India approved a national manufacturing policy that aims to create 100 million jobs in the next 10 years, Trade Minister Anand Sharma said in New Delhi.
The policy aims to create industrial enclaves that will offer lower taxes, faster permits and easier labor laws to boost the share of manufacturing in Asia’s fastest-growing major economy after China. India will help set up seven such zones initially, including two in the western state of Maharashtra, the minister said.
“The idea is to raise the share of manufacturing to 25 percent by 2022 and create jobs,” Sharma told reporters after a cabinet meeting today. “The government recognizes that the manufacturing sector has a multiplier effect in creation of two to three additional jobs in allied sectors.”
The policy is an attempt by Prime Minister Manmohan Singh’s government to create jobs for the 130 million people expected to join the workforce in the next decade and boost growth to 9 percent. Manufactured products, including cars, televisions and clothing, contributed 16 percent of India’s gross domestic product in 2009, compared with 42 percent in China, data from the United Nations show.
Factory output in India has slowed after the central bank embarked on a record round of interest rate increases to control prices. The Reserve Bank of India raised the benchmark repurchase rate by 25 basis points today, the 13th time it has raised rates since the start of 2010.
Manufacturing grew at the slowest pace in 2 1/2 years in September, according to the Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics.
Sharma said the new manufacturing zones will have a minimum size of 5,000 hectares (12,355 acres) and ensure workers’ interests by setting up a fund to compensate them if they are laid off. State governments will identify the land and own a stake in the enclave, he said. Source:Bloomberg