New Industrial Policy

New Industrial Policy

News: The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, is working on a new industrial policy.
• This will be the third industrial policy (after 1956 and 1991), which is likely to replace the 1991 policy, which was prepared against the backdrop of the balance of payment crisis.
• The draft policy, made by the DPIIT, also proposes to create a Universal Enterprise ID for micro, small and medium enterprises (MSMEs) to strengthen their credit rating mechanism and MSME cluster financing models, as it aims to showcase India as an attractive investment destination.

Key Proposals:
• It seeks to achieve - One Nation-One Standard, Promote startups in every district, Create startup innovation zones at the level of urban local bodies, Formulation of a national capacity development program, and Incentivize Indian specialty products by creating premium international brands.
• To increase financing sources, promote the Made in India brand, enhance local value addition and the country’s credibility as a source of quality products.
• It has suggested various ways for wider access to finance for the industry such as setting up – A development finance institution to provide finance at competitive rates and Considering using some part of forex reserves for such funding.
• An integrated investment promotion strategy involving district, state, national and international market synergies.
• Creating a national digital grid, developing a robust data protection regime, setting up a technology fund, and creating a task force to continuously identify skill gaps.
• Strengthening of the export finance systems for enhancing export competitiveness.
• Additionally, it intends on providing performance based loans and incentives for innovation and green growth, leverage fintech and encourage MSME’s to opt for corporate bond market. 
• Accepting intellectual property rights as collaterals for loans, enabling supply chain financing, Encouraging microfinance institutions to form cooperative groups and finance micro-enterprises at affordable rates.
• Rolling out social security schemes for women workers and Inclusion of labor-intensive industries under the production-linked incentive scheme.