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Performance of theDepartment of Industrial Policy and

Promotion

On

Good Governance

2014-15

(April-December)

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3. Important Developments for good governance in Industries Administered by DIPP .......... 15

3.1 Leather Sector ............................................................................................................. 15

3.2 Boiler ........................................................................................................................... 16

3.2 Salt............................................................................................................................... 17

3.3 Explosives .................................................................................................................... 17

4. Development Councils and Measures for Standardisation .................................................. 18

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1.2.2 Industry Growth

The growth of Industry sector has improved to 3.2% during first half of current financial

year compared to 1.1% in corresponding period of last year (Graph-2). This

improvement in the growth of industry sector is because of improvement in the growth

of its all sub sectors including Manufacturing, Construction, Mining and quarrying and

Electricity etc. (Graph-3)

1.1%

3.2%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2013-14 (H1) 2014-15 (H1)

Graph-2: Industry Sector Growth

-2%

0.1%

5.8%

2.7%2% 1.8%

9.5%

4.7%

Mining and quarrying Manufacturing Electricity, etc Construction

Graph-3: Growth of Industry Sub-groups

April-September, 2013 April-September, 2014

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1.2.3 Use based classification of Index of Industrial Production (IIP)

As per use-based classification of IIP, the growth of Basic Goods, Capital Goods has

increased to 7.6% and 4.8% respectively during April-October, 2014 compared to same

period of last year. However, the growth of Intermediate goods has declined and growth

of Consumer goods is still negative (Graph-4).

1.2.4 Manufacturing Sector

The growth of manufacturing sector has improved to 1.8% during first half of the

current financial year compared to almost no growth during this period last year.

1.1%

-0.2%

2.7%

-1.7

7.6%

4.8%

1.6%

-6.3%-8.0

-6.0-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Basic Good Capital Good Intermediate Good Consumer Good

Graph-4: Use Based Clasification of Index of Industrial Production (IIP)

April-October, 2013-14 April-October, 2014-15

0.1%

1.8%

0.0

0.5

1.0

1.5

2.0

2013-14 (H1) 2014-15 (H1)

Manufacturing Sector Growth

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1.2.5 Consumption and Investment

The consumption demand in the economy has increased at higher rate of 5.7% during

first half of current financial year as compared to 4.2% during the same period of last

year as reflected in the growth of Private Final Consumption Expenditure (PFCE).

Similarly, the growth of Gross Fixed Capital Formation (GFCF), which is an indicator of

investment, has improved to 3.4% in 2014-15 as compared to marginal growth during

the corresponding period of last year.

1.2.6 Foreign Direct investment

The Foreign Direct Investment (FDI) (equity) inflow into the economy has increased by

about 17 % during first half of the 2014-15 compared to same period in last year.

Further in October 2014 FDI inflow was a robust USD 2.66 Billion.

4.2%

0.2%

5.7%

3.4%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

PFCE GFCF

Graph-:Growth of PFCE and GFCE

2013-14 (H1) 2014-15 (H1)

12595

14691

(Growth = 16.6% )

11500

12000

12500

13000

13500

14000

14500

15000

2013-14 (H1) 2014-15 (H1)

Graph: FDI (Equity) in USD Million

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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 Departments 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 introducinga 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, 61pending applications for Defence Industries have been

disposed of, including granting of 43 licenses, and advising that 18applications do

not need license.

Initial validity period of Industrial License has been increased to three years fromtwo 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

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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 allapplications filed by foreign investors in cases relating to Retail/NRI/EoU foreign

investments and placed on the DIPP website.

2.2 Make in India

The Make in India programme has been launched globally on 25th

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 IndianEmbassies 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 g ive

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.

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(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 logisticarrangements. Existing infrastructure to be strengthened through up-gradation 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 Indias 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.

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2.3 National Workshop on Sectoral Perspectives and Initiatives

A National Workshop was held on 29th December 2014 with the Central Ministries,

State Governments and the Industry to draw up a Plan of Action in the short and

medium term for creating an enabling framework for stimulating investments in

manufacturing..

The industries that were covered in the Workshop are Chemicals, Oil and Gas, Capital

Goods, Basic Metals comprising steel and aluminium, Cement, Pharmaceuticals,

Biotechnology, Food Processing, Railways, Tourism, Media and Entertainment,

Automobiles and Auto Components, ICTE Manufacturing including electronics and

telecommunication, Aerospace and Defence, Textiles and Apparels, Leather and LeatherProducts , Gems and Jewellery, Energy comprising power, coal and new and renewable

energy , Aviation and Shipping , and Micro Small and Medium Enterprises.

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2.4 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.

The Hon'ble Minister of Labour and Employment inaugurating the

ESIC Service in the e-Biz portal

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

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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.

2.5 Liberalisation in Foreign Direct Investment (FDI)

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 infrastructureup 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.

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.

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The Government has also decided to permit FDI up to 100% under the automatic

route both for green field and brown field projects formanufacturing of defined

medical devices, which would not attract conditions specific for pharmaceutical

industry. The definition of medical device for the purpose would be subject tothe amendment in Drugs and Cosmetics Act.

2.6 Facilitation of Intellectual Property Rights (IPR) including Design

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.

2.7 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.

2.8 Industrial Corridors

2.8.1 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 Vikram Udyogpuri 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.

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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 finalised 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.

2.8.2 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.

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3. Important Developments for good governance in Industries

Administered by DIPP

3.1 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 93,105

unemployed persons in the current year. During 12th

Plan period, 183715

persons have been trained and 147730 (80%) placed in the LeatherSector.

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, 193 leather units have been disbursed assistance of Rs.40

crore for completion of their modernization and technology up-

gradation.

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.

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3.2 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 Known

firms 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.

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Time period have been prescribed for recognition of qualification of

welders by the Competent Authorities.

3.2 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.

3.3 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.

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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.

4. Development Councils and Measures for Standardisation

Development Councils for Foundry Industry and Paper Industry have been

constituted.

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.