Declining exports, rationalisation of labour laws, liberalising FDI policy in sectors like defence, revival of manufacturing and tax sops for special economic zones (SEZs) were among the pressing issues listed out to new commerce and industry minister Nirmala Sitharaman, who assumed office on Tuesday.
A senior official told The Indian Express that commerce secretary Rajeev Kher apprised the new minister about the challenges faced by the SEZs, which have been adversely impacted ever since the finance ministry levied minimum alternate tax on the developers and units.
Kher also discussed the forthcoming foreign trade policy and declining exports, which grew 5.26 per cent to $25.6 billion in April. In 2011, under the UPA government, the ministry had prepared a strategy for doubling exports to $500 billion by 2013-14. However, exports grew only over $312 in FY14, not meeting even the annual target of $325 billion.
Further, the secretary also raised the issue of restrictions imposed on gold imports and the progress in the ongoing free trade agreements like the Regional Comprehensive Economic Partnership.
Industry department secretary Amitabh Kant elaborated on the hurdles in reviving manufacturing in the country, one of the big-ticket reform the BJP-led government is focussing on.
The secretary discussed the rationalisation of labour laws and the need for single window clearances to boost manufacturing, which declined 0.8 per cent during the last fiscal as per the Index of Industrial Production. Kant also spoke about the status of FDI in sectors including construction, e-commerce and defence, elaborating on the ongoing exercise to relax the policy in these sectors.
The DIPP officials also briefed the minister about sectors that can be focused on in order to boost manufacturing. “Sectors such as textiles, food processing, gems and jewellery and leather are labour-intensive and need special focus,” the official said.