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National Manufacturing Policy extended to industry clusters
Jan 18, 2014

To boost the manufacturing sector in India, the Department of Industrial Policy and Promotion (DIPP) has extended the incentives provided to the National Investment and Manufacturing Zones (NIMZs) to all the manufacturing industry throughout the country wherever industry is able to organize itself into clusters and adopt a model of self-regulation as enunciated in the policy.

Cluster as per the guidelines will be a concentration of manufacturing industry units located within a clearly demarcated geographical area notified by the state government.  Further the state government has to constitute a special purpose vehicle (SPV), to be headed by a government official, to manage each cluster.

Key Constituents of the NMP:

  • Increase the share of manufacturing in the country’s GDP from the current 16% to 25% by 2022.
  • Create 100 million additional jobs in the next decade.
  • Industrial training and skills development programmes.
  • Establishment of National Investment and Manufacturing Zones equipped with world-class infrastructure that would be autonomous and self-regulated developed in partnership with the private sector.
  • Flexible labor laws and simplified & expeditious exit mechanism for sick units.
  • Relaxation in environmental regulations.
  • Financial and tax incentives to small and medium enterprises.
  • Incentives to states for infrastructure development.
  • Incentives for Green Manufacturing.
  • Rationalization of business regulations to reduce burden of procedural and regulatory compliance on businesses.
  • Increased focus on employment intensive industries, capital goods industry, industries with strategic significance and those in which India enjoys a competitive edge and the SME sector.
  • Make industrial land (land acquisition) available through creation of land banks by states.


To encourage the private sector participation in skill development, the government will provide a weighted standard deduction of 150 percent of the expenditure (other than land and building) if the private sector units in the cluster undertake a PPP project for skill development in coordination with the National Skill Development Corporation (NSDC).


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