Govt amends rules to ease licensing of manufacturing industries

Further to last week’s announcement easing licensing restrictions on manufacturing industries to remove `Licensing Raj’ as improve the Ease of Doing Business’, the central government today said that for all new projects in the manufacturing sector that are not covered by the compulsory licensing of their substantial expansion, the only requirement will be to file a memorandum.

The central government today announced a set of rules to further amend the Registration and Licensing of Industrial Undertakings Rules, 1952.
These rules, called the Registration and Licensing of Industrial Undertaking (Amendment) Rules, 2019, come into force on the date of their publication in the Official Gazette.
Also, in the Registration and Licensing of Industrial Undertakings Rules, 1952 for the words `ministry of industry (Department of Industrial Development) or the `ministry of industrial development’ wherever they occur, the words `ministry of commerce and industry, Department for Promotion of Industry and Internal Trade” shall respectively be substituted,” a government release stated.
The government also made changes in rule 10 of the principal rules, substituting sub-rule (2), with, "(2) The Central Government may, by notification in the Official Gazette, appoint one or more committees, consisting of such number of members as it may think fit, to represent the Ministries or Departments of the central government dealing with:
  • Department for Promotion of Industry and Internal Trade;
  • Industries specified in the First Schedule to the Act;
  • Ministry of home affairs;
  • Commerce; and
  • Corporate Affairs.
Provided that the central government may, if it deems fit, include in such committee any other member to represent any other ministry or department.”
Also, in the principal rules, in rule 15, the amended sub-rule (1) for the figure and words “3 months” has been substituted by “five months” while in sub-rule (2) the words, the words “three months” has been substituted with the words “five months.” 
A release issued by the commerce and industry ministry last week said no compulsory licence was required for manufacturers of goods, barring four segments of tobacco items, defence equipment, hazardous chemicals and industrial explosives. 
“As the DPIIT (Department for Promotion of Industry and Internal Trade) is not issuing licence in any other case, Press Note 17 (1984 series) has become irrelevant. Accordingly, this Press Note is withdrawn,” the commerce and industry ministry said. 
Earlier this year, the ministry had proposed to simplify filing procedure for industrial entrepreneur memorandums (IEMs) and said the requirement of filing IEMs at two stages stood dispensed with for all the businesses that didn’t then require an industrial licence. The two stages of IEMs were intent and implementation.
Also, with regard to new projects for manufacturing of items that are not covered by the compulsory licensing of their substantial expansion, the only requirement will be to file a memorandum.
As per the DPIIT’s annual report, all units that are exempted from obtaining an industrial licence and those that invest more than Rs10 crore in plant and machinery (Rs5 crore for the services sector) are required to file an IEM with the government.