YEAR END REVIEW- 2014 –

Measures to Bring Industry and Manufacturing Centre-Stage for Economic Growth Marks 2014

In the wake of global economic slowdown persisting in 2013-14, India’s GDP growth for 2013-14 had recorded just 4.7% with industry growth at 0.4% and manufacturing growth recording a negative growth of -0.7%. During the year several initiatives were taken   to give the necessary thrust to industry, whose share in the GDP was hovering around 15%.

1.Ease of Doing Business.

Major Initiatives have been taken in 2014 for improving ‘Ease of Doing Business’ in India through simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient and effective. 

A comparative study of practices followed by the States for grant of clearance and ensuring compliances were circulated among all the states for peer evaluation and adoption, and Chief Ministers were requested to partner with DIPP in taking these initiatives forward to ease the business regulatory environment in the country. Other suggestions include filing of returns on-line through a unified form; placing a check-list of required compliances on Department’s web portal; replacing all registers required to be maintained by the business with a single electronic register; no inspection without the approval of the Head of the Department; and introducing a system of self-certification for all non-risk, non-hazardous businesses.

The process of applying for Industrial License (IL) and Industrial Entrepreneur Memorandum (IEM) has been made online and this service is now available to entrepreneurs on 24x7 basis at the eBiz website.  This had led to ease of filing applications and online payment of service charges.

A major breakthrough has been pruning the list of Defence industries which require industrial licensing. Dual use items, having military as well as civilian applications, unless classified as defence item, will also not require Industrial License from defence angle. The   requirement of affidavit from applicants that they will comply with the safety & security guidelines/procedures has been dispensed with.

After this simplification, 61 pending applications for Defence Industries have been disposed of, including granting of 43 licenses, and advising that 18 applications do not need license.

Initial validity period of Industrial License has been increased to three years from two years, also, two extensions of two years each in the initial validity of three years of the Industrial License shall now be allowed up to seven years. This will give enough time to licensees to procure land and obtain the necessary clearances/approvals from authorities. Partial commencement of production is now being treated as commencement of production of all the items included in the license. 

The latest National Industrial Classification Code NIC 2008 has been adopted, which will allow Indian businesses to be part of globally recognized and accepted classification that facilitate smooth approvals/registration.

The process of Registration with Employees State Insurance Corporation (ESIC) has been integrated with eBiz and launched for public on 12th December, 2014. Integration of 8 more Central Services with e-Biz are at an advanced stage of integration. Further, other than the Central Bank of India,  e-Biz portal has been integrated with 4 more banks, Bank of Baroda, Bank of India, Canara Bank and Punjab National Bank.

A checklist with specific time-lines has been developed for processing all applications filed by foreign investors in cases relating to Retail/NRI/EoU foreign investments and placed on the DIPP website.

2. Make in India

The ‘Make in India’ programme has been launched globally on 25^th September 2014 with 25 thrust sectors and a dedicated portal with back end support up to Sectoral and State levels for facilitation. The initiative was simultaneously launched in the Capital of all States and in several Indian Embassies/High Commissions. Few other Indian Embassies have also organized “Make in India” interactions after the launch.

The ‘Make in India” initiative is based on four pillars, which have been identified to give boost to entrepreneurship in India, not only in manufacturing but also other sectors. The four pillars are:

 (i)     New Processes: ‘Make in India’ recognizes ‘ease of doing business’ as the single most important factor to promote entrepreneurship. A number of initiatives have already been undertaken to ease business environment. The aim is to de-license and de-regulate the industry during the entire life cycle of a business.

 (ii)   New Infrastructure: Availability of modern and facilitating infrastructure is a very important requirement for the growth of industry. Government intends to develop industrial corridors and smart cities to provide infrastructure based on state-of-the-art technology with modern high-speed communication and integrated logistic arrangements. Existing infrastructure to be strengthened through upgradation of infrastructure in industrial clusters. Innovation and research activities are supported through fast paced registration system and accordingly infrastructure of Intellectual Property Rights registration set-up has been upgraded. The requirement of skills for industry are to be identified and accordingly development of workforce to be taken up.

 (iii) New Sectors: ‘Make in India’ has identified 25 sectors in manufacturing, infrastructure and service activities and detailed information is being shared through interactive web-portal and professionally developed brochures. FDI has been opened up in Defence Production, Construction and Railway infrastructure in a big way.

 (iv)  New Mindset: Industry is accustomed to see Government as a regulator. ‘Make in India’ intends to change this by bringing a paradigm shift in how Government interacts with industry. The Government will partner industry in economic development of the country. The approach will be that of a facilitator and not regulator.

An Investor Facilitation Cell has been created in ‘Invest India’ to guide, assist and handhold investors during the entire life-cycle of the business. This Cell will provide necessary information on vast range of subjects; such as, policies of the Ministries and State Governments, various incentive schemes and opportunities available, to make it easy for the investors to make necessary investment decision. Information on 25 sectors has been put up on ‘Make in India’s web portal (http://www.makeinindia.com) along with details of FDI Policy, National Manufacturing Policy, Intellectual Property Rights and Delhi Mumbai Industrial Corridor and other National Industrial Corridors.

3. E-Biz Project

• The eBiz project is one of the 31 Mission Mode Projects (MMPs) under the National e-Governance Plan (NeGP) of Government of India. The project envisages setting up a G2B portal to serve as a one-stop shop for delivery of services to the investors and addresses the needs of business and industry from inception through the entire life cycle of the business. During 2014, a momentum thrust has been given to integrate the Central services in the e-biz platform in a time bound manner.
• The eBiz platform with 2 DIPP services along with integration with Central Bank of India payment gateway and electronic Pay and Accounts Office solution were launched on 20.01.2014. Further, the Employee State Insurance Corporation (ESIC) service was launched on 12.12.2014. It is expected that 8 more Central Government Services , viz PAN and TAN services of CBDT, DIN, Name Availability, Certificate of Incorporation and Certificate of commencement of business Services of Ministry of Corporate Affairs, Exporter-Importer Code Service of DGFT and Employer Registration Service of EPFO will be integrated shortly. The initial e-PAO solution is now working with Central Bank of India, Canara bank, Bank of Baroda, Bank of India and Punjab National Bank. E-PAO solution with State Bank of India and its associate banks are currently under implementation.

4.  Liberalisation in Foreign Direct Investment (FDI)/ and facilitation of Intellectual Property Rights (IPR)

• During 2014, FDI in Defence Industry has been permitted through the Government route up to 49%. Also, higher FDI can be allowed on case to case basis.     Further, portfolio investment which was not permitted earlier has now been allowed up to 24% under automatic route.
• Other important changes in the revised policy include doing away of the lock-in period of three years, mandating that investee  company should be structured to be self-sufficient in areas of product design and development, with full Indian management and control along with Chief Security Officer being resident Indian citizen.
• Further, FDI in construction, operation and maintenance of identified railway transport infrastructure up to 100% has been permitted through the automatic route. In sensitive areas, from security point of view, FDI beyond 49% would be allowed on a case to case basis.
• Recently, the norms for FDI in Construction Development Projects (which already permitted 100% FDI through automatic route) have been further liberalised. The minimum land area restriction has been removed for serviced plots. In case of construction-development projects, minimum built up area of 50,000 sq. meter has now been reduced to floor area of 20,000 sq. meter. Minimum capitalization has been reduced from US $ 10 million to US $ 5 million. Norms relating to repatriation of funds or exit from the project have also been liberalized. Investor can exit after the completion of the project or after development of trunk infrastructure. Earlier provision to bring in entire FDI within six months of the commencement of the project has been amended to provide that FDI can be brought in till the period of 10 years from the commencement of the project or its completion, whichever is earlier. To encourage investment in affordable housing, it has been provided that minimum area and capitalization norms will not apply to the projects committing 30 percent of the total project cost for low cost affordable housing.

During 2014, approval has been given to the plan scheme for Modernization & Strengthening of Intellectual Property Offices. The scheme aims at reducing transaction costs, in improving transparency in the functioning of the IP Offices and in augmenting human resources with a view to enable examination of applications in a timely manner.

Further during 2014, the National Institute of Design has been declared as the Institute of National Importance. Four more NID are being set up in Assam, Andhra Pradesh, Madhya Pradesh and Haryana.

4.  Japan Plus

DIPP has set up a special management team to facilitate and fast track investment proposals from Japan. The team known as “Japan Plus” has been operationalized  w.e.f  October 8, 2014.

5.  Industrial Corridors

Delhi Mumbai Industrial Corridor (DMIC )

• The first node/ city level Special Purpose Vehicle ( SPV) under DMIC Project with the name and title of  “Aurangabad  Industrial Township Ltd.” has been incorporated. 
• Integrated Industrial Township Project at Greater Noida, Uttar Pradesh;  Integrated Industrial Township Project  in VikramUdyogpuri Near Ujjain in Madhya Pradesh; Activation Area of Dholera Special Investment Region in Gujarat and Phase-I of Shendra Bidkin Industrial Park in Maharashtra are moving  towards implementation.
• Request for Qualification proposal for the empanelment of the EPC Contractors for roads and services for Activation Area of Ahmedabad Dholera Special Investment Region in Gujarat has been floated.
• Final environmental clearance has already been obtained from the Ministry of Environment, Forest and Climate Change for three DMIC Nodes viz.  Manesar Bawal Investment Region in Haryana, Khushkhera Bhiwadi Neemrana Investment Region in Rajasthan and Ahmedabad Dholera Investment Region in Gujarat. 
• Detailed Project Report for Mass Rapid Transit System between Ahmedabad Dholera has been finalized The preparation of Detailed Project Report for the Mass Rapid Transit project between Gurgaon and Bawal is at an advanced stage of finalisation.
• Significant progress has been made in the Model Solar Power Project at Neemrana, Rajasthan which is being implemented as an Indo Japan Partnership Project. The first batch of Solar panels have arrived at the site, EPC contractor has been appointed and the actual commissioning of the project has been initiated.
• Considerable progress has also been made in the Logistic Data Bank Project, which is one of the Smart Community Projects being implemented in partnership with the Government of Japan. Tariff Authority for Major Ports (TAMP) has notified the levy of Mandatory User Charges (MUC) as part of their scale of rates.  The project is being taken forward for the implementation in partnership with NEC Corporation of Japan.

Chennai Bangalore Industrial Corridor (CBIC):

• Perspective plan has been finalized, and three nodes, Tumkur (KN), Ponneri (TN), and Krishnapatnam (AP) have also been identified and finalized.

Vizag Chennai Industrial Corridor (VCIC):

• The Conceptual Development Plan has been finalized, and work on preparation of Regional Perspective Plan (RPP) has been  initiated.
• Four nodes have been finalized and Asian Development Bank has agreed to prepare Master Plans for the two identified nodes viz. Vizag and Yerpedu-Srikalahasti, for which parcels of land have been identified. . 

Bengaluru Mumbai Economic Corridor (BMEC):

• Draft perspective plan has been prepared.

Amritsar Kolkata Industrial Corridor (AKIC):

• DMICDC has been entrusted with the responsibility of preparing feasibility report. 

National Industrial Corridor Development Authority (NICDA)

• National Industrial Corridor Development Authority (NICDA) is being created.

6. Modified Industrial Infrastructure Upgradation Scheme (MIIUS) : ‘In principle’ approval have been accorded for 21 projects involving  central grant of ₹ 550.00 crore under the ‘Modified Industrial Infrastructure Upgradation Scheme (MIIUS)’ .Out of the above projects, 15 State Implementing Agencies have submitted detailed proposals which are being evaluated by National Productivity Council, Project Management Agency(PMA) for granting ‘final approval’.

7.    Important Developments in Industries Administered by DIPP

Leather Sector

• One of the major activities under Indian Leather Development Programme is to provide placement linked skill development training to unemployed youth.
• As against the target set out for 2014-15 to provide training under this programme to 54,000 persons, training has been provided to 92,500 unemployed persons in the current year. During 12^th Plan period, 200503 persons have been trained and 161773 (80%) placed in the Leather Sector.
• Government is taking steps to ramp up this training programme to cover 1,38,000 persons for 2014-15 with mandatory placement of at least 75% by March 2015 and 1,44,000 persons during 2015-16.
• For augmentation of institutional infrastructure, funds have been released for establishment of two new branches of Footwear Design & Development Institute at Banur (Punjab) and Ankleshwar (Gujarat).
• In addition, 194 leather units have been disbursed assistance of ₹ 40 crore for completion of their modernization and technology upgradation.
• Approval has been given for pilot project – Co-digestion of Tannery Solid waste with Biogas Generation in Calcutta Leather Complex (CLC) under Solid Waste Management component of the Leather Technology, Innovation & Environmental Issues sub-scheme of ILDP.

Boiler

• Modified regulations and  several forms to simplify registration of  boilers and to reduce paperwork for boiler manufacturers & users have been undertaken.
• State Governments have been advised to introduce self- certification and third party inspection in Boilers.
• Qualification and experience for Competent Persons have been rationalized to facilitate increase in availability of Competent Persons for third party inspection. This will facilitate both, boiler manufactures as well as boiler users.
• Regulations have been amended to increase time period between   inspections requiring mandatory shut down of the boilers in power plants and continuous process plants which will result in increase in production from these plants.
• Regulations have been framed for prescribing procedure/criteria for approval of boiler/boiler component manufacturers in the country. It will   result in increase in transparency and setting of minimum quality standards for boilers manufacturers.
• Provisions have been made in boiler regulations for on-line submission of applications for registration of boilers and for recognition of Well  Knownfirms to do self-certification of their activities without approaching Inspecting Authorities.
• Time period for evaluation of firms by Evaluation Committee of the Central Boilers Board for recognition of Well Known firms reduced from 120 days to 90 days for manufacturing works in foreign countries and to 60 days for manufacturing works in the country.
• Provision made in boiler regulations for recognition of welders by the third party inspecting authorities which will facilitate boiler and boiler component manufacturers.
• Time period have been prescribed for recognition of qualification of welders  by the Competent Authorities. 

Salt

• Identification of surplus salt land for development of infrastructure facilities for manufacturing sector is being carried out.
• Surplus salt land transferred in ( a)Tamil Nadu : EPL (764.64 acres),  BPCL (100 acres),  NTECL (75.19 acres) and   ETPS (24.81 acres)   for developmental activities on payment of market value of the land, IPAB in Tondiarpet (1.2 acre), (b) Andhra Pradesh : Customs and Central Excise( 0.5 acre), (c) Maharashtra: National Highway Authority of India (23.07 acre).
• The policy for transport of salt by rail was reframed and allocation of wagons to salt manufacturers was streamlined.

Explosives

• It has been decided that no licence under the Industries (Development and Regulation) Act, 1951 will be necessary by mine owners to manufacture Ammonium Nitrate Fuel Oil (ANFO) explosives.  This will help mine owners using ANFO to continue mining operations and will help the development of cement industry as well as the construction sector.
• Tapering of user fee to Licensing Authority (PESO) has been introduced to ensure that explosives manufacturers are required to pay less for production/ storage for increased slabs beyond a ceiling. Licence fees for magazines used for fireworks has been kept less compared to other explosives. Fees for export of explosives and fireworks have been abolished.
• Keeping in view technological developments, the security scenario and demands of the stakeholders, an extensive exercise to review the Rules administered by PESO has been undertaken. 

Development Councils  and Measures for Standardisation

• Development council for the following industries has been constituted for Foundry Industry and Paper Industry.
• The DIPP has taken up the issue of preparation of standards for lead free paints with BIS. In the first phase 9 items relating to different types of paints have been identified in consultation with the Indian Paint Association (IPA). BIS has finalized the standards for these 9 items.

DEPARTMENT OF COMMERCE

I.       WTO matters

• India and USA successfully resolved their differences relating to the issue of Public Stock Holding for Food Security purposes.
• The General Council of WTO also adopted a protocol to make Trade Facilitation Agreement a part of WTO agreement.

II.    Foreign Trade and Foreign Trade Policy

• Intensive discussions underway with Department of Revenue to finalise new Foreign Trade Policy (2014-19).
• For mainstreaming of exports from States a matrix developed and sent to all State Governments.  6 States have finalised export strategy and 3 States have already appointed Export Commissioners.
• Digitisation, simplification, trade facilitation, reduction in transaction costs have been taken up as an ongoing exercise by DGFT to enable online access on trade statistics and facilitation.

III. Bilateral Relations

• ASEAN-INDIA agreements on “Trade in Services and Investment” were signed (except Philippines).

IV.  Special Economic Zones ;

• Service Delivery - Activities related to Developers and Units in SEZs were identified and timelines for completion of the said activities were prescribed and implemented.  Launched on 14.08.2014 in all Zones. 
• Digitization and online processing of various activities relating to SEZ Developers and Units has been introduced in all Zones from 01.11.2014. 

Initiatives For Implementation in next 6-12 months :

• Mixed land use in non-processing areas to be allowed.

V.     Gems and Jewellery Sector

• World Diamond Conference successfully organised.
• Long term procurement agreement between Alroza and Indian Diamond firms for supply of rough diamonds signed.

VI.  Good Governance initiatives: DGFT

• A simplified system for issuance of Importer Exporter Code (IEC) online will become operational w.e.f. Jan 1, 2015.
• A Complaint Resolution System for Resolution of EDI related issues has been set up.

VII.           Achievements related to IT :

• Website and intranet portal of the Department of Commerce revamped, redesigning and improvement of the websites of 33 Export Promotion Councils already taken up.