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08 Dec 2011

People’s Union for Democratic Rights wants to draw public attention to a new industrial policy regime being proposed by the Congress party led UPA II Government in the name of increasing GDP share of manufacturing from 16 to 25 per cent and to generate 100 million jobs over next five years. The New Manufacturing Policy aims at creating large integrated industrial townships, national investment and manufacturing zones, lower regulatory and compliance “burden”, and faster clearance with fiscal incentives. These National Industrial Manufacturing Zones or NIMZ, are positioned as “self-governing and autonomous bodies”. For this purpose Union Government intends to amend Article 243 Q-C to declare these NIMZ as “industrial townships” and arm them with municipal powers. It is not clear whether the municipality will be an elected body or nominated body. But in either case it is the industries located there who will dominate and control the municipality.

This biggest infrastructure project being contemplated in India’s history i.e. to contsurct industrial corridor between Delhi to Mumbai plans to develop 24 industrial cities over 5000-5500 sq km in the 1483 km long corridor spanning National Capital Region, UP, Haryana, Rajasthan, Gujarat and Maharashtra. First phase will be completed by 2018 and develop 7 cities at a cost of $90 billion. This phase will see acquisition of 2000 sq km or 500,000 acres. IN July 2010-2011 the Ministry of Finance provided Rs 2500 per city or Rs 17,500 cr in all for the first phase. Rest of the funds, 80%, will come from Japan International Cooperation Agency.

Easier ‘hire and fire’ policy for owners of capital will be accompanied with a concession that labour dues will be de-linked from assets of the company by mandating a sinking fund and insurance cover for workers. On termination of service, which will become easier for companies in this zone, a carrot of compensation for retrenchment of workers is dangled which would be calculated for 20, instead of 15 days, for each year of service. That is provided a worker is allowed to complete one year of service! While there will not be any labour union or labour department it is the CEO of the SPV who will have powers to protect workers interest.

From what the newspapers have reported it is apparent that the seven states including Maharashtra, Gujarat, Andhra Pradesh, Rajasthan, which have created “land banks” or where state government have declared that land acquired and in their possession will be used as land bank for promoting industries. Since in the first stage overlaps with seven industrial township planned along Delhi-Mumbai highway, these relatively more industrially developed states have been chosen for launching NIMZ , the backward regions will continue to lag behind other states in industrial development and will not be able to attract capital investment since they are not in a position to offer anything as attractive as what central scheme offers through NIMZ. Therefore, there is likelihood of exacerbation of regional imbalance.

PUDR considers this policy of setting up NIMZ as a backdoor entry for sweatshops or islands of industrial capital dominated autonomous zones where neither Indian Constitution nor Indian law, as we know it, will operate. In the name of creating jobs corporate are offered subsidies in form of tax concessions and incentive in form of a subservient workforce. The corporate oriented perspective behind the NIMZ requires low wages, flexible working hours, hire and fire, management controlled unions at best…PUDR fears that not only will this policy exacerbate regional imbalance and turn workers, not just metaphorically but in reality, into wage slaves.
PUDR therefore appeals to all political parties, Trade Unions and Civil Liberties and Democratic Rights organizations to protest this unconstitutional and undemocratic policy regime which is in defiance of the Directives Principles of State Policy, in particular Article 43.

Harish Dhawan and Paramjeet Singh