It is time for India to shift from a flourishing service economy to a manufacturing economy which is one of the most viable solutions to deal with the menace of fiscal deficit, rising unemployment and to climb up the ladder in the global economy.
This article is not an insight into complex economic nuances and analysis, since I am no economist, rather it is only a broad checklist which is ensuing out of the day to day difficulties experienced by investors in setting up industries across the length and breadth of the country.
This blog is also in the wake of the discussion the Government of India recently had to lay down a road map to woo foreign investors in India.
- ‘Single Window Clearances’ has proved to be more of a fascination than reality for over two decades now. It is time to look beyond and further, with legislations/notifications/circulars etc. in place to minutely deal with the points in a manner so that the circle stands complete without any inkling of elasticity exposing towards short comings.
- This is no doubt the time to reload a ‘Version 2020’ of the model much preached less practiced — the ‘SEZ model’.
- Manufacturing hubs are to be created across the nation by creating SEZs for industries while factoring in the geopolitical scenarios, local/natural resources, transportation facilities including waterways and the available skill sets/ know-how available in the respective states.
- For implementation of the same, including Single Window Clearance, a dedicated Ministry is to be created at the Centre’s level which shall be instrumental in notifying the SEZ area, facilitate the instrumental coordination between the Centre and state governments. All clearances, be it Central, State and Municipal/ Panchayat level compliances shall have to be accorded through this mechanism. Legislation has to be made to this effect by the Parliament so that a change of government at the Centre or the state would not come in the way of such mechanism. Apart from a decision with regard to ensuring tax benefit etc. this SEZ model shall have to have industry hubs with forward and backward integration, in an environmentally benign manner. The ecological responsiveness of each and every industry has to be scrutinized at the very inception, at the time of taking decision about the kind of industry and the technology going to be utilized by the industry. The SEZs have to be energy efficient with dedicated distribution of electricity either through franchise model or by declaring such SEZs as distribution area of a designated distribution licensee.
- The industries shall also have to develop integrated industrial/ municipal waste management facilities at the very outset rather than waking up to the occasion when the waste becomes alarming and hazardous to human safety and health.
- The identification and allocation of land happens to be an impediment in our country. To the extent possible, private land, agricultural land and other sensitive zones are to be avoided. The notification of SEZ shall follow the acquisition of land by the nodal agency created under the dedicated Ministry. Land banks are to be identified, since there have been instances in the past wherein big foreign investors could not kick start their businesses due to failure of the respective state governments to ensure smooth and peaceful handing over of the land.
- Modification is required under the Rehabilitation and Resettlement (R&R) policy which would be less burdensome for the investors and more practically doable.
- Revitalization of the vocational training institutes in the country which would support employment of semi-skilled and skilled working class.
In the above checklist, each and every bullet point is amenable to detailed discussions and brain storming to execute them into action. Losing this opportunity would be a failure of the economic mandate and the inability of India to introduce to the world a second large-scale manufacuring hub in Asia, which happens to be the need of the hour as well as the calling by the West and the Far East.
Advocate Matrugupta Mishra is Partner at New Delhi-based Praxis Counsel that specialises in infrastructure-related litigation and arbitration matters.