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    Policy initiatives to shape India into global manufacturing hub

    Synopsis

    The PM Gati Shakti - National Master Plan (NMP) which brings together 16 ministries to enable integrated planning and coordinated implementation of infrastructural connectivity, is expected to lower logistics costs significantly. The corporate tax rate for new manufacturing has been reduced to 15%.

    GovtAgencies
    The government has unveiled a $27 billion worth of PLI scheme for 13 sectors to help integrate Indian companies into the global value chains and tap into the opportunity.
    Disruption in the global supply chain has opened up opportunities for large-scale manufacturing in India, aided by significant policy initiatives such as production-linked-incentive (PLI) schemes and low corporate tax rates for new manufacturing, among others.

    Structural issues like cost of land and electricity, lack of adequate infrastructure and shortage of skilled manpower could play the spoilsport if not addressed on time, says industry.

    "MNCs that manage supply networks have acknowledged the necessity to hedge against future events and have decided to geographically disperse their supply chains. As a result, India has reaped significant benefits," NITI Aayog CEO Amitabh Kant said.

    The government has unveiled a $27 billion worth of PLI scheme for 13 sectors to help integrate Indian companies into the global value chains and tap into the opportunity. The PM Gati Shakti - National Master Plan (NMP) which brings together 16 ministries to enable integrated planning and coordinated implementation of infrastructural connectivity, is expected to lower logistics costs significantly. The corporate tax rate for new manufacturing has been reduced to 15%.

    "There couldn't have been a better time for the government to announce various schemes which will act as enablers to create a viable eco-system for companies to invest in advanced technologies in India," Rajesh Menon, director-general of the Society of Indian Automobile Manufacturers said. "Auto industry in India is also poised to become a major player in the global supply chain and these schemes would provide the necessary impetus in this regard," Menon added.

    The MSME sector has also gained in strength and seems in a position to support big investment. "MSMEs have seen a remarkable improvement in access to finance and power and significant improvement in ease of doing business with introduction of GST," Anil Bhardwaj, secretary-general of the Federation of Indian Micro and Small & Medium Enterprises said.

    aiming highAgencies

    Vikram Kirloskar, chairman (manufacturing council), the Confederation of Indian Industry, feels it is time for the industry to step up. "Government measures can give you added incentive but it is upon manufacturers to improve upon scale and quality."

    The government and businesses see the opportunity but acknowledge the need for improvement in the enabling framework. "In the medium term to long term, India will have to address its structural issues," Kant said. In the short term, he believes it is extremely important to enhance ease of doing business in manufacturing.
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    The Economic Times

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