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5.1 he Eleventh Plans thrust on acceleratedand inclusive growth requires rapid growth in themanuacturing sector with generation o qualityemployment. Te Eleventh Plan had envisaged themanuacturing and general industrial sector growingat an average rate o 1011 per cent, which was about2 per cent more than that achieved in the enth Plan.Manuacturing grew at 9 per cent in 200708, thefrst year o the enth Plan, but slipped to 2.6 percent in 200809 on account o the adverse eects othe global economic and fnancial crisis. In the frsteleven months o 200910 there was a strong recovery

with manuacturing output touching 10 per cent.Nevertheless, manuacturing output growth duringthe Plan period will still be ar short o the double digittarget set out in the Eleventh Plan.

5.2 Bringing about a more rapid growth in manuac-turing remains a major challenge. Te old ashionedprotection o Indian industry against competition isnot an option as it will only reduce competitivenessand dynamism in the industry. Te approach must beto identiy the constraints that hold back growth anddevise policies to overcome these constraints. It has tobe recognized that some o the constraints that must beeased, such as land and labour matters that are oenmentioned, are o a dierent nature than the licensingconstraints that were addressed in the frst round oindustrial reorms. Tey are more complex and requirepartnership with people. Tis calls or a wider processo consultation and greater inclusiveness.

5Industry

5.3 Te strategy must take into account the act thatthe industrial structure at present contains an entirespectrum o industrial units. At one end this includesmodern corporations, many o which comparewell with global companies and some o which arenow acquiring or developing assets abroad. It alsoincludes an extensive sector in the medium range withcompanies, which could easily grow in strength. Atthe other end it includes small and micro enterpriseswhich oen struggle to survive in an inhospitableenvironment. A successul industrial policy mustencourage each o these segments to contribute its

best while at the same time encouraging competitionand openness.

INDUSTRIAL POLICY OF THE ELEVENTH PLAN5.4 Te major ocus areas or improving the industrialclimate during the Eleventh Plan were as ollows:

Creation o world-class inrastructure and devis-ing regulatory mechanisms to reduce transactioncosts

Promotion and acilitation o industrial invest-ments, particularly oreign direct investment (FDI),non-resident investment, and oreign technologytransers/collaborations

Improvement in the business regulatory environ-ment o the central and state governments

Development o industrial inrastructure throughPPP initiatives

Removal o regional industrial imbalances


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Development o industry relevant skills Addressing environmental issues emerging out o

industrial activities

5.5 During the frst two years o the Eleventh Plan,the ollowing important policy modifcations werecarried out:

i. Te earlier restriction on location o industriesin cities with a population o 1 million and above(1991 Census) has been done away with. Entre-preneurs are now ree to select the location orsetting up o an industry subject to permissibilityin zone/land use regulations and environmentallegislations.

ii. In order to instill healthy competition amongstproducers, the list o items reserved or thesmall-scale sector is reviewed rom time to time.At present only 21 items are reserved or the small-scale sector. Manuacturers other than small-scaleones may also manuacture these items providedthey undertake an export obligation o 50 per cento the annual production.

iii. Te government has put in place a liberal andtransparent regime, where FDI up to 100 per centis allowed in most o the sectors and activities.Liberalization measures taken on this rontduring the frst two years o Eleventh Plan are

as ollows:

FDI up to 49 per cent allowed in credit inorma-tion companies and credit reerence agenciesexcluded rom the list o the Non-BankingFinancial Company (NBFC) activities whereFDI is allowed.

FDI up to 26 per cent and FII investment up to23 per cent allowed in commodity exchanges,subject to no single investor holding morethan 5 per cent equity and FII purchases beingrestricted to the secondary market only.

FDI up to 100 per cent under the automaticroute allowed both in setting up and in estab-lished industrial parks, provided they meet withcertain specifed conditions.

FDI cap in the civil aviation sector relaxed74 per cent FDI in non-scheduled airlines,chartered airlines, and cargo airlines and

100 per cent FDI in maintenance and repairorganizations and other related activitiesallowed.

FDI policy in the petroleum and natural gas sec-tor rationalized to do away with the conditiono compulsory divestment o up to 26 per centequity in avour o Indian partner(s)/publicwithin fve years, or the actual trading andmarketing o petroleum products.

FDI up to 100 per cent (with prior governmentapproval) allowed in mining and mineralseparation o titanium-bearing mineralsand ores, its value addition, and integratedactivities.

PLAN OUTLAYS AND EXPENDITURE5.6 Plan expenditure in the industrial sector is a smallpart o the total investment in this sector, which is nowdominantly driven by the private sector. Tere are 11departments and ministries that deal with dierentsegments o the industry and the likely expenditureon the schemes o these ministries during the frstour years o the Plan period would be about Rs 29,056crore (Gross Budgetary Support or GBS), which is69.6 per cent o the budgetary support or the FiveYear Plan. Te ministry-wise expenditure is given inAnnexure 5.1

5.7 Te Eleventh Plans ocus on inclusive growthresulted in great attention to micro and small enter-prises. Tese generate most o the employment inindustry since they are less capital-intensive, entrepre-neurial, and dispersed. Te Ministry o Small, Medium,and Micro Enterprises is dedicated to the growth othis sector. One o the agship schemes o this ministryis the Prime Ministers Employment GenerationProgramme (PMEGP) through which it is expectedthat additional sel-employment opportunities oaround 37 lakh will be generated during the EleventhPlan. Another important scheme o the ministry is

the Micro and Small Enterprises Cluster DevelopmentProgramme (MSE-CDP), which is to be undertaken inaround 400 clusters in the country. Te Programmeenvisages interventions or capacity building, skilldevelopment, technology upgradation, market support,setting up o common acilities centres, and so on, on acluster basis in labour-intensive industries. A number


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102 Mid-Term Appraisal of the Eleventh Five Year Plan

o initiatives or skill development and improvemento business skills and management practices arealso being undertaken by the ministry through its

various autonomous institutions and developmentinstitutes to cater to the needs o small industry. TeNational Manuacturing Competitiveness Programmeis also being implemented through the ministry ordeveloping the competitiveness o Indian MSMEs. Temajor components are related to quality improvementtechnology, upgradation, marketing and inormation,and communication technology.

INDUSTRIAL SECTOR: THE PATH AHEAD5.8 While specifc schemes o many o the industry-related ministries have some impact on industrial

productivity and competition, a real take-o to highindustrial growth calls or broader policy action onseveral ronts.

BETTER INFRASTRUCTURE5.9 Tere is no doubt that Indias manuacturingcompetitiveness is adversely aected by weaknesses ininrastructure, especially in energy and transportation.(Tese are discussed in detail in Chapters 15 and 16).Te point underscored in this chapter is that poorinrastructure hurts small and medium industry themost since this is the category that cannot aord itsown inrastructure. Large capital intensive industries

are less aected by poor power supply because theycan set up their own power plants and obtain powermore economically compared with sourcing powerrom utilities. Smaller units, on the other hand, areorced to rely on diesel powered generating sets whichprovide power at three or even our times the unit costo power rom the utilities. Similar considerationsapply to other inrastructure, such as roads and portsi only because large capital-intensive units can locatethemselves where the inrastructure is good whereassmaller units by their nature are dispersed and needgood inrastructure everywhere.

MICROAND SMALL ENTERPRISES5.10 Te role that the Micro and Small Enterprises(MSEs) sector plays not only in the inclusivenesso industrial growth, but in the quantum o growthtoo, has to be noted. It contributes 8 per cent o thecountrys GDP, accounts or 45 per cent o the manu-

acturing sectors output, and 40 per cent o its exports.Tereore, the Prime Minister appointed a high leveltask orce in 2009 to examine ways to overcome the

handicaps in the growth o this sector. Te task orcesrecommendations are now being implemented (seeBox 5.1). Tey address the critical issues that organiza-tions in this sector acecredit ow, improvement oskills, access to markets and raw materials, and copingwith a multiplicity o regulations and inspectors. Highlevel committees have also been set up to monitor theprogress o these recommendations.

INDUSTRIAL CLUSTERSAND COLLABORATIVEENTERPRISES5.11 Te need to improve the perormance o the

huge numbers o small-scale business enterprisespresents an organizational challenge. Teir peror-mance suers due to their small scale and insu cientcapital. Tey are too small to aord the investmentsrequired or improving human capital, quality, andmarketing that are necessary or improving theircompetitiveness and perormance. Tereore, there isa need to aggregate these small units into clusters ovarious orms whereby they can share inrastructureor human resource development, quality manage-ment, marketing, and so on.

5.12 Te benefts o aggregation, to overcome the

handicap o small scale as well as poor inrastructure,have induced several ministries, covering manydierent industrial sectors to promote clusteringin many orms to improve competitiveness o theIndian enterprises. his strategy is evident in theapproaches o ministries, such as those promotingtextiles, handicras and handlooms, ood processing,chemicals, pharmaceuticals, machine tools, auto com-ponents, and medium, small, and micro enterprisesin general.

5.13 Reviews o the progress made by the ministries

against their plans, and discussions about how thePlan objectives may be better achieved, have pointedto some common themes across industries. One othese is the strategy o aggregation o units to achievebenefts o scale. Te ministries have also pointedto some common challenges in implementing thisstrategy, a principal one being collaboration. Clusters


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obtain the beneft o scale through aggregation whenthe many parties involved work together. When theydo not collaborate, the numbers o parties involved,rather than being a source o strength are di cult to

manage. Te success o clusters is very oen deter-mined by the quality o collaboration amongst themany parties involved. Tese parties include manyprivate sector participants, the state government, andCentral Government agencies. Hence, skills to fndsolutions together and structures or collaborativemanagement are keys or success.

5.14 In a learning session in the Planning Commissiondierent ministries/departments and other agencies,including some o the Special Purpose Vehicles (SPVs)involved in implementing various cluster schemes

shared their experiences and insights on how certainelements could be better designed or implementedand mistakes avoided or achieving better outcomes.What resulted was a diagnosis o actors or the successo interventions by the ministries and departments/SPVs or clustering (see Box 5.2 or the lessons thatemerged).

5.15 Industrial enterprises that combine manysmaller, independently-owned businesses into alarger productive enterprise can enable more peopleto own their businesses. In such industries o the

people entrepreneurs are fnancial stakeholders intheir enterprises and not merely employees. Suchenterprises can take many ormsas supply chainsto a large company, or conglomerations o smallenterprises into production clusters, or cooperatives,or producer companies. Innovation here is in theorm o the enterprise that enables aggregation omany smaller independent units into a larger one.Such innovations have special value in India where, asmentioned earlier, many small enterprises are sprout-ing, whose competitiveness and sustainability can beimproved through aggregation into larger enterprises

whereby they can obtain benefts o scale too.

5.16 he government can make the ormation ocollaborative enterprises and clusters easier in twoways. First, it can develop appropriate legislativerameworks and remove disabilities in present lawsand regulations.

Box 5.1

Summary of Recommendations of the Prime Ministers Task Force on Micro,

Small, and Medium Enterprises

Measures that need immediate action

i. Strict adherence to stipulated credit targets by commercial banks or the micro enterprises.ii. A separate und with Small Industries Development Bank o India (SIDBI), using the shortalls against the MSE credit

targets set or commercial banks.

iii. A Public Procurement Policy or MSMEs as envisaged in the Micro, Small, and Medium Enterprises DevelopmentAct, 2006.

iv. Oset policy o the government should give priority to MSMEs.v. Additional public spending to the tune o Rs 5,0005,500 crore over the next 35 years to specifcally target defciencies

in the existing inrastructure and institutional set-up.

Medium-term institutional measures

i. Improve the institutional set-up at the national level or the promotion and development o MSMEs.ii. A Standing Review Committee to monitor ow o credit to the MSME sector.

iii. Micro-Finance Institutions (MFIs) to fnance micro enterprises.

iv. District Industries Centres (DICs) should be strengthened.

Legal and regulatory structures

i. Te establishment o an SME exchange.

ii. Legal options or the securitization o trade credit receivables and or the promotion o actoring services.

iii. Wider adoption o new ormats like limited liability partnerships and single person companies.iv. Te insolvency legislation should be comprehensively reviewed.

v. Labour laws should be simplifed, especially those applicable to enterprises in the MSME sector.


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Box 5.2

Learning Experiences for Achieving Better Outcomes of Cluster Schemes

Learning Action Step

1. Combination o so and hard Study all schemes to see whether they have a clear and specifc provision

interventions or so interventions and make modifcations to the scheme design toensure that the so components are comprehensively and adequately

addressed as necessary or the situation

Ensure that the implementation plan proposed during the approval stageor subsequently has su cient priority or so interventions

2. Flexibility in design and Study all schemes to see whether they have clear and specifc provisionsimplementation o schemes or activity-wise fnancial limits and redesign them to consider embedding

exibility to reallocate budgets across activities within the total assistance

based on local situation and demand Rework implementation guidelines to allow inter-se reallocation o unds

under dierent components during implementation subject to suitable

justifcation3. Developing trust and cooperation Presence o a strong cluster development agency/partner should be

among cluster participants reviewed at the time o approval o the project

4. argeting the entire value chain o While approving schemes in sectors/industries with strong backward andthe product orward linkages, consideration should be given to how the project

intervention will improve the value chain or the product

5. Suitability o mode o Study whether alternative modes o implementation through or proft,

implementation not-or-proft companies (Section 25), NGOs should be allowed in the

same scheme Lay down the roles and responsibilities o all the stakeholders clearly in

the schemes Consider exibility in structure o SPV to allow a ew majority stakeholders

or driving the project. Incorporate saeguards or ensuring larger public

beneft o the project

6. Longer term engagement o a Develop a suitable model or longer term engagement o a proessional

service provider service provider who will be compensated on outcome-based parameters Gather the knowledge o experience o similar arrangements with

ongoing and past schemes

Higher allocation o unds or engaging such a service

7. Maximizing asset usage during Allow some provision or fnancial support or management o common

operation and maintenance acilities during the initial period o operation

8 Promoting inclusiveness in projects Develop clear metrics or defning and measuring inclusiveness in project

remains a challenge Work out an incentive ramework or implementing agencies to addressinclusiveness, including linking uture disbursements to enhancing

inclusiveness Incorporate social impact assessment as part o monitoring and evaluation

o projects in a manner that the inclusiveness dimension is clearly addressed

5.17 Second, the government and industry associationscan catalyse programmes or improving techniquesand skills or collaboration. So skills are requiredor improving the perormance o enterprises, just

as they are or improving individual perormance.he total quality movement that permeated largeand small irms in almost all Japanese industriesin the 1970s transormed their capabilities. Simple


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techniques were learned by Japanese managers andworkers to improve quality that they applied totheir own work settings. Tey were disseminated by

many institutions, government and private, and eventhrough newspapers and the radio! Teir adoption waspromoted by competitions. Tus the nation adopted anew language and new ways or quality management.Later, companies in other nations adopted these sametechniques to catch up with Japanese competitors whohad surpassed them. Similarly, a campaign is requiredto improve so skills or collaborative management, inclusters and otherwise, or Indian industry, especiallysmall industry, to improve its competitiveness andgrowth. A strategy to build this inrastructure derivedrom success stories in India is described in Box 5.3.

SPECIAL ECONOMIC ZONES5.18 Special Economic Zones (SEZs) are a specialorm o industrial cluster in which the units withinit, in addition to the benefts o a shared and betterquality inrastructure, also get special tax benefts to

oset high transaction costs in the domestic economyto enable them to improve their competitiveness withinternational competitors. A policy or SEZs was

ormulated in 2005 underpinned by the SEZ Act, 2005,and the SEZ Rules, 2006. Te investment in settingup SEZs comes rom the private sector and there isno commitment rom the government in this regard.Out o the total investment o Rs 1,28,385 crore as on31 December 2009 in these SEZs, the major chunk oinvestment o Rs 1,15,603 crore was made by SEZsnotifed under the SEZ Act, 2005, since the cominginto orce o the Act in February, 2006.

5.19 By January 2010, 571 SEZs had been accordedormal approval out o which 346 have been notifed,

and 105 are actually operational. Many more areexpected to become operational in 2011. Tere are2,761 units in these 105 SEZs. O the 105 operationalSEZs, 15 are multi-product SEZs while the remainingare in I/IES, engineering, electronic hardware,textiles, biotechnology, and gems and jewellery.

Box 5.3

Soft Infrastructure: Counsellors and Industry Associations

Te achievements o the Indian auto component industry in the last 15 years are noteworthy. According to traditional wisdom,scale is necessary to succeed in the auto industry. Te domestic automobile market was small until recently. Nevertheless,

several Indian auto component manuacturers started competing or business internationally. What made them attractive

were not only their low costs as compared with Western suppliers but also their quality and engineering capabilities. Teindustry made a concerted eort to build the capability o its members in quality and productivity and engineering, including

the small ones o whom there are many in the industry, and the ruits o that eort were the commercial successes o itsmembers in exports and within the country too against oreign producers.

Te industry-wide ocus on systematic development o capabilities o its members took root with the ormation o two

clusters in 1998 under the guidance o Proessor suda, a quality expert rom Japan, working with ACMA and CII. It ledto 11 o the companies winning international recognition by getting the Deming Prize or quality, the highest international

recognition or quality. Tis was the highest number o Deming Prizes won by any country aer Japan.Te cluster-based capability building programme has now been running or over ten years. Companies who participate

in this programmemany o which are small, with turnovers o less than Rs 10 crore per annumvalue the services they

get. Tey pay or the services with hardly any complaints. Clusters include companies that are business competitors whohave established boundaries o what they will share and what they may not. Tus they have created a commons rom which

they all gain i they use it well.

wo lessons can be gleaned rom this experience. Te frst is the critical role o trained counsellors. Te biggest bottleneckin ramping up this initiative is the shortage o good, motivated, and capable experts or helping the companies. However,

the programme has developed a profle and a curriculum or training good counsellors. With this, the number can now bemultiplied, and with a larger number the benefts o this successul cluster-based approach can be expanded.

Te second lesson is in the role o industry associations. One o the di culties in getting clusters to orm and then

perorm, is the di culty o getting the benefciaries to cooperate with each other. Tey do not have the so inrastructureo trust and systems, which must be built or them to cooperate. Industry associations provide inrastructure or engendering

cooperation amongst companies. Tey are also good conduits o assistance to the clusters.


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5.20 Tese SEZs have provided direct employmentto 4.9 lakh persons o which 3.6 lakh is incrementalemployment aer the enactment o the law. Exports

rom these SEZs in 200910 (till December 2009)were Rs 151,000 crore: 66 per cent o these weremanuactured goods, 21 per cent I/IEs, and 13per cent trading. Tus, SEZs have contributed sig-nifcantly to growth o manuacturing, employment,and exports. Whereas the SEZs have proved theirvalue as a concept, a major problem with the expan-sion o this idea is acquisition o land, particularlyagricultural land.

BALANCING SCALEAND DEPTHACROSS INDUSTRIES5.21 For any manuacturing economy, building deep

manuacturing capabilities in specifc industries is animportant aspect o sustainable growth. Depth isdefned as capability and expertise in all aspects o aproduct value chainrom R&D and product design,to manuacture o components and fnal products, andurther to installation and service, where appropriate.Depth is important or multiple reasons.

5.22 In certain industries such as deence and tele-communications, national security requires that thevalue chain be indigenous. Controlling the upstreamvalue chain in some industries is critical or saeguard-ing growth in the downstream segments. Depth allows

or the capture o greater value along the chain. Greaterdepth makes the industrys position more stable andless exposed to shiing global demandsupply situa-tions and increasing volatility. Tis has consequenceor key parameters like GDP growth and employmentgeneration.

5.23 However, it is also important to note that theright balance o scale and depth is required acrossindustries. Over the last two decades, Rapidly Develop-ing Economies (RDEs) including India have growntheir share o global trade through greater o-shoring

to RDEs by companies in developed markets, o lowervalue mass production or assembly, driven primarilyby the labour cost advantage o RDEs. Te high-valueparts o the chain, or example, R&D and designand production o core components, were oen notoutsourced as these companies were keen to retaintheir technology and value creation in their home

countries, and also because these parts o the chainwere more competitive in the developed markets.Very oen investments are driven only in a specifc

part o the value chain due to higher competitivenesso RDEs in that part o the chain. It is important thatthese investments are not discouraged in the policyramework to promote depth.

5.24 Indias challenge is to do bothcontinue to cap-ture a large share o the o-shoring space by buildingscale in assembly and production o some basic partsin relevant industries; and at the same time, buildingdeeper manuacturing capabilities which allow agreater share o the total value chain.

5.25 Tere are several sectors where India is buildingto global scale, but with not enough presence acrosseach stage o the value chain. Tese include mobilephones, telecom equipment, consumer electronics,and even passenger cars. For example, in telecomequipment while a large proportion o wireless devicesand soware content are now produced in India,design, components, and telecom inrastructurecontinue to be imported rom other markets and nosingle Indian player has been able to build capabilitiesto have a major play in the domestic market, leavealone the global market. (Indeed, India has to importsuch equipment rom China, where such capabilities

have been built whereas they have not been built inIndia even though telecom markets in both countriesare large enough to provide manuacturing scale.)On the other hand, in passenger cars, several Indianplayers have made a strong beginning and are buildingcapabilities to design and manuacture cars romscratch and now have an opportunity to scale up thesecapabilities to global levels.

5.26 Finally, India currently lags behind the curve onR&D. R&D spending is only 0.8 per cent o GDP whichis much lower than developed country or even other

rapidly developing economy benchmarks (able 5.1).Given that technology and R&D are critical driverso depth in any industry, this is a matter or concern.wo issues to consider here are: the quantum o R&Dspent and the eectiveness o spending. More spendingneed not translate into more results. Tereore, merelycalling or an increase in the spending to catch up with


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the levels o other countries is not a smart strategy.Te productivity o R&D and the eectiveness othe spending are more important and must be the

ocus o policymakers as well as R&D organizations.Issues related to R&D are addressed in the Chapterson Science and echnology (Chapter 19), as well asInnovation (Chapter 20).

TABLE 5.1

R&D Expenditure as Percentage of GDP in 2007

Brazil 1.02 (2006)

China 1.5Pakistan 0.7India 0.8Mexico 0.5Russia 1.1

South Korea 3.5Malaysia 0.6Tailand 0.2

Source: OECD and UNESCO Data Centre.

Policy Levers to Drive Depth

5.27 India has progressively liberalized its industrialpolicy to attract investments. Tis has paid o inmany ways. Te key question now is: given the currentposition o the Indian industry and the global trendsin o-shoring, should India refne its policy stance andramework to give greater ocus to building depth intarget sectors?

5.28 Indian manuacturing will require a concertedpolicy agenda that should vary based on the type oindustry. As a starting point, our main segments thatrequire ocus are:

Te nations building blocks inrastructure, capi-tal goods, and machine tools, etc.require ocusedeorts and large investments to build technicalexpertise and manuacturing capabilities.

In consumer-led businesses, which are driven byscale and where India has already started building

to scale, the ocus will be to continue to rapidly buildto scale to drive down costs, and at the same time,proactively learn and transer knowledge rommore developed markets.

New/emerging technologies where India couldposition itsel as an early mover and possiblyglobal leader require careul assessment to identiy

the right emerging technologies where India candisplay advantage. Tese technologies will requiresupport through earmarked innovation unds,

open experimentation, and active teaming andinvestment in research institutes to gain earlymover advantage.

In deence, India will need ocused investmentto build capabilities in manuacturing deenceequipment.

5.29 Tere is a range o actions that the governmentscan take to acilitate the growth o specifc manuactur-ing industries in a competitive manner. Te objectiveso these could be to promote employment generatingindustries in which the country has some resource

advantages (such as large labour pools, raw materials,and traditional skills), and/or to create depth in someindustries or strategic reasons as mentioned earlier.Tese actions could be in the ollowing areas:

i. Te governments own purchases, where theseare large, could be used as a lever to encouragedomestic manuacture and transer o technologyas a condition. Te intention should not be tosimply preer domestic manuacture irrespectiveo cost or technology but to use leverage to createa modern and competitive industry.

ii. Standards o products and services that may be

sold in the country could be specifed in a man-ner that would encourage domestic productionbuilding to scale within these standards.

iii. Wherever the government subsidizes the purchaseand use o new technology (or example, or thepromotion o environment riendly products)it specifes standards or technologies as well asdomestic production requirements.

iv. ax benefts (and/or) interest subventions orselected industries along with conditions or localcontent (with no discrimination between domesticand oreign companies).

v. Subsidies or local manuacture, or local R&D,in selected industries (with no discriminationbetween domestic and oreign companies).

vi. Provision o special inrastructure, or example,privileged and well equipped areas, R&D unds,and marketing unds the users o which arerequired to meet specifed conditions.


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Tis is an illustrative list. Te specifc actions thatwould be appropriate must be determined througha process o consultation between the producers and

policymakers.

5.30 Asian countries, especially Japan, Korea, andChina, which accelerated their industrial growth in thelast ew decades, targeted their policies very eectivelyto produce results. A lesson rom the successes o thelarge industrial Asian giants is the close cooperationbetween the policy and productive sectors in theshaping o policies. Te productive sector, as it seeksto expand and compete, eels the pinch in the shoe,which must be eased by policy change. Tese policiesmust be WO compatible. Tis requires much better

collaboration between industry and policymakersto ocus policy actions. Tereore, the quality o theprocess o collaborative learning and policymakingwill be a key to the growth o industry. While industryand the government in India are meeting in variousorums, there is scope to sharpen insights or strategicactions that can have the most impact at the leastpolitical cost.

SKILL DEVELOPMENT5.31 Skill development or inclusive industrialgrowth must address the vast numbers in the unorga-nized sector to improve their productivity. his

will have to be a continuous process, leading toupgradation o skills over a period o time. It wouldrequire revamping technical and vocational trainingwith the help o industry associations. Public-private partnership will be necessary in runningand managing training institutions to meet the gapin skills.

5.32 he Prime Ministers National Council onSkill Development has set a target o reaching out to500 million persons by 2020. Out o 500 million,45 million are expected in the manuacturing sector.

Te ministry/ department-wise targets are: textiles10million, heavy industry10 million, ood processingindustries5 million, micro, small, and Mediumenterprises15 million, and chemicals and ertiliz-ers5 million. Te ambitious nature o these targetsmay be seen by comparing them with the training

capacity o institutes directly under the fve ministries/departments at the beginning o the Eleventh Planwhich was only 3,36,000 per annum.

5.33 Te two main approaches to addressing skilldevelopment targets are coordinating private sectorinitiatives in the skill development sector through theNational Skill Development Corporation (NSDC) andsecondly augmenting existing schemes as well as newprogrammes within the overall strategy outlined bythe National Skill Development Coordination Board(NSDCB) that has been set up to implement thedecisions o the Prime Ministers National Councilon Skill Development.

LABOUR

POLICY

REFORMS

5.34 Economic liberalization and deregulation havebrought closer integration o domestic and interna-tional markets, and have increased competitivepressures on industry. A supportive policy environ-ment can reduce such pressures considerably. It hasgenerally been perceived that rigidity in the labourpolicies o the country codiied in two principallegislationsthe Industrial Dispute Act (IDA), 1947,and the Contract Labour (Regulation and Abolition)Act, 1970, have adversely aected employabilityand employment generation in organized manu-acturing. Regular employment is giving way to

increase in casual and contractual employment.Te shrinking o the regular workorce is a mattero concern and belies the act that benefts o growthhave been inclusive.

5.35 Inclusive growth requires that more and morecitizens are directly included in the growth story,with more people obtaining better employmentopportunities. In the past it was generally perceivedthat labour legislation was a stumbling block whenit came to rationalization o costs (through down-sizing) and that there were inherit inexibilities in the

IDA Act that constrained employers rom achievingoptimum levels o employment and production.However, evidence suggests that downsizing hastaken place in response to market requirementsirrespective o IDA. Tis is in evidence particularlyin the textile sector, which took the major hit


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during the recession when lakhs o workers werelaid o.

5.36 Te other legislation in question, the ContractLabour Act, prohibits contract labour in an industrywhere labour is seen as essential to the main activity.However, contract labour, when employed, helps toreduce costs and aords employment to those whowould otherwise not have got any regular employment.Employers are thereore generally o the view that theContract Labour Act should be amended to distinguishbetween core and peripheral work (the latter beingpermitted to be contracted out). Greater exibility toemploy contract labour should be supplemented withbetter conditions o work, such as a certain minimum

level o pay and duration o work.

5.37 Creation o not only more employment oppor-tunities but also qualitatively better employment needsto be a priority. Te unorganized sector is completelyoutside the purview o most labour laws and thesystem o social security. Inclusive industrializationwill have to create more employment opportunitiesthan hitherto and enable a large portion o the Indianworkorce to move out o the vast unorganized sectorto an expanding organized one (to which socialsecurity is applicable to a large extent). At the sametime, social security will have to be ensured to the

workers in the unorganized sector. Recently, on therecommendation o the NCEUS, the Ministry oLabour notiied the Unorganized Workers SocialSecurity Act, 2008. Measures such as RashtriyaSwasthya Bima Yojana and Aam Aadmi Bima Yojana,and the Old Age Pension Scheme have also beenintroduced.

5.38 Under the Constitution, labour is a subjectin the concurrent list where both central and stategovernments are competent to enact legislation. Con-sequently, there are labour laws enacted by the Central

Government where the Centre is solely responsible ortheir enorcement. Ten there are laws that are enactedby the Central Government and enorced by both thecentral and the state governments. Yet another seto laws are enacted by the Central Government butenorced by the state governments, and fnally there

are laws that are enacted and enorced by the stategovernments. In addition, both the Central Govern-ment and state governments have ormulated rules to

acilitate the implementation o these laws.

5.39 Te states would remain empowered to enactrules to implement the laws and indeed play a moresigniicant role in harmonizing and streamliningprocedures that would make compliance transparentand less arbitrary and stressul. In this context, therecommendations o the Anwarul Hoda Committee(2005) to shi towards sel-certifcation and thirdparty inspections, joint inspections, and a joint annualcalendar o inspections need to be implemented. TeCommittee had also supported proposed amendments

in Labour Laws (Exemption rom Furnishing Returnsand Maintaining Registers by Certain Establish-ments) Act, 1988, which aim to reduce the number oinspections and maintenance o registers as currentlyrequired under various labour laws. Te amendmentsshould be enacted expeditiously.

LANDFOR INDUSTRYAND MINING5.40 Land or industry and mining is becoming moredi cult to obtain and more costly, year aer year.Major industrial projects have been started, whilesome abandoned in several states, because they couldnot get possession o the land intended or them.

Small and micro enterprises have more di cultiesthan large enterprises in obtaining land at economicalrates in suitable locations or industry. Clusters area solution or providing land and inrastructure orsmall enterprises but obtaining land or clusters is alsobecoming di cult and costly.

5.41 Land acquisition and use have become highlycontested and politicized. Land stock is fxed, andwith the growth in population as well growth o theeconomy, need or land is increasing. Te issues raisedare central to the concepts o inclusive growth. Who

should be compensated or the land acquiredonlythe owners on record or also those who depend onthe land or livelihoods even though they are not theowners? In what orm should they be compensated?Outright grants, or stakes in uture appreciation o thevalue obtained rom the alternative use o the land?


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In what manner should rehabilitation be providedso that there is reasonable continuity o incomes orthose displaced? Many land acquisition problems

are occurring in the context o PPPs where land issought to be acquired or projectsor inrastructure,industry, urban renewal, or SEZsin which theprivate sector is involved along with the government.Te people aected would seem to be the missingpartners in the arrangements so ar. Tereore, theissue o land acquisition and its use require that theconcept o PPP be expanded to include another P inthe partnershipthe people aected. Principles haveto be distilled and agreed to or publicpeopleprivatepartnerships and solutions have to be ound quicklyand justly.

5.42 Land acquisition processes that worked earlierdo not work now because not only is the pressure onthe land more, but peoples awareness about theirrights, and their expectations too have changed as thecountry has developed. Te role o the state has alsobecome complicated. Laws that appeared air whenthe land was acquired or public utilities or publicsector enterprises, in which the gains were retainedin the public sphere, do not appear just when thegains go towards the enhancement o the privatewealth o investors. It is worth noting that whilethere are many much-publicized cases o projects

being stalled by problems o land acquisition, thereare also cases, oen in the same states, o land beingobtained by industrialists who have negotiated issueso compensation and rehabilitation directly with thepeople aected.

5.43 Te National Rehabilitation and ResettlementPolicy (NRRP), 2007, aims at striking a balancebetween the need or land or development activitiesand protecting the interests o landowners, tenants,and the landless. Te Rehabilitation and ResettlementBill, 2007, to give a statutory basis to the policy, and

the Land Acquisition (Amendment) Bill, 2007, wereintroduced and passed by the Lok Sabha and reerredto the Rajya Sabha or consideration. However, due tothe dissolution o the ourteenth Lok Sabha, the billshave lapsed. Early reintroduction o these legislationsis essential to set up an appropriate statutory rame-work to address the important areas o land acquisition

and rehabilitation and resettlement. It must be kept inmind that in the absence o new legislation we haveto per orce continue with the existing laws which are

maniestly inadequate.

MINERALS SECTOR

ELEVENTH FIVE YEAR PLAN OBJECTIVES5.44 he Eleventh Five Year Plan aimed at theintensiication o exploration activities or lowvolume-high-value minerals, such as gold, diamonds,base metals, and the platinum group o minerals, andeorts towards augmentation o resources o errous,non-errous, and industrial minerals. Tese objectiveswere to be achieved by encouraging private sector

investment in exploration. Te other objectives othe Plan included restructuring and modernizationo the Geological Survey o India (GSI) in the areaso instrumentation or both ground and airbornesurveys, and acquisition o state-o-the-art laboratoryacilities with high-precision capabilities, and thecreation o a comprehensive portal giving meta-datao the regional exploration work done by GSI andthe scope or investment based on such work. Otherthrusts were the modernization o the Indian Bureauo Mines (IBM) and state directorates or establishingo a national registry and a mineral atlas; adoptiono the United Nations Framework Classiication

(UNFC) system o classifcation o mineral resourcesso as to present reserves/resources o minerals on aninternationally uniorm system to attract more privateinvestment into the sector; development o mineralsin the North-Eastern region; and strengthening R&Dactivities in all aspects o mining.

POLICYINITIATIVESAND STRATEGIES5.45 Te National Mineral Policy, 2008 was approvedby the government and has been tabled in Parliament.Some o the important eatures o this policy are givenin Box 5.4. Te government has initiated a proposal

or amendments/revision o the Mines and Minerals(Development and Regulation) Act based on theNational Mineral Policy, 2008, and the recommenda-tions made by the High Level Committee (HLC) onNational Mineral Policy (Hoda Committee). A billhas to be introduced in Parliament and this shouldbe expedited.


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5.46 A high powered committee on GSI set up inJanuary 2008, submitted its report titled Report onthe unctioning o the Geological Survey o India tothe government on 31 March 2009. Te committeevisualized making GSI a world class geo-scientifcinstitution and made 74 main recommendations,which are beginning to be implemented.

5.47 In order to augment the revenue o mineralproducing states, the Hoda Committee had recom-mended that the method o fxing o royalty should

move decisively to ad valorem rates. Internationally,the ad valorem royalty system is more commonly usedas it has the basic advantage o providing buoyancy torevenues in line with increases in the price o minerals.Based on the recommendations o the study group setup by the Ministry o Mines to consider the revisiono rates o royalty and dead rent o major minerals(excluding coal, lignite, and sand or stowing), thegovernment approved the royalty rates and deadrent and the same were notifed by the Ministry oMines in August 2009. Tese changes have resulted insubstantial increases in royalties to the states, doubling

and tripling them or several, and even more than thator Goa.

5.48 Te FDI policies have been gradually liberalizedin the last ew years. With this, FDI in the miningsector or all non-atomic and non-uel minerals,including diamond and precious stones, has now been

ully opened up to 100 per cent through the automaticroute.

PHYSICAL PERFORMANCE5.49 Speciic production achievements o someimportant mineral-based industries are impressive ascan be seen rom able 5.2.

5.50 Production o selected minerals is given in able5.3. Tis perormance is mixed. Whereas productiono iron ore and manganese has increased, production

o other minerals has not. One reason may be, as in thecase o chromites, that the imposition o export dutyto discourage export o a scarce mineral to conserveit or value adding domestic use, can result in lowerproduction o the raw ore. So long as the countrysindustry gains overall, this decline in one mineral orsector need not be o concern.

5.51 Crude steel production has been increasing and,with it, domestic production o iron ore. However,export realizations rom iron ore exports have declinedrecently. Te value o iron ore exports declined to US$

4.8 billion in 200809 as compared to US$ 5.8 billionin 200708. In the frst hal o 200910, the value oexports o iron ore ell by a urther 34 per cent.

5.52 Modernization and upgradation to provide state-o-the-art laboratory acilities with high-precisioncapabilities was initiated in GSI in the terminal year o

Box 5.4

Some Important Features of the National Mineral Policy, 2008

Seamless and transparent grant o mineral concessions and security o tenure to a holder o a concessionaire. Arms length distances between state agencies that mine and those that regulate. Preerence to value addition industry in grant o mineral concession.

Development o a proper inventory o resources and reservespriority to a mining tenement registry and a mineral

atlas. Strengthening o the Geological Survey o India, the Indian Bureau o Mines, and the State Directorates o Mining and

Geology, with manpower, equipment, and skill sets upgraded to state-o-the-art. Developing a ramework o sustainable development to take care o biodiversity issues.

Special care to protect the interest o host and indigenous (tribal) populations through developing models o stakeholder

interest based on international best practice. Assistance to state governments to overcome the problem o illegal mining through operational and fnancial linkages

with the Indian Bureau o Mines. Developing a comprehensive institutional ramework or R&D and training.

Developing o capital market structures to attract risk investment into survey and prospecting.


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the Ninth Five Year Plan and continued through theenth Five Year Plan. However, progress has remainedslow. Eorts must be made to complete the work inthe Eleventh Plan. Te project or establishing a portal

or dissemination o geo-scientifc inormation is inan advanced stage.

5.53 Several high-cost equipments are being acquiredor enhancing the capabilities o GSI in the feld omarine and airborne surveys. Tese include a BlueWater Research Vessel at an estimated cost o Rs 448crore, a Geotechnical Research Vessel at an estimatedcost o Rs 70.20 crore and a Heliborne GeophysicalSurvey System at cost o Rs 52 crore.

5.54 Te IBM had taken up work in the enth Plan topresent the national mineral inventory in line with theUNFC system to improve the quality o inormationor assessing the economic viability o deposits.

5.55 Te IBM has taken up projects on the computer-ization o the online tenement registry system, whichincludes construction o cadastral and concession

related data. A pilot project has already been initiatedin the two states o Karnataka and Chhattisgarh. Tework must be expedited to attract more investmentin the sector.

5.56 IBM has completed the preparation o theoverlays o mineral and orest maps on 1:50,000scales, with respect to Chhattisgarh, Orissa, Jharkhand,and Andhra Pradesh and preparation o maps orRajasthan has been taken up in the Annual Plan200910. Tese maps are critical to acilitate clear-ance o proposals rom the orest angle, which is acontentious issue.

5.57 In 200708, 56 reconnaissance permits coveringan area o 76,482 sq. km were granted, which indicatesan encouraging response to the policy measures in thesector. Te total number o reconnaissance permitsgranted by state governments as on 31 March 2009was 258 out o which 22 were completed.

5.58 Since the liberalization o the FDI policy, FDIin the mining sector has been increasing. From a total

TABLE 5.2

Physical Performance of Some Important Mineral-Based Industries

S. No. Item Unit 200607 200708 200809 200910 201112

Apr.Dec. Projected

1 Crude Steel Million tonne 50.82 53.86 58.44 52.20* 80.232 Aluminium 000 tonne 1,152.53 1,236.70 1,348.70 1,115.08 1,250.00@

3 Copper cathode 000 tonne 641.70 704.97 640.67 523.94 705.00 (E)4 Zinc (Primary) 000 tonne 380.94 458.23 562.20 455.84 638.005 Lead (Primary) 000 tonne 44.55 58.25 60.32 45.97 95.00

Sources: Joint Plant Committee, Annual Report Ministry of Steel(200809), Ministry o Mines. Working Group Report on MineralExploration and Development (other than coal and lignite), Volume III, or the Eleventh Five Year Plan.Note: E: Estimated.@ Excluding additional capacity o 250 thousand tonnes rom Vedanta Aluminum Limited (VAL) at Jharsuguda, which is undertrial run.* April 2009January 2010.

TABLE 5.3

Production of Selected Minerals, 200607 to 200809

S. No. Item Unit 200607 200708 200809 200910 (Apr.Dec.)

1 Iron Ore Million tonne 187.70 206.45 222.54 156.00

2 Bauxite 000 tonne 15,733 23,085 15,250 10,3883 Chromite 000 tonne 5,296 4,799 3,976 2,5244 Manganese 000 tonne 2,116 2,551 2,695 1,6865 Copper Ore 000 tonne 3,271 3,245 2,983 2,302


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Industry 113

o US$ 6.6 million in 200607, it had increased toUS$ 34.2 million by 200809 and was as much asUS$ 86.6 million in the frst six months o 200910.

In act, the total FDI was US$ 444.3 million in200708most o that accounted or by investmentsby the Vedanta/Sterlite Group.

SUSTAINABLE DEVELOPMENTIN MINING5.59 Mining activities, including exploration, devel-opment, production, and disposal o minerals gener-ally aect the environment and ecology o the minedareas. Tereore, environmental and social concernsmust be addressed sensitively, or which eectivegovernance systems are required to ensure miningin a sustainable manner. In view o this a Sustainable

Development Framework (SDF) appropriate toIndian conditions should be developed as quicklyas possible.

OUTLAYSAND EXPENDITUREINTHEELEVENTH FIVE YEAR PLAN5.60 An outlay o Rs 1,180 crore (GBS) was approvedor the Eleventh Five Year Plan or the Ministry oMines against which the likely expenditure in the frstthree years (200710) o the Plan would be Rs 491crore. Te main shortall is with respect to GSI wherethe procurement process or high-cost equipmentsmentioned earlier is progressing slowly. GBS and

the expenditure or the Ministry o Mines is given inAnnexure 5.2.

AREASOF CONCERN5.61 Illegal mining is rampant in many states. Tisamounts to stealing o public property; it is also anenvironmental hazard. Strong action is required bythe states to check such illegal activities.

5.62 he modernization programme o GSI isprogressing at a very slow pace and needs to beaccelerated.

5.63 Tere is shortage o geo-scientists in the mineralsector due to less intake in the past in GSI and IBMand poor career progression. Steps need to be takenor enhancing the capabilities to ensure aster growthin the sector.

5.64 In spite o step-up o investment in R&D sincethe Ninth Plan, no visible impact or outcome has beennoticed in the sector so ar. More attention is required

to improve perormance.

MINERALS SECTOR: THE PATH AHEAD5.65 Tere is need to improve management capacity atthe central and state government levels. Scientifc andregulatory capabilities o the concerned organizationsmust be strengthened. A sustainable developmentramework must be ormulated.

5.66 More emphasis must be given to scientifc min-ing practices, adequate attention to host populations,including tribals and the poor aected by mining

activities, prevention and detection o illegal mining,and enorcement o mine closure plans.

5.67 Te value chain or mineral processing involvesvarious steps, oen with alternative uses possible atthese steps. Tus there is a trade-o between sales/exports o the raw material or processing it urtheror value addition. Since there are dierent agenciesresponsible or regulations at each step, a compre-hensive ramework has to be ormulated or the mostsustainable use o the countrys mineral resourcesor national development, taking due notice o theconicts o interests o various agencies.

5.68 Investments in the mineral sector, as in anindustry, are aected by the availability o land orprojects and environmental concerns. Laws andpolicies and their administration, must be improved.Mineral sector enterprises must also overcome a largetrust defcit with the social sector. Tereore, theymust voluntarily do much more to address social andenvironmental concerns.

SHAPING FUTURE GROWTH OF THEINDUSTRIAL AND MINERAL SECTOR

BUSINESS ACCOUNTABILITY5.69 Private business enterprises are the principalengines o industrialization in India: the governmentis no longer promoting public sector enterprises inindustry. Its principal role in industry today is to enable


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and regulate the activities o business enterprises inthe private sector to ensure that they may proft andgrow, and meet societal needs too. Tereore, the

government must induce private enterprises to paymore attention to societal concerns o inclusion andenvironmental sustainability.

5.70 Te government intends to continue the processo liberalizing the economy to give more reedom toentrepreneurial energy. Te benefts o this approachare being realized in the aster growth o the economyat rates that are now amongst the highest in the world.Meanwhile societal concerns about the condition othe environment and climate change are increas-ing. Te country wishes to continue on its path o

industrial liberalization and progressive dismantlingo government controls. However, regulation obusiness conduct in some orm cannot be avoided. Ivoluntary regulation is not eective, governments arepressed to step in. Te more eective the industry is atsel-regulation, and the more credible its actions are,the less will be societal pressure on the government tocontrol the industry.

5.71 A movement is growing around the worldwithin businesses themselves, to develop rameworkso accountability that go beyond the responsibility obusiness towards investors and customers to respon-

sibility towards citizens and society. In such triplebottom line rameworks, business organizations areexpected to report to public scrutiny the impact otheir business activities on the environment and oncommunities. Leading Indian companies are part othis international movement.

5.72 his voluntary movement or accountabilitymust be strengthened. It must spread beyond a ewleading frms. Business organizations do not wantmore government control o their activities. Teyresent government imposed reporting requirements,

especially those that are tedious and costly to imple-ment. However, reporting standards developed bybusiness associations themselves, as the new rame-works are, should be acceptable. Te governmentcould work with industry associations and putpressure or the wider adoption o such standards.Tey should not be ootnotes to fnancial accounts.

hey must be ront and centre where they arenoticed.

SHAPING INDUSTRIAL POLICY5.73 Te task o shaping industrial policy is to elicitinormation on signifcant externalities and their rem-edies. As it advances and grows, the industrial sectorbumps into constraints in the economy: it eels thestones underoot, or the pinch in the shoe. Some othe obstacles in the path o industry in Indiapoorinrastructure, inadequate power supply, and theplethora o inspectors and permissions requiredhavebeen mentioned earlier. Te lesson rom all Asiancountries that have rapidly grown strong industries inthe last century is that policymakers must work closely

with industrial managers to solve problems in the pro-duction sphere. In Japan, Miti and Keinderan workedtogether; in Korea, the government and Chaebol; andin China, the party and state-controlled enterprises.In its own way, each produced an institutionalizedprocess o collaboration that created policies resultingin competitive industries. Not only did these countrieschoose strategic sectors in which they believed theycould build competitive advantage, the governmentworked with industry to make it happen. In a worldin which not only companies but states and countriestoo are rated on their competitiveness by internationalagencies, and a world in which all must strive to climb

that scale, the only sustainable source o competitiveadvantage can be a companys or a countrys ability tolearn, change, and improve aster than any potentialcompetition. Tereore, a countrys competitive abil-ity lies in the capability o the collaborative processbetween the producers and policymakers to produceeective policiesand not any particular policy.

5.74 India cannot return to protection to nurtureindustry in India. Nor can India simply copy thecollaborative process used by Japan, Korea, or morerecently China. Its circumstances are dierent and

times have changed. Nevertheless, Indian policymak-ers must fnd ways to improve competitiveness andgrowth o Indian industry. Te processes that willenable policymakers to do so will include consulta-tions not only with large domestic companies that hascharacterized the Asian giants so ar. Te consultationsmust involve those who represent labour rights,


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Industry 115

landowners, and the concerns or the environment;small-scale industries that generate more employ-ment and thus more inclusive growth; and oreign

companies whose investments and technologies canhelp India.

5.75 Industrial policy requires reconciliation o theinterests o many interacting sectors within industry,between several ministries too, and also between states.Te promotion o capital goods industries, so necessaryor the long term, i done through a costly process oprotection, can compromise the growth o domesticuser industries in the short term and thus aectdomestic employment and domestic consumers. Onthe other hand, inverted duty structures in avour o

downstream user industries can distort the industriallandscape, and crimp growth o upstream capital goodsproducers. Tereore, while the tuning-up is beingdone through direct consultations between producersand ministries in their respective sectors, an overview

is always necessary. Te Planning Commission mustcontinue to provide this perspective.

5.76 In conclusion, the key to accelerating broadand deep industrial growth in India within a com-petitive world, is to innovate and improve domesticprocesses or consultation and consensus-building.Tey must work well and work ast. Policymakersand stakeholders must apply themselves to the designand development o these processes to fnd policiesthat will propel inclusive and sustainable industrialgrowth in India. Should India succeed, as it must, thedescription o that process (which will be dierentrom Chinas and the others) and the policies that itwill produce (which cannot be known ex-ante) may

be added by uture economic historians to their listo successes in economic development. Te PlanningCommission will ocus on the improvement o theseprocesses in the remainder o the Eleventh Plan andinto the welh Plan.


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ANNEXURE 5.1

Gross Budgetary Support and Expenditure during the Eleventh Plan (at current prices)

(Rs crore)

S. No. Ministry/Department Eleventh Annual Annual Annual Annual GBS inPlan Gross Plan Plan Plan Plan First FourBudgetary 200708 200809 200910 201011 Years in

Support (GBS) (actual) (actual) (actual) (BE) Eleventh Plan

1 Department o Industrial Policy 4,183.0 925.2 524.8 886.6 1,050.0 3,386.6and Promotion

2 Ministry o extiles 14,000.0 2,211.3 3,824.7 4,221.9 4,725.0 14,982.9(A) Village and Small Enterprise 3,000.0 588.4 697.7 771.0 1,356.0 3,413.1(B) Industry 11,000.0 1,622.8 3,127.0 3,450.9 3,369.0 11,569.7

3 Department o Heavy Industry 4,093.0 82.4 191.7 157.1 370.0 801.24 Department o Fertilizers 1,492.0 37.5 40.3 199.7 215.0 492.55 Ministry o Steel 217.0 70.0 0.0 7.1 36.0 113.16 Department o Public Enterprises 54.0 9.0 8.3 7.6 10.5 35.47 Ministry o Corporate Aairs 211.0 0.0 63.0 33.0 40.0 136

8 Department o Chemicals 563.8 90.1 139.8 402.9 400.0 1,032.89 Department o Pharmaceuticals 1,396.2 76.6 110.1 102.2 165.0 453.9

10 Department o Food Processing 4,031.0 183.0 223.1 277.5 400.0 1,083.6Industries

11 Ministry o MSME 11,500.0 1,101.4 1,659.6 1,376.6 2,400.0 6,537.6

ANNEXURE 5.2

Gross Budgetary Support and Expenditure during the Eleventh Plan, Ministry of Mines

(at current prices)

(Rs crore)

S. No. Organization/PSU Eleventh Plan Annual Annual Annual Likely ExpenditureGross Budgetary Plan Plan Plan in First 3 Years

Support 200708 200809 200910 o the(GBS) (RE) Eleventh Plan

1 Geological Survey o India 1,020.00 119.94 133.80 143.00 396.74(Including Construction)

2 Indian Bureau o Mines 90.00 16.06 20.44 20.00 56.50

(Including Construction)3 Mineral Exploration Corporation 50.00 11.00 9.00 10.00 30.00

Limited (Promotional)4 Science & echnology Programme 20.00 1.75 3.00 3.00 7.75

otal 1,180.00 148.75 166.24 176.00 490.99

Source: Ministry o Mines.

midterm appraisal industry

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