The draft of the Industrial Policy 2012 has outlined an array of measures to improve the industrial climate by simplifying procedures and regulations, rolling out incentives to existing and potential new investors, renewing focus on the manufacturing sector and improving infrastructure facility in industrial estates.

Overall, the policy aims at achieving seven per cent industrial growth with the manufacturing sector contributing 60 per cent of the Gross State Domestic Product.

The 37-page draft policy, which has been posted on the government website for comments, recommends simplification of cumbersome procedures and compliance burden for getting clearances, particularly for establishing new industries. Advocating the need for imposing regulation by industries themselves, the draft report points out that since the concept of self-regulation cannot be made in one go, steps should be taken in that direction gradually.

The draft report suggests that while processing an application for setting up industries, clarifications by line departments should be sought within five working days upon its receipt. The second and last clarifications could be sought in rare cases within five working days of getting the first clarification. Licences and clearance must be issued or denied by the departments concerned strictly within the specified time period.

The Director of Industries and Commerce would appoint one of its staffers as a Nodal Officer to pursue clearances from all line departments in a time-bound manner with respect to medium and large enterprises. Site clearance would not be necessary in case the industry is to be set in a zone notified by the Town and Country Planning. It has also recommended amendments to Municipal Acts to empower the commissioner of local bodies to issue permission as well as licence to the effect that approval of the council is not required.

The draft recommends rolling out a slew of incentives, such as providing capital investment subsidy for entrepreneurs belonging to Scheduled Caste, Scheduled Tribe , women entrepreneurs, rent subsidy for the same category, infrastructure subsidy, generator subsidy, subsidy to procure pollution-control equipment, stamp duty exemption for purchase of land to set up units by women entrepreneurs and incentive to the MSME sector.

The draft report also advocates setting up of a committee under the chairmanship of the Secretary to Government (Industries and Commerce) with representatives of banks, financial institutions and industrial bodies.

The committee would play the role of facilitator with a scheme of financial assistance to revive sick units. The draft report also suggested incentives in the form of subsidy to sick units.

Evaluating the Industrial Policy of 1997, the draft report notes that though there was rapid growth during the operational period of the policy, there was a brief lull in industrial activity after 2002 owing to withdrawal of tax concessions and downturn in the economy nation-wide. However, industrial growth had recovered in the last two years and the sector had witnessed a growth of 3.3 per cent. As a result, the contribution of manufacturing sector to the GSDP increased from 48 per cent in 2002-07 to 50 per cent in 2009-10.