NEW DELHI: The government's ambitious manufacturing thrust has run into trouble even before it could take off with many states expressing difficulty in acquiring the vast tracts of land needed to set up dedicated zones.
Five states have written to the Department of Industrial Policy and Promotion, requesting it to consider revising the minimum land requirement (from existing 5,000 hectare) for developing National Manufacturing Investment Zones (NMIZs).
These include Assam, Manipur and Meghalaya in the north-east, Punjab and Himachal Pradesh. "Some states in north and north-east have expressed their inability to set up NMIZs as it would involve either acquiring huge agricultural land or hilly terrain interspersed with valleys and plains," a senior government official in Planning Commission told ET.
Confirming the development, senior DIPP official said that Punjab and some hilly states have a problem in meeting the minimum land requirement of 5,000 hectare for NMIZs. However, the official was quick to clarify that the government is no mood to reduce the minimum land requirement for NMIZs.
"Government is not reducing the minimum area size for NMIZs. Instead, these states can develop clusters and avail almost all the benefits of national manufacturing policy (NMP) on their clusters," DIPP official told ET.
The national manufacturing policy (NMP), which was notified in 2011, had said that while NIMZs are an important instrumentality, the proposals contained in the policy apply to manufacturing industry throughout the country including wherever industry is able to organize itself into clusters and adopt a model of self-regulation as enunciated.
According to the planning commission official quoted earlier, government is not thinking of reducing the land size for NMIZs as it did for special economic zones as the NMP is relatively new and any reversal in policy at this point of time will hit the investor sentiments. Last month, government had reduced by half the minimum land required for setting up of SEZs after investments had virtually stagnated in these export zones over the last two years.
However, this change in policy for SEZs came in after several years of the
SEZ Act being notified in 2005. Centre had so far granted in-principle approval to four NMIZs, one each in Maharashtra, Karnataka and two in Andhra Pradesh.The objective of NMP is to increase the share of manufacturing to GDP from the existing 15% to 25% by 2025 and create 100 million jobs. This would be done by setting up Greenfield integrated townships or NMIZs with a minimum area of 5,000 hectare.
Source : economictimes.indiatimes.com