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[Revision] GS2 Economy: MAKE in India, Government Policies-

Interventions for Manufacturing, Factories, Labour, Skill
Development
Posted By Mrunal On 21/11/2014 @ 10:12 pm In Mains-2014 | 40 Comments

1. Prologue
2. [Block 1] Policies
1. New Industrial policy 1991
2. National MFG policy 2011
3. National IT policy 2012
4. New Telecom Policy 2012
3. [Block-2] Make in India (MII)
1. Why Make in India?
2. MII: FIVE-mechanism
3. IPR protection (GS3)
4. [Block-3] Labor Factory reforms
1. Why need factory/labour reforms
2. Factory bill 2014
3. Small factories bill 2014
4. Apprentice bill 2014
5. Companies Act 2013
6. Companies Act: 4 statutory bodies
5. [Block-4] Schemes: Skill / Social security
1. Din Dayal Antyodaya
2. Jivan Praman
3. EPFO
4. RSBY revamped (soon)
5. Labour/Skill: Misc.Schemes

Prologue

Like I said in the first revision note: 4-5 points on selected topics. Assumption:
you already have read earlier articles. This is just like minute memory jogging.
GS2: schemes, policies, intervention = fifty dozen schemes. I’m only making
note of things related to manufacturing sector.
Reason: MFG topic too hot given make in India. Even if directly not asked, still
same bullets can be used for poverty, hunger, empowerment related questions
in GS to 3 and essay as ‘fall back line’ when you can’t recall anything else.
Next coming revision note: GS2: IR related Economy- bodies & agreements.
 [Block 1] Policies

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fifty dozen policies but these useful to handle mfg/service sector related Qs.

New Industrial policy 1991

1. ’48: Shyama’s policy; ’56: focus on PSU; 91: Liberated

2. 5 sectors need license: Tobacco, Desi liquor, Industrial explosive, Hazardous
chemicals, Defense electronics.
3. 3 reserved for PSU. Rail, Atomic mineral, Atomic energy.
4. PSU: Disinvestment permitted, MoU for op.flexibility, later various “Ratna”
5. FDI relaxed, 100% NRI investment permitted.
6. Tech parks for Software, electronic, hardware
7. To help M&A- MRTP removed, later CCI setup.

National MFG policy 2011

1. Increase MFG’s share in GDP from present 15% to 25%. [though China 35%]
2. Create 100 million jobs in a decade.
3. MFG focus: employment intensive sectors- Textile, IT; MSME,
4. Simplify labour and environment laws=> Modi: factory, apprentice bills + green
 law panel under TSR Subramanian
5. Skill Development via Polytechs=> Modi skill India, Din Dayal Antyo.
6. Setup Mfg promotion boards, NIMZ (invest & mfg)
7. Infra via PPP=> Modi: REITS, INVITs, 3P-India for contracts
8. Tax relief to startup co.s; skill Development via Polytechs.

National IT policy 2012

1. 1 e-literate person in each household.=> Modi Digital India mission for rural
broadband.
2. 1 crore new IT personnel
3. Public services/softwares in Vernacular, PH friendly, transparency=>Modi E-
kranti system
4. Strong framework against cybercrime
5. Promote Cloud computing, open source software
6. Tax relief to IT startups. (just like mfg policy)
7. Target 2020: 300 billion$ revenue, 200$ exports.
8. Survey Suggestion: separate Department for service sector, divest service-
sector PSU, give collateral free loans to start up cos.

New Telecom Policy 2012

1. 2020: rural teledensity increase to 100 =>USOF Universal service obligation

fund to improve net connection in rural/naxal areas
2. Right to broadband with 2mbps speed=> NFON National optical fiber network
to connect 2.5 lakh Gram Panchayat.
3. Make Mobile a socio-economic empowerment=>UID link with SIM CARD. Future
vision Apple-pay like system, swipe mobile to pay/transfer money. no more
rural branches, BCA-agents.
4. All India mobile no. portability in 2015 (right now only circle wise. Total 22
circles)
5. Unified license for India. (no need to buy separate for each 22 circles)
6. spectrum delinked from license. Have to buy it separately.
7. Allot Spectrum in transparent, market determined price. Simplify M&A in
telecom industry.
8. Make India a global hub for telecom mfg., VoIP, Cloud computing. Modi=>Make
in India.

[Block-2] Make in India (MII)

Why Make in India?

India became Agrarian to => direct service economy. Not much focus on mfg.
sector.
Agro gives 14% to GDP, employs 49% junta= disguised unemployment.
 While MFG gives 15% to Indian GDP and 35% to Chinese.
IF MFG boost=>small farmers can shift to industry. poverty removal, land
consolidation, farm mechanization=high agro output.
3D-Strength = democracy, demographic dividend, demand in huge quantity.

MII: challenges

World economic forum’s Global competitiveness index: 71.

World bank Ease of doing business rank 142. (double of 71)

MII: FIVE-mechanism

Simplify processes: De-licensing and deregulation=> New Factories bill, eBiz

poral to apply online, industrial license valid for 3 years. Special team to guide
first time investor.
Improve infra: New Industrial corridors authority, 3P-India, smart cities-REITs-
INVITs ;Modi to get funds from US, China, Japan; BRICS bank, AIIB
Skilling: Skill India mission, Deen Dayal Antyodaya Yojana,
Focus on 30 mfg. sectors: autoparts, pharma-chemicals, leather-textile,
mining-construction, food-processing-hospitality etc. Here we’ve potential to
become world top-10; potential manpower and demand available.
Open up sectors: FDI in Defense 49% and Railways 100%
Protect IPR (below)

IPR protection (GS3)

Focus on five angles

innovative product / process for industrial use.=> DIPP=>Patent

office.Indian patent offices to connect online with other nations
1.Patent under Madrid Protocol, automated applications and
approvals.=>followup special 301 report revision note for GS2-IR-
Economy.
2.Industrial
registration for 10 years. Renewed again for 5 years.
design
Automated registration of trade marks. Can be renewed for infinite
3.Trademarks
time.
Statutory GI registry body @Chennai. Foreign companies can
4.GI
register GI in India under WTO-TRIPS agreement.
5.Copyright HRD ministry

Side note: to counter us, China too launched “Made in China” scheme to give R&D,
Tax sops to Mfg-Sectors: aviation, bio—medicine production, railway and ships, IT-
electronics

[Block-3] Labor Factory reforms

again fifty dozen topics but these ones helpful for generic questions

Why need factory/labour reforms

44 union + >150 state acts=> conflicts, bribery, inspector raj

Industrial disputes act: >100 workers=need Government permission before
firing => contractual labour without social security benefits (SSB).
Apprentice made to work like regular employee yet no SSB.
Owner can be arrested for petty issues like no spittoon.
Foreigners won’t come to Make In India, unless these issues fixed.

Factory bill 2014

On Narendra Jadav Committee (2010)

Factory def: 20 workers if power used; 40 workers if not.
Women: nightshift with safety-transport provisions; can work on heavy
machinery unless pregnant/PH
Worker: Reforms in Overtime, paid leaves; right to cool drinking water,
 spittoon, restrooms. Canteen depending on (#) of workers.
Owner: self-certification, can decide workweek, can’t be arrested on small
issues like no restroom/cool water.
Benefit: women empowerment, no more bribery inspector raj

Small factories bill 2014

2000: 2nd National labour commission recommends separate law for small
factories.
New bill 2014: for MSME with upto 40 workers.
Women can work on heavy machines.
Small one-room “factories” can’t setup separate washroom, spitton etc. so
they’re allowed to have joint facilities with other small factories.
Self-compliance features similar to (non-small) Factories bill 2014

Apprentice bill 2014

Minimum age 14 years to join non-hazardous industry as an apprentice

Government to decide quota and training syllabus in each industry
Companies can accept non-engineer/diploma; fix workdays; multiple
companies can join to give pre-training.
Post-training a certification exam.
Web portal for self-certification; reasonable fines.
Benefit: flexibility to company, skilled youth to help make in India.

Additional topics:

#1: Modi scheme- Apprentice protstahan yojana: Government will contribute

50% of stipend for first two years of training

#2: Self-compliance/ Self certification: CRITICISM

2013 National crime report: >350 workers died in boiler explosion.

Inspector-raj is necessary. Suppose Defective Boiler & other dangerous
machines. Owner himself won’t work/check. May not hear complaints from
workers & yet upload “everything tested OK” self-certificate on portal. (keep
that in mind for Ethics case studies)

#3: random inspection

Modi reform: labour/factory inspection will be done on random lucky draw by

computers. (to ensure those self-compliance claims are right)
Inspector to upload report within 72 hours. => less opportunities for
manipulation and bribes.

Companies Act 2013

 Replaced ’56
3 types: one person, private (2-200), public ltd. (7-unlimited).
BoD reforms: min.15 directors in public ltd, 1/3rd independence, 1 woman, 1
Indian resident.
Independent directors: performance review by AGM, 10 year term limits.
Whistleblower protection, internal and external audit mechanism, limits on CA
about how many firms they can audit per year.
Quorum requirements for AGM and board meetings
CSR: 2% of last 3 years’ avg.profit. Selected companies only e.g. above 5 crore
net profit /500 cr. Net worth, 1000 crore turnover.

Companies Act: 4 statutory bodies

1. Company law tribunal (NCLT) to reduce burden of HC. Directly approachable, 3

months deadline to solve case. Appeal @NCLAT
2. NFRA: Financial reporting authority. Set accounting standards, power of civil
court, can punish CA and B.Com. ICAR doesn’t like it.
3. Investor edu.+protection authority: financial literacy to prevent Saradha, sahara
scams. Chaired by Secretary of corp.affairs ministry
4. SFIO: given statutory status, power to search-seize, other agencies need to
handover witnesses and evidences.

[Block-4] Schemes: Skill / Social security

Following block covers only labour / skilling related schemes.

I’m not going into all those health-education schemes. You may refer to them
under Ch.13 economic survey summaries under Mrunal.org/economy
Urban infra Development schemes=>under GS3 Economy revision note coming
soon.

Din Dayal Antyodaya

Why?: 57 million worker shortage in 1st world by 2020.

Make in India useless without skilled workers. 10% of new workers skilled.
(China 50%)

Rural component Urban component

SGSY=>NRLM=>Ajeevika=>skill HUPA: train 5 lakh every year

components: Din Dayal Upa. Gramin
Kaushalya Yoj.
15 age+; train 10 lakh youth in next 3
years;
setup training centre; international
syllabus; PH attention
via Livelihood centres via NSDC
Corop.
vendor market training; shelter
for homeless
urban SHG: 10k loan; enterprise
– loan interest subsidy
Jivan Praman

Why? Pensioner need to submit physical life certificate every year- to show he’s
alive and claim pension.
Jivan Praman = Aadhar-based Digital Life Certificate.
DEITY (Dept. of Electro.&IT) designed software.
Software reads pensioner’s Aadhar card, biometric data=> uploaded to
server=> digital life certificate generated.
Pension giving babu can access online and release pension.
Pensioner no need to physically visit office => less inconvenience and bribery
harassment. Dignity to elderly.

EPFO

UAN: Uniform account number for >4 crore subscribers: can view account,
transaction data, grievances redressal. No need to get new number when
changing jobs.
LIN: Labour identification number for ~6 lakh employers. So they can file online
provident contribution, annual returns. Less inspector raj and harassment.
Assured Minimum Rs.1000 pension, compulsory EPS for upto 15k salary.

RSBY revamped (soon)

Rashtriya Swasthya Bima yojana.

Plans to merge Aam Admi Bima Yojana and India Gandhi old age pension with
it
Smart card for unorganized workers.
3rd party audit, call centre for grievances

Labour/Skill: Misc.Schemes
Udaan Skilling J&K youth by MHA+NSDC

Budget 2014.
Employability + entrepreneurial skill. (get job and give job)
SKill Even traditional welder, carpenters, cobblers, masons be given
India training to become suitable to Make in India.(e.g. pepperfry.com
online furniture shopping site- after delivery carpenter assembles at
your home)

Skilling minority artisans

USAAD Kashmiri embroidery, bengali jardosi, sikh phulkari embroidary,
buddhist thangka paintings

Nai
 Manzil Skilling Madressa passouts to join main-stream (computer, english etc)

Varistha
60 and above
pension
From 15th aug. 1 year validity
bima
HR Committee on how to use unclaimed money from post-office, PPF etc.
Khan for elderly welfare.

Next coming revision note: GS2: IR related Economy- bodies & agreements.

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