Course Outline:

Industrial & Environmental

Legislations
Industrial Policy and Industrial Act, Registration of an
industrial unit under Industrial Act, various approvals
required for setting up an industrial unit, Gujarat
Industrial policy & Incentive schemes(for individual
unit, CETP/TSDF, clusters etc), SEZ Act and policy,
CRZ, International conferences and Constitutional
provisions, Water Act, Air Act, Environment
Protection Act, Case studies, Environment Clearance,
Hazardous Waste Management Rules, Plastic Rules,
Noise Rules etc, Green/Red/Orange Industries, NOC
exempted units, Legislation on Industrial Health and
Safety.
 Presentation
on
Industrial Policy & Act

Neeru Bansal
08 Jan , 09
 Introduction : Industrial Units

Industrial Units are of 2 types

 Manufacturing units
Manufacturing any of the products.

 Service Sector: encompasses all industries except those

in the goods-producing sector like agriculture, mining,
construction and manufacturing. Services include
transportation, communication, public utilities, wholesale
and retail trade, finance, insurance, real estate, other
personal and business services.
 Introduction : Industrial Units

Ancillary industrial Unit

An industrial undertaking engaged in

(i) manufacture of parts, components, sub-assemblies, tooling

or intermediates;

(ii) rendering of services, or supplying or rendering, not more

than fifty per cent of its production or its total services, as the
case may be, to other units for production of other articles.

Factory:

means any premises where manufacturing process is being

carried on with the aid of power, provided that fifty or more
workers are working without the aid of power, provided that one
hundred or more workers are working
 Introduction : Industrial Units

National Industrial Classification:

 This is Harmonized Commodity description and Coding system

 A standard industrial classification is essential for developing a

proper statistical system.

 It covers all sectors like agriculture, mining, manufacturing

and service.

 It facilitates the use of data for national economic policy and

for international comparisons .
 e.g.260 Manufacture of knitted or crocheted textile products
 Industrial Units : Classification

Plant & Machinery Equipment

(Service)

 Micro < Rs. 25 lac < Rs. 10 lac

 Small Rs. 25 lac - Rs. 5 cr. Rs. 10 lac - Rs. 2 cr.

 Medium Rs. 5 cr.- Rs. 10 cr. Rs. 2 cr.- Rs. 5 cr.

 Large Scale Unit Manufacturing units having investment

of 10 crs and service sector having investment above 5 crs
are known as large scale units.
 Industrial Units : Parks
Industrial Park :
 Industrial Park is an estate which is developed primarily for
establishment of industrial units (manufacture /service)

 having basic infrastructure facilities like developed plot,

internal roads, water distribution facilities, sewage, power
distribution, communication facilities and such other
facilities/services as may be required.

 and must have provision for the location of minimum 30

industrial/service units.

Mini Industrial Park:

 Mini Industrial Park is a Park having facilities as defined
above.

 However, it must locate minimum 11 industrial

units/service units.
 Industrial Units : Parks

Hi-tech Park:

 Hi-tech Park is an industrial park for specific activities like

 Bio-technology

 Pharmaceuticals and clinical testing

 Information Technology
 Industrial Units : Parks

Export Park:

 Export Park is an industrial park as defined above

and developed specifically for

 promoting export oriented units as approved by

Government of India under EOU scheme.

 In addition, the park must have specific facilities

towards export promotion and export marketing.
 Industrial Act : 1951
An Act to provide for Development & Regulation of industries

Prior to 1991 : Licence Raj

 No person or authority other than Central Govt., could establish

any new industrial undertaking, except under and in accordance
with a licence issued in that behalf by the Central Govt.

 Provided that a Government other than Central Government

may, with the previous permission of the Central Government,
establish a new industrial undertaking.

 A licence or permission will specify conditions as to the location

of the undertaking and minimum standards in respect of size to
be provided therein as the Central Govt. may deem fit to
impose.

 Even for adding a new product or enhancing production

capacity, amendment in the license was required.
 Industrial Act : Post 1991
Major changes in the industrial policy took place like

 Deregulating Indian industry;

 Allowing the industry freedom and flexibility in responding

to market forces and

 Providing a policy regime that facilitates and fosters growth

of Indian industry.

New Mantra

Liberlization : Privatization : Globalization

 Industrial Policy : Post 1991
Objectives of changes in Industrial Policy were –

 to maintain a sustained growth in productivity;

 to enhance gainful employment;

 to achieve optimal utilization of human resources;

 to attain international competitiveness and

 to transform India into a major partner and player in the

global arena.
 Industrial Policy : Post 1991

Liberalization of Industrial Licensing Policy

Presently only 6 industries are under compulsory licensing

mainly on account of environmental, safety & strategic
considerations.

Similarly, only 3 industries reserved for the public sector.

 List of industries under
compulsory licensing

1. Distillation and brewing of alcoholic drinks.

2. Cigars, cigarettes of tobacco & tobacco substitutes.

3. Electronic Aerospace and defence equipment: all types.

4. Industrial explosives including detonating fuses, safety

fuses, gun powder etc.

5. Hazardous chemicals.

6. Drugs and Pharmaceuticals (according to modified Drug

Policy issued in September, 1994).
 Industrial Policy : Post 1991

List of industries reserved for Public Sector

 Atomic energy.

 Substances specified in the scheduled to the notification of

the Government of India in the Department of Atomic
Energy number S.O.212(E), dated the 15th March, 1995.

 Railway Transport
 Industrial Policy : Post 1991
Simplification of Procedures

 Introduction of Industrial Entrepreneurs' Memorandum

(IEM)

Large Scale Industries not requiring compulsory licensing

are to file an IEM to the Secretariat for Industrial
Assistance (SIA).

No industrial approval is required for such exempted

industries. Amendments are also allowed to IEM proposals
filed after 1.7.1998.

 Registration of Cottage/small/Medium Industries:

These are now required to be registered with the District

Industries centre of the State Government. (FORM DIC)
 Industrial Policy : Post 1991 :
Simplification of Procedures
Policy for Small Scale Industries

 Encourage small scale sector in areas where there is techno-

economic justification for such an approach.

 Reservation / de-reservation of products is examined on a

continual basis by an Advisory Committee.

 Currently 749 items are reserved for SSIs.

 All undertakings other than SSI engaged in manufacture of items

reserved for SSI are required to obtain industrial licence and also
undertake export obligation of 50% of annual production.

 This condition of licensing is not applicable for 100% EOUs,

Export Processing Zone (EPZ) or SEZs.

 In addition, if equity holding from another company exceeds 24

% in the SSI, the unit loses its small scale status.
 Industrial Policy : Post 1991 :
Simplification of Procedures
 Non-Resident Indians Scheme

General policy and facilities for Foreign Direct Investment as

available to foreign investors/company are fully applicable to
NRIs as well.

In addition, Govt. has extended some concessions specially for

NRIs & overseas corporate bodies having more than 60% stake
by NRIs.

These inter- alia includes (i) NRI/OCB investment in the real

estate and housing sectors upto 100% and (ii) NRI/OCB
investment in domestic airlines sector upto 100%.
NRI/OCBs are also allowed to invest upto 100% equity on non-
repatriation basis in all activities except for a small negative list.

Apart from this, NRI/OCBs are also allowed to invest on

repatriation/non-repatriation under the portfolio investment
scheme.
 Industrial Policy : Post 1991 :
Simplification of Procedures

Policy for Foreign Direct Investment (FDI)

 Liberal & transparent foreign investment regime in place with

most activities are opened to foreign investment on automatic
route without any limit on the extent of foreign ownership.

 Some of the recent initiatives taken to further liberalize the FDI

regime include opening up of sectors such as Insurance (upto
26%); development of integrated townships (upto 100%);
defence industry (upto 26%); tea plantation (upto 100%) etc.

 The investment facilitation measures has been strengthened

through Foreign Investment Implementation Authority.
 Industrial Policy : Post 1991 :
Simplification of Procedures
Electronic Hardware Technology Park (EHTP)/ Software
Technology Park (STP) scheme:

 This scheme is aimed at building up strong electronics industry

and with a view to enhancing export.

 The inputs are allowed to be procured free of duties.

 The Directors of STPs have powers to approved fresh STP/EHTP

proposals and also grant post-approval amendment in respect
of EHTP/STP projects as have been given to the Development
Commissioners of Export Processing Zones in the case of Export
Oriented Units.
 Project start Ups

For starting an industrial project, an entrepreneur must

normally follow the following process:

 Know the project or products to be manufactured

 Get a project profile which must provide brief information on

the project or products to be manufactured

 Decide location where the entrepreneur is likely to put up the

project

 Understand the procedures and formalities which are required

to be completed before taking up the project for
implementation
 Approvals Required for establishing an Industrial Project
(GUJARAT)
Authority Remarks
Approval Type
Industrial Approval
1 Entrepreneurship District Industries For setting up SME
Memorandum (EM) Centre Prescribed Application form

2 Industrial Secretariat For For setting up projects other than SME,

Entrepreneurship Industrial and not included in compulsory licensing
Memorandum(IEM Approval(SIA), New provision
Delhi Application in prescribed form(IEM) Part I
.
Format of Follow-Up Report to be
submitted
Till Commencement of Production - Status of
After Commencement of Production - Part-B

3 Letter of Do Projects requiring compulsory licensing

Intent(LOI) Application in prescribed form
4 100% EOU & SEZ Development Application in prescribed form
units Commissioner, SEZ
Business Constitution
Approval Type Authority Remarks

1 Registration as Registrar of Proprietory concerns or

Firm Firms Partnership Firm

2 Private/Public Registrar of Private Ltd. or Public Ltd.

Company: Name Companies Company
, approval and
incorporation of
the Company

3 Cooperative Registrar of For forming Cooperative

Society Cooperatives Society
Land for project
Approval Authority Remarks
Type

1 Allotment of GIDC Application in prescribed form

plot/shed in
Industrial
Estate

2 Allotment of District Collector No prescribed application

Government
land

3 Agricultural Purchase through No prior permission require

Land negotiation

4 NA Collector/DDO Prescribed application form for

Permission deemed NA
Environment Clearance
Approval Authority Remarks
Type
1 No Objection  Gujarat Pollution Application in the prescribed form 
Certificate Board by polluting industries like 
chemicals,  pharmaceuticals, etc. 
(other than 100 industries listed by 
GPCB)

2 Environmental   Ministry of  Specific projects need prior 

Clearance (EC) Environment and  environmental clearance from 
Forest  MOEF/State level Environment 
(MOEF)/SEIAA Impact Assessment Authority 
(SEIAA)

3 Consent and  G.P.C.B. On completion of the project and 

Authorization meeting the norms for disposal of 
effluent, G.P.C.B. will issue consent 
letter
 Approval Authority Remarks
Type

Construction of Building
1 Plan Approval in GIDC Application to Regional Manager, GIDC
Industrial
Estate
2 Plan Approval in Local Authority Application to concerned local authority,
other area where site is selected
Water Requirement
1 In Industrial GIDC Application to Regional Manager/
Estate Executive Engineer of GIDC
2 River/Public Department of Narmada Application to Executive Engineer of
service & Water Resources, GoG concerned Irrigation scheme

Power Requirement
1 Power Gujarat Urja Vikas Nigam Application in prescribed form
requirement Ltd.-Distribution
Co. or respective agencies
 Approval Authority Remarks
Type
Financial Requirement
1 Capital Issue SEBI Application in prescribed form to
Security Exchange Board of India
2 Term Loan Financial Institut Application in prescribed form
ions or Bank alongwith detailed Project Report
3 Working Banks Application to Branch Manager of
Capital a Commercial Bank
•Under the 'Single Window Schem
e', both term loan & working
capital upto Rs 25 lacs is available

Final Approval
1 SME DIC EM Part II
2 Large Units SIA •LOI is to be converted into IL
•IEM Part II in case of delicensed
units
 Approval Type Authority Remarks

Registration of Establishment
1 Registration Local Authority/ Registration of an industrial unit
under Shops & Municipal Corpor not covered under Factories Act
Establishment ation
Act

2 Registration as Chief Inspector Application in prescribed form

Factory of Factories under the Factories Act
Value Added Tax
1 VAT Commercial Tax Application for certificate of registr
Registration Officer ation under GVAT Act 2003. (In
case off turnover above Rs. 5
lakhs having sales of above Rs.
10,000 vat applicable items.
2 Central Sales
Tax
3 Excise
Registration
IEM
DIC FORM