Monday, September 4, 2006
INDUSTRIAL
POLICY
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The
Government's liberalization and economic reforms programme aims at rapid
and substantial economic growth, and integration the global economy in a
harmonized manner. The industrial policy reforms have reduced the
industrial licensing requirements, removed restrictions on investment
and expansion, and facilitated easy access to foreign technology and
foreign direct investment.
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2.1
Industrial Licensing
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All
industrial undertakings are exempt from obtaining an industrial License
to manufacture, except for
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(i)
industries reserved for the Public Sector (Annex I),
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(ii)
industries retained under compulsory licensing (Annex II),
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(iii)
items of manufacture reserved for the small scale sector
(details given in para 2.6) and
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(iv)
if the proposal attracts locational restriction (details given in para
2.5).
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2.2
Procedure for obtaining Industrial License:
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(a).
All industrial undertakings subject to compulsory industrial licensing
are required to submit an application in the prescribed format, i.e.
Form FC-IL. Licenses are granted under the provisions of the Industries
(Development and Regulation) Act, 1951. The form is available in the
Entrepreneur .Assistance Unit (EAU) of the SIA and at all outlets
dealing in Government Publications, Indian Embassies, and can also be
downloaded from the web site of the DIPP (http://dipp.nic.in).
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(b).
Application in form FC-IL should be submitted to the EAU of the SIA,
Department of Industrial Policy & Promotion, Ministry of Commerce
and Industry, Udyog Bhawan, New Delhi. 110011.
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(c).
The application should be submitted along with a crossed demand draft of
Rs.2500/. drawn in favour of the Pay & Accounts Officer, Depar1ment
of Industrial Policy & Promotion, Ministry of Commerce &
Industry, payable at New Delhi.
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(d).
Industrial Licence is granted by the Government on the recommendation of
the Licensing Committee which considers the application. Decisions on
applications are usually taken in 4-6 weeks of filing the application.
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2.3
Procedure for Industries exempt from licensing. Industrial Entrepreneur
Memorandum
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Industrial
undertakings exempt from industrial license, including existing units
undertaking substantial expansion, are required to file an Industrial
Entrepreneur Memoranda (IEM) in Part 'A’ (as per prescribed format)
with the Secretariat of Industrial Assistance (SIA), Depar1ment of
Industrial Policy and Promotion, Government of India, and obtain an
acknowledgement. No further approval is required. Immediately after
commencement of commercial production, Part B of the IEM has to be
filled in the prescribed format. The facility for amendment of existing
IEMs has also been introduced.
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2.4
Procedure for filing n industrial Entrepreneurs Memorandum (lEM)
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(a).
The IEM form is available at all outlets dealing in Government
publications, Indian Embassies, the Entrepreneurial Assistance Unit
(EAU) of the Secretariat for Industrial Assistance (SIA), Department of
Industrial Policy and Promotion, Udyog Bhavan, New Delhi-110011, and can
also be downloaded from the web site of the DIPP (http://dipp.nic.in).
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(b).
The Memorandum (IEM) after filling in can be submitted to the
EAU of the SIA in person or by post. The IEM should be submitted along
with a crossed demand draft of Rs.1000/- drawn in favour of "The
Pay & Accounts Officer, Department of Industrial Policy &
Promotion, Ministry of Commerce & Industry", payable at New
Delhi up to 10 items proposed to be manufactured in the same unit. For
more than 10 items, an additional fee of Rs.250 up to 10 additional
items needs to be paid through crossed demand draft.
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(c).
A computer acknowledgement containing the SIA Registration
Number (for future reference) is issued across the counter immediately,
if delivered in person, or sent by post, if received through post. No
further approval from SIA is required.
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(d).
All Industrial undertakings also need to file information in
Part 'B' of the IEM at the time of commencement of commercial production
to EAU in SIA. No fee is required for filing part B. All industrial
undertakings whether exempt or not from compulsory industrial licensing,
are statutorily required to submit a monthly production return in the
proforma at the following address every month, so as to reach the
Industrial Statistics Unit (ISU) by the 1 0th of the following month
positively.
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Joint
Director
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Industrial
Statistics Unit (ISU)
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Department
of Industrial Policy & Promotion
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Room No.326,
Udyog Bhawan,
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New Delhi
-110 011
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Fax:
011-2301 4564
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E-mail:
.[email protected]
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This
information is used to compile the Index of Industrial Production (IIP),
which is a time bound monthly exercise. A copy of the monthly production
retum may also be submitted to the concerned Administrative
Ministry/Department/Authorities, etc., as the case may be. Details and
the prescribed format are available at the website: http://dipp.nic.in
In the case of small scale industrial undertakings, the monthly
production return should be submitted to the appropriate State
Government or Commissioner of Industries and to the Department of Small
Scale and Agro & Rural Industries, Government of India along with a
copy to the Small Industries Service Institute.
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(e).
An IEM would be cancelled/deleted from the SIA records if, on
scrutiny, it is found that the proposal contained in the IEM is
licensable.
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2.5
Locational Policy
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Industrial
undertakings are free to select the location of a project. Industrial License
is required if the proposed
location is within 25 KM of the Standard Urban Area limits of city unless, it is to be located in an area designated as an "industrial area" before the 25th July, 1991. (List of cities with population of 1 million and above as per the 1991 census as given at Annexure-V). Electronics, Computer software and Printing and any other industry, which may be notified in future as "non polluting industry", are exempt from such location restriction. The location of industrial units is further regulated by the local zoning and land use regulations as also the environmental regulations, as applicable. |
2.6Policy
Relating to Small Scale Undertakings
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An
industrial undertaking is defined as a small scale unit if the
investment in fixed assets in plant and machinery
does not exceed Rs.10 million. The small scale units can get registered with the Directorate of Industries/District Industries Centre in the State Government concerned. Such units can manufacture any item including those notified as exclusively reserved for manufacture in the small scale sector. Small scale units are also free from locational restrictions cited in paragraph 2.5 above. However, a small scale unit is not permitted more than 24 per cent equity in its paid up capital from any industrial undertaking either foreign or domestic. If the equity holding from another company (including foreign equity) exceeds 24 per cent, even if the investment in plant and machinery in the unit does not exceed Rs.10 million, the unit loses its small scale status. |
2.7 Non-small
scale unit can manufacture items reserved for the small scale sector by
obtaining an industrial license as stated in para 2.1. In such cases, it
is mandatory for the non-small scale unit to undertake minimum export
obligation of 50 per cent of their production of SSI reserved items.
This will not apply to non-small scale EOUs that are engaged in the
manufacture of items reserved for the SSI sector, as they already have a
minimum export obligation of 66 per cent of their production.
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2.8
Procedure obtaining Carry on Business (COB) License
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A small
scale unit manufacturing small scale reserved item(s), on exceeding the
small scale investment ceiling in plant and machinery by virtue of
natural growth, needs to obtain a Carry-on-Business (COB) License. No
export obligation is fixed on the capacity for which the COB license is
granted. However, if the unit expands its capacity for the small scale
reserved item(s) further, it needs to apply for and obtain a separate
industrial/license. The application for COB License should be submitted
in revised form "EE", which can be downloaded from the web
site (http://dipp.nic.in)
along with a crossed demand draft of Rs.2500/- drawn in favour of the
Pay & Accounts Officer, Department of Industrial Policy &
Promotion, Ministry of Commerce & Industry, payable at New Delhi.
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2.9 It
is possible that a chemical or a by-product recoverable through
pollution control measures is reserved for the small scale sector. With
a view to adopting pollution control measures, Government have decided
that an application needs to be made for grant of an industrial License
for such reserved items which would be considered for approval without
necessarily imposing the mandatory export obligation.
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2.10
Entrepreneurs are required to obtain Statutory clearances
relating to Pollution Control and Environment for setting up an
industrial project. A Notification (SO 60(E) dated 27.1.94) issued under
The Environment (Protection) Act, 1986 has listed 30 projects in respect
of which environmental clearance needs to be obtained from the Ministry
of Environment & Forest, Government of India. This list includes
industries like petrochemical complexes, petroleum refineries, cement,
thermal power plants, bulk drugs, fertilizers, dyes, paper etc. However,
if investment is less than Rs.1000 million, such clearance is not
necessary, unless it is for pesticides, bulk drugs and pharmaceuticals,
asbestos and asbestos products, integrated paint complexes, mining
projects, tourism projects of certain parameters, tarred roads in
Himalayan areas, dis1illeries, dyes, foundries and electroplating
industries. Further, any item reserved for the small scale sector with
investment of less than Rs.10 million is also exempt from obtaining
environmental clearance from the Central Government Powers have been
delegated to the State Governments for grant of environmental clearance
for certain categories of thermal power plants. Set1ing up industries in
certain locations considered ecologically fragile (e.g. Aravalli Range,
coastal areas, Doon valley, Dahanu, etc.) are guided by separate
guidelines issued by the Ministry of Environment and Forests, Government
of India. Details can be obtained at the website of
Ministry of Environment and Forests (http://envfor.nic.in).
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Source: ITPO
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