New industrial policy focuses on making capital accessible to the industry, promote fintech
Ease of Doing Business for MSMEs: The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry is amidst framing a new industrial policy for making finance accessible to industry and for marketing the Made in India brand, reported PTI citing sources.
For wider access of finance to the industry, DPIIT has recommended establishing a development finance institution to provide finance at competitive rates. It also proposed using certain parts of foreign exchange reserves for such funding.
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Further, to diversify financing for micro, small and medium enterprises, the draft suggests MSMEs to choose the corporate bond market and accept intellectual property rights as collaterals for loans. The suggestions include providing performance-based loans and incentives for innovation, green growth and leveraging fintech.
The draft also recommends supply chain financing and encourages microfinance institutions to form cooperative groups and finance micro-enterprises at affordable rates.
Other important suggestions include introducing social security schemes for women workers, and inclusion of labour-intensive industries under the production-linked incentive (PLI) scheme.
Notably, the draft on the policy has been given to different ministries for their feedback.
Referring to the promotional scheme for the Made in India brand, the report citing sources said that it may become a platform for manufacturers to showcase local value addition and increase the country’s credibility as a source of quality products.
On the same lines, the draft proposed incentivising public procurement to promote Make in India initiative, creating a national digital grid, developing a robust data protection regime, setting up of a technology fund, and creating a task force to continuously identify skill gaps.
Importantly, 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 suggested setting up of innovation zones at urban local bodies and the formulation of a national capacity development programme. Moreover, the draft has laid stress on strengthening export financing as well as export competitiveness.
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The upcoming industrial policy is focused on addressing issues and challenges of industry and suggest certain policy measures to provide an innovative and competitive industrial ecosystem in the country. For the same, it has identified six objectives – competitiveness and capability; economic integration and moving up the global value chain; promoting India as an attractive investment destination; nurturing innovation and entrepreneurship; and achieving global scale, and standards.
DPIIT in August 2017 had floated a draft for the third industrial policy which would replace the industrial policy of 1991.
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