Manufacturing policy clears some hurdles

The National Manufacturing Policy that has been under the anvil for 19 months finally seems to  be about to get moving with Jayanthi Naatrajan, the newly-appointed environment and forests minister, agreeing to provide a special dispensation for industrial units coming up in proposed manufacturing zones.

Additionally, the revenue department has also accepted the demand for capital gains exemption to small scale enterprises, according to industry secretary R P Singh who was speaking at a Ficci conference.

The proposal approved in-principle by the revenue department was aimed at improving flow of funds to SMEs, and according to Singh the move would be helpful as it would enable entrepreneurs to raise equity by selling ancestral properties help raising their level of investments, which in turn would boost employment.

Also, he said the closure speed up proposals, the bugbear of Indian industry for long had been accepted by the ministry of corporate affairs. According to a draft policy paper it was suggested that companies in the proposed manufacturing zones purchase job loss policies that would help faster settlement of dues in case of closure.

Alternatively, for settlement of labour dues, independent of other claims, a sinking fund was proposed for each zone and it was proposed that all units contribute from their profits to create the fund.

The proposal would facilitate expeditious re-deployment of assets of unviable units as such disposal of assets would be independent of settlement of dues of labour, according to Singh.