Drivers:

1 The Prime Minister had constituted a Group in Jan, 2008 under Chairman, NMCC to look into the reasons behind the sluggish growth of the manufacturing sector and to suggest measures to ensure its sustained high growth. The Group gave its recommendations (PMGR) after holding detailed consultations with the stake holders and after examining of experiences of other countries in the region as also the experiences gained by India over the previous decades.

Directions:

2 The Group submitted its Report in September, 2008 containing recommendations to address these concerns. The Gist of the Recommendations of PMGR is

• Focus on manufacturing as centre stage of development strategies

• Need for a national manufacturing policy. Elements of the manufacturing policy have been highlighted

• Recommendations on a set of horizontal issues-policies relating to tax, export-import, FDI, technology, exchange rate etc.

• Added focus on two sets of industry verticals- employment intensive industries (i.e. Textiles & Garments, Leather and Footwear, IT Hardware & Electronics and Food Processing) and strategically important industries (Aerospace, Shipping, Capital Goods, Solar Energy, IT Hardware & Electronics)

• A mechanism for coordinated action on various policies vis-à-vis agencies that affect manufacturing particularly the macro-economic policies

• Stimulate competitiveness of manufacturing through firm level and Govt. specific challenges. Implementation:

3 Chairman, NMCC has been requested to hold necessary preparatory meetings with the concerned Ministries/Departments and suggest concrete policy measures and steps which can be taken by Government for implementation of the recommendations in a time bond manner

4 Several meetings have been held in NMCC on various sub-sectors relating to manufacturing, it include: Shipping, Aerospace, Technology development, electric vehicles, construction equipments, SEZs, FDI policy, Monetary policy, Machine Tools, Telecom sector, and Acquisition of assets abroad.

ACQUISITION OF RAW MATERIAL ASSETS ABROAD

1 The Prime Ministers Group in its Report has identified that availability of raw material is crucial to achieve robust growth of manufacturing sector over long term. Accordingly, the issues relating to acquisition of raw material assets abroad were discussed in the NMCC with all the stake holders including the public and private sector companies. These included the need for focused attention, removal of procedural hurdles, provision of funds and creation of mechanism to coordinate the activities of different players. Based on the discussions in the NMCC, a draft policy to fast track the acquisition of raw material assets abroad was prepared and was discussed in the PMO and is under advance consideration of the Government. This deals mainly with acquisitions by public sector companies or the joint ventures formed by them either with public or private sector companies.

OUTWARD INVESTMENT BY PRIVATE SECTOR COMPANIES

1 While discussing the strategy for acquisition of raw material assets abroad by Indian companies at the PMO, the NMCC was requested to separately examine and come up with recommendations on various other issues associated with all types of outward investments made by the private sector companies including acquisition of raw material assets.

2 Accordingly, the pre-acquisition, acquisition and post acquisition issues faced by the private sector were discussed at the NMCC with the concerned Ministries/Deptt. and Private Sector. Based on the discussions in the NMCC, a draft policy was prepared containing recommendations to facilitate outward investment by Indian private companies and circulated to the Ministries/Department concerned. Based on the comments received, the revised draft policy was also discussed in a meeting held at the PMO. The said policy is now under active consideration of the Government for taking next steps.

MANUFACTURING OF IT HARDWARE AND TELECOM EQUIPMENTS

1 Manufacturing of IT hardware and telecom equipments is important in view of the large market the country provides and its strategic importance. The bulk of the materials as well as components are being imported at present and the level of value addition in the country is very-very low. A number of meetings were held in the NMCC to identify a few important actions that should be taken up on priority to enable increase of the domestic manufacturing content in IT, electronic hardware and telecom equipment. To deliberate on this issue, Chairman, NMCC and Dr. Sam Pitroda, Adviser to PM on Public Information, Infrastructure and Innovation formed a Committee alongwith the MS NMCC and Secretary(IT) & Secretary(Telecom). The Committee, after considering a paper prepared by the Departments of IT and Telecom, finalized its recommendations which were submitted to the Prime Minister on the 14th September, 2010. These recommendations are under consideration of the Government.

MANUFACTURING OF ELECTRIC CAR

1 The Sub-Group on Technology Development identification of policies for promotion of electric car and hybrid automobiles as one of the priority areas. The issues were discussed at meeting in the NMCC under the Chairmanship of Dr. V. Krishnamurthy with all stakeholders including the industry. It was decided that Joint Secretary, DHI would chair a group and prepare a policy roadmap for further discussions in the NMCC. The roadmap prepared was deliberated in a meeting in the NMCC and DHI was asked to take up the matter for necessary approval to the Cabinet to ensure synergy among various Government Departments which are undertaking initiatives for manufacturing, encouragement of electric and hybrid vehicle and R&D in this field. A nodal body under DHI was proposed to facilitate adoption of the roadmap.

2 Following the discussions, the issues regarding extension of subsidy on two and four wheel electric vehicles to individual owners were referred to DHI and NRE. MNRE have modified the scheme accordingly to extend the subsidy to two, three wheelers and cars also. MNRE have also modified the scheme granting the subsidy to individuals in cases where the domestic value addition is at least 30 per cent.

THE ROADMAP FOR LED MANUFACTURING INCLUDING SPECIFICATIONS, TESTING, INFRASTRUCTURE

1 The Sub-Group on Technology Development identified LED and LED fitting manufacturing as the second major thrust area from energy efficiency as well as technology development angle in order to bring out the policy changes for promoting use of LEDs by the Central Government Departments like Defence, Railways, CPWD and State Governments.

2 Currently, there are no Indian standard specifications for LED and LED fittings. Similarly, no testing facility exists in the country for LED and LED fittings. Because of this large scale substandard LEDs are flooding the market. To look into this a Committee under the Additional Secretary, Ministry of Power was given the task of drawing a roadmap covering various issues to promote LED manufacturing and its usage. The committee gave detailed recommendations which were considered by the Sub-Group. A Centralized Implementation Mechanism (CIM) under the Union Power Secretary has been set up to take up the implementation of recommendations. Draft specifications have already been taken up for approval in the BIS Committee. Setting up of the testing facility in CPRI had been approved and implementation is under way. Modalities for extending the use of LED in the Government Departments and mechanism for bulk buying etc. are being actively considered by the CIM.

SCIENCE COMPENDIUM - POTASH TECHNOLOGY

1 The Sub-Group of Technology Development of the NMCC had pointed out the need to bring out a compilation of all the technology developed in various scientific laboratories of Government so that it would be easier for various agencies to take up commercial development of technology into products. In compliance of this decision DST brought out a Compendium of such Technologies developed in scientific labs of Government Departments.

2 One of the indigenously developed technologies related to manufacture of potash from sea water bittern was identified for up scaling. Currently, the entire potash based fertilizer is imported and there is no domestic source. The price of the internationally procured potash fertilizer is subject to various market pressures including cartel formation in tendering. If domestic production is ensured based on the above technology it would vastly help the country in this very important area of food security. The technology for manufacture of potash developed by CSMCRI has the potential for domestic production of potash based fertilizer. An MOU with Tata Chemicals has been entered into by the CSIR to set up a pilot plant based on CSMCRI technology.

TFC MEMBRANE TECHNOLOGY

1 As a part of the NMCC thrust on indigenous technologies which have the potential to help large masses, the TFC Membrane technology developed by CSMCRI was taken up by the Sub-Group for active consideration. Meetings at various level were held involving DHI, National Textiles Corporation and other likely stakeholders. While the membrane technology has been given with ToT to some private partners, major manufacturing is unlikely since most of the partners are awaiting Government finance to develop a pilot plant.

2 Recently Bharat Pumps & Compressor Ltd. (BPCL) has shown interest in taking up the manufacturing of membrane as well as manufacturing of water equipment in their strategy for diversification. They are considering to take up the manufacturing of TFC membrane. Once they decide a plant is likely to be set up for manufacturing by BPCL with a long term technology partnership with CSMCRI. BPCL have tied up with IRCTC for supplying of Rail Neer processed in such plants. Water being one of the focused areas for future this initiative is useful in the National interest.

MANUFACTURING POLICY

1 One of the key recommendations of the Prime Minister’s Group was that manufacturing should be central to the development strategy and a National Manufacturing Policy should be put in place to give necessary focus to this sector. The report has given details of the content of the policy. Commerce & Industry Minister has also announced that the Government intends to put in place a National Manufacturing Policy. The Department of Industrial Policy & Promotion had hosted a discussion paper on its website in this regard. The NMCC prepared a draft Manufacturing Policy on the basis of the recommendations of the Prime Minister’s Group and sent it to DIPP