Performance of the

Department of Industrial Policy and

Promotion
On
Good Governance
2014-15
(April-December)

Table of Contents
1.

Performance of Industrial Sector ............................................................................................ 1

1.1

Introduction .................................................................................................................. 1

1.2

Review of 2014-15 ........................................................................................................ 1

1.2.1 GDP growth ....................................................................................................... 1
1.2.2 Industry Growth ................................................................................................ 2
1.2.3 Use based classification of Index of Industrial Production (IIP)........................ 3
1.2.4 Manufacturing Sector ....................................................................................... 3
1.2.5 Consumption and Investment........................................................................... 4
1.2.6 Foreign Direct investment................................................................................. 4
1.2.7 Inflation ............................................................................................................. 5

2.

Good Governance Measures Taken ........................................................................................ 5

2.1

Ease of Doing Business.................................................................................................. 5

2.2

Make in India................................................................................................................. 7

2.3

National Workshop on Sectoral Perspectives and Initiatives ....................................... 9

2.4

E-Biz Project ................................................................................................................ 10

2.5

Liberalisation in Foreign Direct Investment (FDI) ....................................................... 11

2.6

Facilitation of Intellectual Property Rights (IPR) including Design ............................. 12

2.7

Japan Plus.................................................................................................................... 12

2.8

Industrial Corridors ..................................................................................................... 12

2.8.1 Delhi Mumbai Industrial Corridor (DMIC ) ...................................................... 12
2.8.2 Chennai Bangalore Industrial Corridor (CBIC): ................................................ 13
2.8.3 Vizag Chennai Industrial Corridor (VCIC): ....................................................... 14
2.8.4 Bengaluru Mumbai Economic Corridor (BMEC): ............................................ 14
2.8.5 Amritsar Kolkata Industrial Corridor (AKIC): ................................................... 14
2.8.6 National Industrial Corridor Development Authority (NICDA) ....................... 14
2.8.7 Modified Industrial Infrastructure Upgradation Scheme (MIIUS) .................... 14

3.

4.

Important Developments for good governance in Industries Administered by DIPP .......... 15

3.1

Leather Sector ............................................................................................................. 15

3.2

Boiler ........................................................................................................................... 16

3.2

Salt............................................................................................................................... 17

3.3

Explosives .................................................................................................................... 17

Development Councils and Measures for Standardisation .................................................. 18

1.

Performance of Industrial Sector

1.1

Introduction

After achieving a relatively high growth of more than 8.5% during 2009-10 and 2010-11,
Indian economy has been struggling to maintain five percent Gross Domestic Product
(GDP) growth during 2012-13 and 2013-14. This slowdown was more pronounced in
industry and services sector; in particular, manufacturing sector grew at very low rate.
GDP growth for 2013-14 had recorded merely 4.7%, with manufacturing growth
recording a negative growth of -0.7%.

1.2

Review of 2014-15

1.2.1 GDP growth

The growth of GDP at factor cost (at 2004-05 prices) is estimated at 5.5% during AprilSeptember, 2014 (H1) compared to 4.9% during same last year (Graph-1). This
improvement in the GDP growth is mainly on account of better growth in Industry and
Services sector.
5.6%

5.5%

Graph-1: GDP Growth

5.4%
5.2%
5.0%

4.9%

4.8%
4.6%
2013-14 (H1)

2014-15 (H1)

Note: H1 is first half of financial year (April September)

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1.2.2 Industry Growth

The growth of Industry sector has improved to 3.2% during first half of current financial
year compared to 1.1% in corresponding period of last year (Graph-2). This
improvement in the growth of industry sector is because of improvement in the growth
of its all sub sectors including Manufacturing, Construction, Mining and quarrying and
Electricity etc. (Graph-3)

3.2%

3.5

Graph-2: Industry Sector Growth

3.0
2.5
2.0
1.5

1.1%

1.0
0.5
0.0
2013-14 (H1)

2014-15 (H1)

Graph-3: Growth of Industry Sub-groups

April-September, 2013

April-September, 2014

9.5%

5.8%
4.7%
2%

2.7%

1.8%
0.1%

Mining and quarrying

Manufacturing

Electricity, etc

Construction

-2%

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1.2.3 Use based classification of Index of Industrial Production (IIP)

As per use-based classification of IIP, the growth of Basic Goods, Capital Goods has
increased to 7.6% and 4.8% respectively during April-October, 2014 compared to same
period of last year. However, the growth of Intermediate goods has declined and growth
of Consumer goods is still negative (Graph-4).
Graph-4: Use Based Clasification of Index of Industrial Production (IIP)
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0

7.6%
4.8%
2.7%
1.1%

Basic Good

-0.2%
Capital Good

1.6%

Intermediate Good

Consumer Good
-1.7
-6.3%

April-October, 2013-14

April-October, 2014-15

1.2.4 Manufacturing Sector

The growth of manufacturing sector has improved to 1.8% during first half of the
current financial year compared to almost no growth during this period last year.

2.0

1.8%

Manufacturing Sector Growth

1.5

1.0

0.5

0.1%
0.0
2013-14 (H1)

2014-15 (H1)

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1.2.5 Consumption and Investment

The consumption demand in the economy has increased at higher rate of 5.7% during
first half of current financial year as compared to 4.2% during the same period of last
year as reflected in the growth of Private Final Consumption Expenditure (PFCE).
Similarly, the growth of Gross Fixed Capital Formation (GFCF), which is an indicator of
investment, has improved to 3.4% in 2014-15 as compared to marginal growth during
the corresponding period of last year.
Graph-:Growth of PFCE and GFCE
7.0
5.7%

6.0
5.0

4.2%
3.4%

4.0
3.0
2.0

1.0

0.2%

0.0
PFCE

GFCF
2013-14 (H1)

2014-15 (H1)

1.2.6 Foreign Direct investment

The Foreign Direct Investment (FDI) (equity) inflow into the economy has increased by
about 17 % during first half of the 2014-15 compared to same period in last year.
Further in October 2014 FDI inflow was a robust USD 2.66 Billion.
Graph: FDI (Equity) in USD Million
15000

14691
(Growth = 16.6% )

14500
14000
13500
13000

12595

12500
12000
11500
2013-14 (H1)

2014-15 (H1)

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1.2.7 Inflation
The monthly rate of inflation for All Commodities(Graph 1) based on WPI (Base 2004-05)
plunged from a high of 6.18% in May 2014 to a low of 0.0% in November 2014
(provisional). The inflation has declined in Primary Articles including Food Articles, fuel
and power group and Manufactured Product group.

2.

Good Governance Measures Taken

During 2014-15, several initiatives have been taken to give the necessary thrust to
manufacturing, whose share in the GDP was hovering just around 15% for many years
and whose growth was also not picking up. Major Initiatives have been taken in the last
seven months for improving Ease of Doing Business in India through simplification and
rationalization of the existing rules and introduction of information technology to make
governance more efficient and effective.

2.1

Ease of Doing Business

Major Initiatives have been taken in 2014 for improving Ease of Doing Business in India
through simplification and rationalization of the existing rules and introduction of
information technology to make governance more efficient and effective.

A comparative study of practices followed by the States for grant of clearance and
ensuring compliances were circulated among all the states for peer evaluation and
adoption, and Chief Ministers were requested to partner with DIPP in taking these
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initiatives forward to ease the business regulatory environment in the country.

Other suggestions include filing of returns on-line through a unified form; placing a
check-list of required compliances on Departments web portal; replacing all
registers required to be maintained by the business with a single electronic register;
no inspection without the approval of the Head of the Department; and introducing
a system of self-certification for all non-risk, non-hazardous businesses.

The process of applying for Industrial License (IL) and Industrial Entrepreneur
Memorandum (IEM) has been made online and this service is now available to
entrepreneurs on 24x7 basis at the eBiz website. This had led to ease of filing
applications and online payment of service charges.

A major breakthrough has been pruning the list of Defence industries which require
industrial licensing. Dual use items, having military as well as civilian applications,
unless classified as defence item, will also not require Industrial License from
defence angle. The requirement of affidavit from applicants that they will comply
with the safety & security guidelines/procedures has been dispensed with.

After this simplification, 61 pending applications for Defence Industries have been
disposed of, including granting of 43 licenses, and advising that 18 applications do
not need license.

Initial validity period of Industrial License has been increased to three years from
two years, also, two extensions of two years each in the initial validity of three years
of the Industrial License shall now be allowed up to seven years. This will give
enough time to licensees to procure land and obtain the necessary
clearances/approvals from authorities. Partial commencement of production is now
being treated as commencement of production of all the items included in the
license.

The latest National Industrial Classification Code NIC 2008 has been adopted, which
will allow Indian businesses to be part of globally recognized and accepted
classification that facilitate smooth approvals/registration.

The process of Registration with Employees State Insurance Corporation (ESIC) has
been integrated with eBiz and launched for public on 12th December, 2014.
Integration of 8 more Central Services with e-Biz are at an advanced stage of
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integration. Further, other than the Central Bank of India, e-Biz portal has been
integrated with 4 more banks, Bank of Baroda, Bank of India, Canara Bank and
Punjab National Bank.

A checklist with specific time-lines has been developed for processing all
applications filed by foreign investors in cases relating to Retail/NRI/EoU foreign
investments and placed on the DIPP website.

2.2

Make in India

The Make in India programme has been launched globally on 25 th September 2014
with 25 thrust sectors and a dedicated portal with back end support up to Sectoral and
State levels for facilitation. The initiative was simultaneously launched in the Capital of
all States and in several Indian Embassies/High Commissions. Few other Indian
Embassies have also organized Make in India interactions after the launch.

The Make in India initiative is based on four pillars, which have been identified to give
boost to entrepreneurship in India, not only in manufacturing but also other sectors.
The four pillars are:
(i) New Processes: Make in India recognizes ease of doing business as the single
most important factor to promote entrepreneurship. A number of initiatives have
already been undertaken to ease business environment. The aim is to de-license and
de-regulate the industry during the entire life cycle of a business.
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(ii) New Infrastructure: Availability of modern and facilitating infrastructure is a very

important requirement for the growth of industry. Government intends to develop
industrial corridors and smart cities to provide infrastructure based on state-of-theart technology with modern high-speed communication and integrated logistic
arrangements. Existing infrastructure to be strengthened through up-gradation of
infrastructure in industrial clusters. Innovation and research activities are supported
through fast paced registration system and accordingly infrastructure of Intellectual
Property Rights registration set-up has been upgraded. The requirement of skills for
industry are to be identified and accordingly development of workforce to be taken
up.
(iii) New Sectors: Make in India has identified 25 sectors in manufacturing,
infrastructure and service activities and detailed information is being shared through
interactive web-portal and professionally developed brochures. FDI has been
opened up in Defence Production, Construction and Railway infrastructure in a big
way.
(iv) New Mindset: Industry is accustomed to see
India intends to change this by bringing a
interacts with industry. The Government
development of the country. The approach
regulator.

Government as a regulator. Make in

paradigm shift in how Government
will partner industry in economic
will be that of a facilitator and not

An Investor Facilitation Cell has been created in Invest India to guide, assist and
handhold investors during the entire life-cycle of the business. This Cell will provide
necessary information on vast range of subjects; such as, policies of the Ministries and
State Governments, various incentive schemes and opportunities available, to make it
easy for the investors to make necessary investment decision. Information on 25 sectors
has been put up on Make in Indias web portal (http://www.makeinindia.com) along
with details of FDI Policy, National Manufacturing Policy, Intellectual Property Rights
and Delhi Mumbai Industrial Corridor and other National Industrial Corridors.

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2.3

National Workshop on Sectoral Perspectives and Initiatives

A National Workshop was held on 29th December 2014 with the Central Ministries,
State Governments and the Industry to draw up a Plan of Action in the short and
medium term for creating an enabling framework for stimulating investments in
manufacturing..

The industries that were covered in the Workshop are Chemicals, Oil and Gas, Capital
Goods, Basic Metals comprising steel and aluminium, Cement, Pharmaceuticals,
Biotechnology, Food Processing, Railways, Tourism, Media and Entertainment,
Automobiles and Auto Components, ICTE Manufacturing including electronics and
telecommunication, Aerospace and Defence, Textiles and Apparels, Leather and Leather
Products , Gems and Jewellery, Energy comprising power, coal and new and renewable
energy , Aviation and Shipping , and Micro Small and Medium Enterprises.

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2.4

E-Biz Project

The eBiz project is one of the 31 Mission Mode Projects (MMPs) under the
National e-Governance Plan (NeGP) of Government of India. The project
envisages setting up a G2B portal to serve as a one-stop shop for delivery of
services to the investors and addresses the needs of business and industry from
inception through the entire life cycle of the business. During 2014, a
momentum thrust has been given to integrate the Central services in the e-biz
platform in a time bound manner.

The eBiz platform with 2 DIPP services along with integration with Central Bank
of India payment gateway and electronic Pay and Accounts Office solution were
launched on 20.01.2014. Further, the Employee State Insurance Corporation
(ESIC) service was launched on 12.12.2014.

The Hon'ble Minister of Labour and Employment inaugurating the

ESIC Service in the e-Biz portal

It is expected that 8 more Central Government Services , viz PAN and TAN
services of CBDT, DIN, Name Availability, Certificate of Incorporation and
Certificate of commencement of business Services of Ministry of Corporate
Affairs, Exporter-Importer Code Service of DGFT and Employer Registration
Service of EPFO will be integrated shortly. The initial e-PAO solution is now
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working with Central Bank of India, Canara bank, Bank of Baroda, Bank of India
and Punjab National Bank. E-PAO solution with State Bank of India and its
associate banks are currently under implementation.

2.5

Liberalisation in Foreign Direct Investment (FDI)

During 2014, FDI in Defence Industry has been permitted through the Government
route up to 49%. Also, higher FDI can be allowed on case to case basis. Further,portfolio
investment which was not permitted earlier has now been allowed up to 24% under
automatic route.

Other important changes in the revised policy include doing away of the lock-in
period of three years, mandating that investee company should be structured to
be self-sufficient in areas of product design and development, with full Indian
management and control along with Chief Security Officer being resident Indian
citizen.

Further, FDI in construction, operation and maintenance of identified railway

transport infrastructure up to 100% has been permitted through the automatic
route. In sensitive areas, from security point of view, FDI beyond 49% would be
allowed on a case to case basis.

The norms for FDI in Construction Development Projects (which already

permitted 100% FDI through automatic route) have been further liberalised. The
minimum land area restriction has been removed for serviced plots. In case of
construction-development projects, minimum built up area of 50,000 sq. meter
has now been reduced to floor area of 20,000 sq. meter. Minimum capitalization
has been reduced from US $ 10 million to US $ 5 million. Norms relating to
repatriation of funds or exit from the project have also been liberalized. Investor
can exit after the completion of the project or after development of trunk
infrastructure. Earlier provision to bring in entire FDI within six months of the
commencement of the project has been amended to provide that FDI can be
brought in till the period of 10 years from the commencement of the project or
its completion, whichever is earlier. To encourage investment in affordable
housing, it has been provided that minimum area and capitalization norms will
not apply to the projects committing 30 percent of the total project cost for low
cost affordable housing.
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The Government has also decided to permit FDI up to 100% under the automatic
route both for green field and brown field projects for manufacturing of defined
medical devices, which would not attract conditions specific for pharmaceutical
industry. The definition of medical device for the purpose would be subject to
the amendment in Drugs and Cosmetics Act.

2.6

Facilitation of Intellectual Property Rights (IPR) including Design

During 2014, approval has been given to the plan scheme for Modernization &
Strengthening of Intellectual Property Offices. The scheme aims at reducing
transaction costs, in improving transparency in the functioning of the IP Offices
and in augmenting human resources with a view to enable examination of
applications in a timely manner.

Further during 2014, the National Institute of Design has been declared as the
Institute of National Importance. Four more NID are being set up in Assam,
Andhra Pradesh, Madhya Pradesh and Haryana.

2.7

Japan Plus

DIPP has set up a special management team to facilitate and fast track investment
proposals from Japan. The team known as Japan Plus has been operationalized w.e.f
October 8, 2014.

2.8

Industrial Corridors

2.8.1 Delhi Mumbai Industrial Corridor (DMIC )

The first node/ city level Special Purpose Vehicle ( SPV) under DMIC
Project with the name and title of Aurangabad Industrial Township
Ltd. has been incorporated.

Integrated Industrial Township Project at Greater Noida, Uttar Pradesh;

Integrated Industrial Township Project in Vikram Udyogpuri Near Ujjain
in Madhya Pradesh; Activation Area of Dholera Special Investment Region
in Gujarat and Phase-I of Shendra Bidkin Industrial Park in Maharashtra
are moving towards implementation.
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Request for Qualification proposal for the empanelment of the EPC

Contractors for roads and services for Activation Area of Ahmedabad
Dholera Special Investment Region in Gujarat has been floated.

Final environmental clearance has already been obtained from the

Ministry of Environment, Forest and Climate Change for three DMIC
Nodes viz. Manesar Bawal Investment Region in Haryana, Khushkhera
Bhiwadi Neemrana Investment Region in Rajasthan and Ahmedabad
Dholera Investment Region in Gujarat.

Detailed Project Report for Mass Rapid Transit System between

Ahmedabad Dholera has been finalised The preparation of Detailed
Project Report for the Mass Rapid Transit project between Gurgaon and
Bawal is at an advanced stage of finalisation.

Significant progress has been made in the Model Solar Power Project at
Neemrana, Rajasthan which is being implemented as an Indo Japan
Partnership Project. The first batch of Solar panels have arrived at the
site, EPC contractor has been appointed and the actual commissioning of
the project has been initiated.

Considerable progress has also been made in the Logistic Data Bank
Project, which is one of the Smart Community Projects being
implemented in partnership with the Government of Japan. Tariff
Authority for Major Ports (TAMP) has notified the levy of Mandatory User
Charges (MUC) as part of their scale of rates. The project is being taken
forward for the implementation in partnership with NEC Corporation of
Japan.

2.8.2 Chennai Bangalore Industrial Corridor (CBIC):

Perspective plan has been finalized, and three nodes, Tumkur (KN),
Ponneri (TN), and Krishnapatnam (AP) have also been identified and
finalized.

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2.8.3 Vizag Chennai Industrial Corridor (VCIC):

The Conceptual Development Plan has been finalized, and work on

preparation of Regional Perspective Plan (RPP) has been initiated.

Four nodes have been finalized and Asian Development Bank has agreed
to prepare Master Plans for the two identified nodes viz. Vizag and
Yerpedu-Srikalahasti, for which parcels of land have been identified. .

2.8.4 Bengaluru Mumbai Economic Corridor (BMEC):

Draft perspective plan has been prepared.

2.8.5 Amritsar Kolkata Industrial Corridor (AKIC):

DMICDC has been entrusted with the responsibility of preparing

feasibility report.

2.8.6 National Industrial Corridor Development Authority (NICDA)

National Industrial Corridor Development Authority (NICDA) is being

created.

2.8.7 Modified Industrial Infrastructure Upgradation Scheme (MIIUS)

In principle approval have been accorded for 21 projects involving

central grant of Rs.550.00 crore under the Modified Industrial
Infrastructure Upgradation Scheme (MIIUS) .Out of the above projects,
15 State Implementing Agencies have submitted detailed proposals
which are being evaluated by National Productivity Council, Project
Management Agency(PMA) for granting final approval.

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3.

Important Developments for good governance in Industries

Administered by DIPP
3.1

Leather Sector

One of the major activities under Indian Leather Development

Programme is to provide placement linked skill development training to
unemployed youth.

As against the target set out for 2014-15 to provide training under this
programme to 54,000 persons, training has been provided to 93,105
unemployed persons in the current year. During 12 th Plan period, 183715
persons have been trained and 147730 (80%) placed in the Leather
Sector.

Government is taking steps to ramp up this training programme to cover

1,38,000 persons for 2014-15 with mandatory placement of at least 75%
by March 2015 and 1,44,000 persons during 2015-16.

For augmentation of institutional infrastructure, funds have been

released for establishment of two new branches of Footwear Design &
Development Institute at Banur (Punjab) and Ankleshwar (Gujarat).

In addition, 193 leather units have been disbursed assistance of Rs.40

crore for completion of their modernization and technology upgradation.

Approval has been given for pilot project Co-digestion of Tannery Solid
waste with Biogas Generation in Calcutta Leather Complex (CLC) under
Solid Waste Management component of the Leather Technology,
Innovation & Environmental Issues sub-scheme of ILDP.

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3.2

Boiler

Modified regulations and several forms to simplify registration of boilers

and to reduce paperwork for boiler manufacturers & users have been
undertaken.

State Governments have been advised to introduce self- certification and

third party inspection in Boilers.

Qualification and experience for Competent Persons have been

rationalized to facilitate increase in availability of Competent Persons for
third party inspection. This will facilitate both, boiler manufactures as
well as boiler users.

Regulations have been amended to increase time period between

inspections requiring mandatory shut down of the boilers in power plants
and continuous process plants which will result in increase in production
from these plants.

Regulations have been framed for prescribing procedure/criteria for

approval of boiler/boiler component manufacturers in the country. It will
result in increase in transparency and setting of minimum quality
standards for boilers manufacturers.

Provisions have been made in boiler regulations for on-line submission of

applications for registration of boilers and for recognition of Well Known
firms to do self-certification of their activities without approaching
Inspecting Authorities.

Time period for evaluation of firms by Evaluation Committee of the

Central Boilers Board for recognition of Well Known firms reduced from
120 days to 90 days for manufacturing works in foreign countries and to
60 days for manufacturing works in the country.

Provision made in boiler regulations for recognition of welders by the

third party inspecting authorities which will facilitate boiler and boiler
component manufacturers.
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3.2

3.3

Time period have been prescribed for recognition of qualification of

welders by the Competent Authorities.

Salt

Identification of surplus salt land for development of infrastructure

facilities for manufacturing sector is being carried out.

Surplus salt land transferred in ( a)Tamil Nadu : EPL (764.64 acres), BPCL
(100 acres), NTECL (75.19 acres) and
ETPS (24.81 acres)
for
developmental activities on payment of market value of the land, IPAB in
Tondiarpet (1.2 acre), (b) Andhra Pradesh : Customs and Central Excise (
0.5 acre), (c) Maharashtra: National Highway Authority of India (23.07
acre).

The policy for transport of salt by rail was reframed and allocation of
wagons to salt manufacturers was streamlined.

Explosives

It has been decided that no licence under the Industries (Development

and Regulation) Act, 1951 will be necessary by mine owners to
manufacture Ammonium Nitrate Fuel Oil (ANFO) explosives. This will
help mine owners using ANFO to continue mining operations and will
help the development of cement industry as well as the construction
sector.

Tapering of user fee to Licensing Authority (PESO) has been introduced to

ensure that explosives manufacturers are required to pay less for
production/ storage for increased slabs beyond a ceiling. Licence fees for
magazines used for fireworks has been kept less compared to other
explosives. Fees for export of explosives and fireworks have been
abolished.

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4.

Keeping in view technological developments, the security scenario and

demands of the stakeholders, an extensive exercise to review the Rules
administered by PESO has been undertaken.

Development Councils and Measures for Standardisation

Development Councils for Foundry Industry and Paper Industry have been
constituted.

The DIPP has taken up the issue of preparation of standards for lead free paints
with BIS. In the first phase 9 items relating to different types of paints have been
identified in consultation with the Indian Paint Association (IPA). BIS has finalized
the standards for these 9 items.

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