New Delhi, June 9 (KNN) Aiming at formulating a new Industrial Promotion Policy, the Department of Industry and Commerce has begun the process of consultation with the stakeholders. While the industry is eyeing keenly at the new industrial Policy, the sector wants the government to seriously address the important concerns to facilitate a fertile ecosystem.

Provided that the Industrial sector is passing through turbulent times, it is crucial that the new policy should come as a relief and not be just ‘another’ policy.

Since the ‘liberalizing’ industrial policy of 1991, no other policy, programme or scheme could make any discernible change in the industrial scenario of India. So announcement of a ‘future ready’ manufacturing policy by the Government will be highly welcome.

To quote Doni Rodrik the celebrated industrial theorist, “industrial policy means creating a climate of collaboration: a government embedded in private sector but not in bed with private sector”

Rodrik also mentioned that the policy should be in-built with carrot & stick; and the incentives should be temporary and the processes should be open to new entrants; glorified as startups today.

Therefore the makers of the new policy should concentrate on these issues rather than trying to micro manage the industrial environment with doling out a rupee here and threatening with a stick there.

In any case the Indian megaliths in industry do not care much for a policy, they generally can get the things done as per requirements.

But for the micro, small and medium sector the policy guidelines are life or death, nay, grow or perish issues. MSMEs depend on Government  from the day one of ‘dreaming’ about the venture; starting from statutory ‘permissions’, to getting electricity, to getting finance, to starting production and in many cases for sale of the product.

So any policy worth its salt must address these issues equivocally, that also with minimal intervention in the day to day process.

A bigger challenge before any ‘central’ policy is the federal structure of India where almost the entire infrastructural support for industries is in the domain of States. So why not start a GST like consultation with the states  for a floor level industrial policy at the all India level, which can of course be ‘upped’ by the states, if they want.

Today a crucial issue before any national industrial policy should be to provide a base level of ‘ease of doing business’ in all states, mere ranking the states will not make the entrepreneurs any wiser.

Again, for developing the policy packages, the Ministry need not do fundamental research. All over India there are isolated cases of highly successful industrial policy components and ease of doing business ecosystems.

The ministry should try to cull out all these successful policies and collate them in a harmonized manner.

Without a supportive financial environment no industrial policy will do any good to industry, at least to MSMEs and so far all industrial policies are nearly silent on this important issue.

While direct Government intervention in Banking and Financing may not be appropriate, as the current scenario of failure of big companies shows, there are plenty of globally successfully tools which may induce easy, affordable finance for prospective ventures.

Finally, the Government should also study the pitfalls in the earlier manufacturing policies and address them adequately in the new policy, to carry out the necessary ‘debugging’. Only then we may achieve a policy providing 360 degree solutions for industrial development. (KNN/DB)