Editorial
New industrial policy
Evolve mechanisms for implementation
The just-released cabinet approved draft industrial policy sounds unconventional and ambitious going by past standards. It seems to have been formulated with a populist overtone but it postulates a well-defined set of goals, some of the key elements emphasizing expanded public sector role to be complemented, it is envisaged, by public private partnership. The PPP is still in an embryonic state, though.
The draft industrial policy which will be tabled before the parliament in the form of a bill, sets itself the onerous task of raising the industrial sector's contribution to GDP from the current 28 percent to 42 percent. It appears that the idea is to turn the industrial sector into a major instrument of economic growth. Therefore, a plethora of wide-ranging thrust sectors has been selected, as many as 21 in number, for priority attention. One wonders, if the list is not unwieldy. The focal points need to be determined.
However, the emphasis on agro-based food processing industry, human resource export, shipbuilding, solar power, ICT products and services, tourism, light engineering industry, home textiles and handicraft, readymade garments, herbal medicine, energy efficient appliances is well-taken. Prioritisation of export and import-substitution industries and some non-traditional segments is laudable, only that it requires an extraordinary level of inter-ministerial coordination.
Notably, the principle of divesting loss-making state-owned enterprises (SOEs) outright has been discarded in favour of making these competitive and profitable, a tall order for the conventional management resources. The astronomical loan default on the part of the SOEs cannot be lost sight of as this has been a huge drain on the national exchequer. It is understood that a legal framework will be provided for the operation of the sick industry which, among other things, will stipulate alternative employment for those to be retrenched. This should be linked to retraining of the workers so that they fitted into the requirements of a new order.
Basically, the emphasis laid on SMEs with a redefinition of micro industries enabling them to avail of the facilities catering for their special needs and problems is welcome. So is the idea of setting up separate economic zones for highly potential industry like pharmaceuticals. But in the ultimate analysis its success will depend on evolving mechanisms for the policy's implementation.
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