New industrial policy focuses on making capital available to industry, promoting fintech

Ease of doing business for MSMEs: The Department for Promotion of Industry and Internal Trade (DPIIT) is in the midst of formulating a new industrial policy to make finance available to industry and to promote the Made in India brand, PTI reported citing sources.

For wider access to finance to industry, DPIIT has recommended establishing a development finance institution to provide finance at competitive rates. It also proposed to use certain parts of the foreign exchange reserves for such financing.

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Furthermore, to diversify financing for micro, small and medium enterprises, the draft proposes that MSMEs opt for the corporate bond market and accept intellectual property rights as collateral for loans. The proposals include performance-based loans and incentives for innovation, green growth and the use of fintech.

The draft also recommends supply chain financing and encourages microfinance institutions to form cooperative groups and finance microenterprises at affordable rates.

Other important proposals include the introduction of social security schemes for women workers, and the inclusion of labour-intensive industries under the Production Linked Incentive (PLI) scheme.

In particular, the draft policy has been given to various ministries for feedback.

Referring to the promotional scheme for the Made in India brand, the report citing sources said it could become a platform for manufacturers to showcase local value addition and boost the country’s credibility as a source of quality products.

Along the same lines, the draft proposed to incentivize public procurement to promote the Make in India initiative, create a national digital grid, develop a robust data protection regime, create a technology fund and create a task force to continuously identify skills gaps.

It is important that the implementation of an integrated investment promotion strategy by involving district, state, national and international market synergies has been proposed.

To accelerate innovation, the draft has proposed the creation of innovation zones at urban local bodies and the design of a national capacity development programme. In addition, the draft has emphasized strengthening export financing and export competitiveness.

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The upcoming industrial policy is focused on addressing issues and challenges for the industry and proposing certain policy measures to provide an innovative and competitive industrial ecosystem in the country. For the same, it has identified six objectives – competitiveness and capacity; economic integration and up the global value chain; promote India as an attractive investment destination; to promote innovation and entrepreneurship; and achieve global scale and standards.

In August 2017, DPIIT had presented a draft of the third industrial policy which was to replace the industrial policy from 1991.