away inflation, exploitative Politician, dysfunctional education systems, insufficient health care, inadequate transport facilities, failing infrastructures. And now we have to industrialize quickly to overcome stagnation in our economy. When policies are not based on sound principles, they may lead to ‘plan of mice and men’ and may not become successful. There is a way out; if we implement very quickly the manufacturing policy, the growing pains (labor unrest) that industrialization brings may be overcome fast. And we will establish equilibrium, in economic growth and its public acceptance of it as early as possible.Visionary policies aer here.

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