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Government to develop parks and dormitories near manufacturing clusters
Industry News- Jul 24,24
Twelve industrial parks under the National Industrial Corridor Development Programme will also be sanctioned, with significant progress already in Uttar Pradesh and Tamil Nadu.
In her Union Budget 2024 speech, Finance Minister Nirmala Sitharaman identified manufacturing & services as one of nine key priorities, unveiling several incentives to bolster India's manufacturing sector.
“Our government will facilitate the development of investment-ready ‘plug and play’ industrial parks with complete infrastructure in or near 100 cities, in partnership with the states and private sector, by better using town planning schemes,” Sitharaman announced.
Twelve industrial parks under the National Industrial Corridor Development Programme will also be sanctioned, with significant progress already in Uttar Pradesh and Tamil Nadu. These parks are expected to boost employment in manufacturing.
The finance minister also announced rental housing with dormitory-type accommodations for industrial workers, facilitated through public-private partnerships (PPP) with viability gap funding (VGF) and commitments from anchor industries. “The creation of industrial parks in 100 new cities, along with dormitories and women’s hostels, will ensure companies have access to the right talent and enhance women’s workforce participation,” said Viswanath PS, MD & CEO, Randstad India.
To enhance workforce experience, the government will launch a comprehensive package providing internship opportunities in 500 top companies to 1o million youth over five years. Interns will receive a monthly allowance of Rs 5,000 and a one-time assistance of Rs 6,000, with companies covering training costs and 10% of internship costs through CSR funds. “This will empower our youth with necessary skills and experience for the evolving job market,” added Viswanath.
The finance minister announced the ‘Credit Guarantee Scheme’ to facilitate term loans for machinery and equipment purchases without collateral or third-party guarantees. This scheme will pool credit risks of MSMEs, helping them expand capacities, scale production, and enhance market reach. “This support is critical for developing India’s manufacturing ecosystem, especially in emerging sectors like electronics and semiconductors,” said Kathir Thandavarayan, Partner, Deloitte India.
The electronics manufacturing sector saw some relief with a reduction in basic customs duty (BCD) on mobile phones, mobile PCBA, and mobile chargers to 15%. “With a three-fold increase in domestic production and a nearly 100-fold jump in mobile phone exports over the last six years, the Indian mobile phone industry has matured,” said Sitharaman. Domestic production of electronic items rose to Rs 8.22 trillion, and exports increased to Rs 1.9 trillion in FY23, with significant investments from companies like Apple.
Sitharaman also proposed removing BCD on oxygen-free copper for resistor manufacturing and exempting certain parts for connector manufacturing. “We recommended reducing BCD on mobile phones and components to 15%, which has been accepted. This will enhance manufacturing, exports, and competitiveness,” said Pankaj Mohindroo, Chairman, ICEA.
Muralikrishnan B, President, Xiaomi India, welcomed the announcement, highlighting Xiaomi’s focus on local manufacturing and component sourcing. “Today’s announcement will further strengthen the domestic electronics manufacturing ecosystem,” he said.
Globally, the electronics manufacturing market is valued at $4.3 trillion, dominated by China, Taiwan, USA, South Korea, Vietnam, and Malaysia. Despite India's four percent share in global demand, its exports are approximately $25 billion annually, less than one percent of the global share. The incentives for skilling, customs duties, and R&D will steer the industry in the right direction.
(Source: Forbes)
Muralikrishnan B
Nirmala Sitharaman
nudget
budget 2024
manufacturing
MSME
Xiaomi India
Pankaj Mohindroo
ICEA
Kathir Thandavarayan
Deloitte
Viswanath PS
Randstad India
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