P rin te dat : A ra va li P rin te rs & P ub lish e rs P v t. L td

ANNUAL REPORT 

2006-07 

GOVERNMENT OF INDIA 

MINISTRY OF COMMERCE AND INDUSTRY 

DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION

CONTENTS 

CHAPTER 

PAGE 

1 Role and Functions of the Department of Industrial Policy & Promotion 5 

2 2006-07 : Highlights and Review 10 

3 Evolution and Development of Industrial Policy 21 

4 Secretariat for Industrial Assistance 24 

5 Foreign Direct Investment 34 

6 Industrial Infrastructure and Development Schemes 40 

7 Performance of Select Industries 49 

8 Attached, Subordinate offices and Other Organisations 79 

9 Training, Research and Design Institutes 95 

10 International Cooperation and UNIDO 116 

11 Representation of Scheduled Castes/Scheduled Tribes/OBCs/ 

Ex-servicemen and Physically Disabled persons in Service 127 

12 Women Welfare Activities 128 

13 Use of Official Language 129 

14 Vigilance Activities 132 

15 Gender Budgeting 134 

16 Citizens’ Charter 135 

Annexure 140 

Appendix I-XIII 141

Department of Industrial Policy & Promotion 

1ROLE AND FUNCTIONS OF THE DEPARTMENT 

OF INDUSTRIAL POLICY & PROMOTION 

The Department of Industrial Policy 

& Promotion, established in 1995, is 

responsible for the formulation and 

administration of overall Industrial Policy. 

In the year 2000, the Department of 

Industrial Development was merged with 

this Department. 

With the progressive liberalisation of 

the Indian economy, initiated in July 

1991, there has been a consistent 

expansion in the role and functions of this 

Department. From regulation and 

administration of the industrial sector, the 

role of this Department has been 

transformed into facilitation of technology 

and investment flows and promotion of 

industrial development in the liberalised 

environment. 

The role and functions of the 

Department of Industrial Policy and 

Promotion primarily include: 

v 

Formulation and implementation of 

industrial policy and strategies for 

industrial development in conformity 

with the developmental needs and 

national objectives in order to make 

v 

v 

v 

v 

the Indian industry internationally 

competitive; 

Monitoring and stimulation of 

industrial growth in general, and 

performance of industries specifically 

assigned to it, in particular, and 

guidance in the creation of an 

enabling environment, infrastructure, 

technology transfer/ 

collaborations on all industrial and 

technical matters; 

Approval of foreign technology 

collaborations at enterprise level and 

formulation of policy parameters for 

the same, for enhancing productivity, 

with reference to international 

benchmarking; 

Formulation of Foreign Direct 

Investment (FDI) Policy and 

amendments thereto as well as 

promotion and facilitation of direct 

foreign and non-resident investment 

in industrial and service projects; 

Association as nodal department for 

investment-related issues in 

5


The Department of Industrial 

Policy & Promotion administers the 

following Central Legislations through 

its attached/subordinate offices and 

statutory organizations: 

a. Central legislations relating to 

Intellectual Property Rights (IPRs), 

namely, the Patents Act, 1970 the 

Trade Marks Act, 1999, the 

Geographical Indications of Goods 

(Registration and Protection) Act, 

1999 and the Designs Act, 2000 

and their associated rules are 

administered through the Office of 

the Controller General of Patents, 

Designs and Trade Marks 

(CGPDTM). The Intellectual 

Property Appellate Board provided 

under the Trade Marks Act, 1999 

has been set up in Chennai. 

b. The Explosives Act, 1884 is 

administered through the 

Petroleum & Explosives Safety 

Organisation. 

c. The Salt Cess Act, 1953 is 

administered through the Office of 

the Salt Commissioner. 

d. The Indian Boilers Act, 1923 is 

administered through the Indian 

Boiler Regulations, 1950 framed 

by the Central Boilers Board, 

which is a statutory body under 

the said Act. Enforcement of this 

Act is the responsibility of both the 

State and Union Governments 

since the subject “Boiler” is listed 

in the concurrent list of the 

Constitution of India. 

v 

Bilateral/Regional Economic 

Cooperation Agreements; 

Formulation of policies relating to 

Intellectual Property Rights in the 

fields of Patents, Trademarks, 

Industrial Designs and Geographical 

Indications of Goods and 

administration of regulations and 

rules made thereunder; 

v Administration of Industries 

(Development & Regulation) Act, 

1951; 

v 

Promotion of Industrial development 

of industrially backward remote, hilly 

and inaccessible areas of the special 

category States of North-Eastern 

Region (including Sikkim), Jammu & 

Kashmir, Himachal Pradesh and 

Uttarakhand through special 

incentive packages; 

v Promotion of international 

cooperation through productivity, 

quality and technical cooperation; 

v 

v 

Compilation of data/statistics on 

Foreign Direct Investment & analysis 

thereof; and 

Compilation of monthly industrial 

production statistics for use in the 

construction of Index of Industrial 

Production (IIP). 

Industrial Policy 

The Department is responsible for 

formulation and implementation of 

6


promotional and developmental measures 

for growth of the industrial sector, keeping 

in view the national priorities and socioeconomic 

objectives. While individual 

Administrative Ministries look after the 

production, distribution, development and 

planning aspects of specific industries 

allocated to them, this Department is 

responsible for the overall Industrial 

Policy. 

The Department monitors industrial 

growth and production in general and in 

selected industrial sectors such as 

cement, paper and pulp, leather, tyre and 

rubber, light electrical industries, 

consumer goods, consumer durables, light 

machine tools, light industrial machinery, 

light engineering industries, etc. 

Appropriate policy interventions are made, 

as required by concerns emerging, from 

time to time. 

Foreign Direct Investment (FDI) 

The Department is assigned the 

function of Foreign Direct and Non- 

Resident investments in the industries and 

service sectors. 

The Department is responsible for 

formulation of FDI policy, and facilitation 

and promotion of the FDI inflow into the 

country. The Department plays a pro-active 

role in the resolution of problems faced by 

foreign investors in the implementation of 

their projects through Foreign Investment 

Implementation Authority (FIIA), which 

interacts directly with the investors along 

with the Ministry/State Government 

concerned. 

In tune with its role as a facilitator of 

industrial development and investment, 

this Department plays an active role in 

investment promotion through 

dissemination of information on 

investment climate and opportunities in 

India and by advising prospective investors 

about investment policies and procedures. 

The information about policy and 

procedures are available at the website 

(www.dipp.nic.in) of the Department. 

This Department also encourages 

Indian companies in acquisition of 

technological capability in various sectors 

of the industry through a liberal foreign 

technology collaboration regime. Foreign 

technology induction is facilitated both 

through FDI and through Foreign 

Technology Collaboration (FTC) agreement. 

The Department is associated as a nodal 

point for issues related to investment and 

economic cooperation in Bilateral/Regional 

Economic Cooperation Agreements. This 

Department is actively associated in the 

negotiations on Bilateral Investment 

Promotion and Protection Agreements with 

various countries. 

Intellectual Property Rights 


and Promotion is responsible for 

Intellectual Property Rights relating to 

Patents, Designs, Trade Marks and 

Geographical Indications of Goods, and 

oversees the initiatives relating to their 

protection and promotion. These include 

outlining of policy and its implementation 

through the Office of the Controller 

General of Patents, Designs and Trade 

7


Marks. It promotes awareness regarding 

protection of the Intellectual Property 

Rights inherent in industrial property in 

conjunction with the World Intellectual 

Property Organisation (WIPO) and apex 

industry associations apart from similar 

initiatives involving regional industry 

associations. It also provides inputs on 

various issues relating to the Agreement 

on Trade-Related Aspects of Intellectual 

Property Rights (TRIPS) concerned with 

World Trade Organization (WTO) in these 

fields. 


and Promotion is now the nodal 

Department for WIPO as per the 

amendment to Government of India 

(Allocation of Business) Rules, 1961 dated 

1st September 2005 

Productivity And Quality 

This Department is the nodal 

organisation for the promotion of productivity 

in the industrial sector. It undertakes 

programmes of technical cooperation with 

the Asian Productivity Organisation (APO), 

Tokyo by sourcing experts to advise on 

productivity-related projects and by deputing 

officials from the private and public sector 

to programmes conducted by the APO in 

industry, agriculture and service-related 

sectors. It also promotes the adoption of 

quality standards relating to the ISO 9000/ 

14000 series through the accreditation 

services provided by National Boards for 

Certifying Bodies and Auditors and Trainers 

under the Quality Council of India, which 

has been certified by international 

accreditation bodies. 

International Cooperation 

International Cooperation for 

industrial partnerships is achieved 

through both bilateral and multilateral 

arrangements. At bilateral level, in 

addition to being nodal Department for 

Indo-Swedish, Indo-Libyan, Indo- 

Hungarian, Indo-Poland and Indo–Belarus 

Joint Commissions, the Department is 

represented on joint commissions and 

joint working groups for promoting 

industrial, technical and scientific 

cooperation with select countries, serviced 

by other Ministries/Departments. Similar 

initiatives are also in place with the 

European Union and the ASEAN. This 

Department also coordinates with apex 

Industry Associations such as the FICCI, 

the CII and the ASSOCHAM in their 

activities relating to promotion of 

industrial cooperation both through 

bilateral and multilateral initiatives and 

to stimulate inflow of foreign direct 

investment into India besides participating 

in the Joint Business Councils and other 

interactive sessions organised by them. 

This Department is the nodal 

Department in Government of India for 

coordinating and implementing 

programmes with the United Nations 

Industrial Development Organization 

(UNIDO) in India. UNIDO is a specialized 

agency of United Nations with a mandate 

to act as the central coordinating body for 

industrial activities within the United 

Nations system. India has been an active 

member of the organization since its 

inception. Under the Country Service 

Framework, the activities of UNIDO in India 

8


are to be focussed in the fields of 

strengthening the competitiveness of 

industry through technology up-gradation, 

promotion of investments and cleaner and 

environmentally sustainable technologies. 

Schemes For Industrial and 

Infrastructure Development 

This Department administers 

Industrial Infrastructure Upgradation 

Scheme (IIUS) for enhancing the 

competitiveness of the domestic industry 

by providing quality infrastructure through 

public-private partnership in selected 

functional clusters. Central assistance 

upto 75% of the project cost subject to a 

maximum of Rs. 50 crore is provided under 

the Scheme. 

Monitoring 

This Department monitors the 

industrial sector through information on 

Industrial Entrepreneurs’ Memorandum 

(IEM), Industrial Licence, Direct industrial 

licence, Letter of Intent (LOI), Foreign 

Investment Data and inflows, and 

industrial production returns. The 

Department also coordinates the progress 

of ‘infrastructure sectors’ approved for 

investment/technology transfer, 

promotion of private investment including 

foreign investment in the infrastructure 

sector. This Department also compiles and 

prepares index of production of 6 coreinfrastructure 

industries on a monthly 

basis. 

The organization chart of the 


Promotion is at Appendix I. 

List of attached/subordinate offices 

and other organisations under the 

Department of Industrial Policy & 

Promotion is at Appendix-II. 

9

22006-07 : HIGHLIGHTS AND REVIEW 


Industrial policy reform is a 

continuous process. The task of reform 

has been further intensified, widened and 

deepened during the year. Industry has 

shown greater momentum and vibrancy 

during the year. Manufacturing sector 

growth led the overall industrial growth. 

The manufacturing sector grew by 11.8 

per cent during April-December in the 

year 2006-07 as measured by the Index 

of Industrial Production (IIP) (base : 

1993-94=100). Manufacturing gross 

domestic product (GDP) grew by 11.3 per 

cent during 2006-07 (Advance estimate) 

compared to overall GDP growth of 9.1 

per cent during 2005-06. 

Current Industrial Performance 

The period April–December 2006 in 

the current financial year, saw one of the 

highest industrial growth rates ever since 

the industrial liberalisation process was 

set in motion in 1991. This period has 

witnessed an industrial growth rate of 

10.8 per cent as compared to 8.0 per cent 

in the corresponding period of the 

previous year. The manufacturing sector, 

which has a weightage of 79.4 per cent 

in the IIP, recorded a robust growth of 

11.8 per cent during the same period as 

compared to 9.0 per cent in the 

corresponding period of the previous year. 

The mining & quarrying and the 

electricity sub-sectors of the IIP registered 

higher growth rates of 3.9 per cent and 

7.5 per cent, respectively as compared to 

0.5 per cent and 4.8 per cent during the 

corresponding period of the previous year. 

This growth is pronounced towards the 

capital goods sector, which grew at 17.5 

per cent, while the consumer goods sector 

registered a growth of 9.5 per cent during 

this period. Comparative growth rates for 

these sectors from 2001-02 are given in 

Table 2.1. 

Use-Based Industrial Classification 

Use-based classification reveals that 

consumer goods sector registered a 

growth of 9.5 per cent during April- 

December 2006-07 on the back of a 12.5 

per cent growth for the same period last 

10


Table 2.1 

Growth Rate of Industrial Production by Major Sectors (%) 

Period Mining & Manufacturing Electricity Overall 

Quarrying 

Weight 10.5 79.4 10.2 100.0 

2001-02 1.2 2.9 3.1 2.7 

2002-03 5.8 6.0 3.2 5.7 

2003-04 5.2 7.4 5.1 7.0 

2004-05 4.4 9.2 5.2 8.4 

2005-06 1.0 9.1 5.2 8.2 

2005-06 (Apr-Dec) 0.5 9.0 4.8 8.0 

2006-07 (Apr-Dec) 3.9 11.8 7.5 10.8 

Source: Central Statistical Organisation 

year. Consumer durable goods sub-sector 

has shown an impressive growth of 11.4 

per cent during April-December 2006-07 

on top of 13.9 per cent increase in the 

same period last year. The consumer nondurable 

goods sub-sector has posted a 

growth of 8.9 per cent in April-December 

2006-07 compared with a growth of 12.0 

per cent in the same period of the 

previous year. As these figures show, the 

consumer goods sector has posted 

somewhat lower growths during April- 

December 2006, though the growth rates 

by themselves are quite high. Basic and 

intermediate goods sectors, on the other 

hand, have posted higher growth of 9.7 

per cent and 11.1 per cent respectively 

during April-December 2006-07 

compared with growth of 6.1 per cent and 

2.3 per cent in the same period of the 

previous year. 

Capital goods sector, which had 

posted a robust growth of 15.8 per cent 

in 2005-06, has maintained its growth 

momentum during the current year as 

well. This sector posted a growth of 17.5 

per cent during April-December 2006-07 

on the back of a 15.7 per cent growth 

during the same period of the previous 

year. This has been possible due to new 

investment and capacity addition by the 

industry. This augurs well for the future 

growth of Indian industry because plants, 

machinery and mother goods, which 

constitute this sector, are needed for 

further production. 

Comparative growth rates of 

industrial production based on use-based 

classification from 2001-02 onwards are 

given in the Table 2.2. 

Growth Performance: At 2-Digit 

Level of Industrial Classification 

At the 2-digit level of industrial 

classification, Sixteen out of Seventeen 

11


Table 2.2 

Growth of Industrial Production by Use Based Classification (%) 

Sectors Weight 2001 2002 2003 2004 2005 2005 2006 

-02 -03 -04 -05 -06 -06 -07 

(Apr-Dec) 

Basic Goods 35.6 2.6 4.9 5.4 5.5 6.7 6.1 9.7 

Capital Goods 9.3 -3.4 10.5 13.6 13.9 15.8 15.7 17.5 

Intermediate Goods 26.5 1.5 3.9 6.4 6.1 2.5 2.3 11.1 

Consumer Goods 28.7 6.0 7.1 7.1 11.7 12.0 12.5 9.5 

(i) Durables 5.4 11.5 -6.3 11.6 14.4 15.3 13.9 11.4 

(ii) Non-durables 23.3 4.1 12.0 5.8 10.8 11.0 12.0 8.9 

Overall 100.0 2.7 5.7 7.0 8.4 8.2 8.0 10.6 


industry groups recorded positive 

growths during April-December 2006-07. 

Prominent among the industry groups 

showing positive growth in production are 

basic metals & alloys industries (21.4%), 

transport equipment and parts (15.6%), 

machinery and equipment (13.9%), nonmetallic 

mineral products (13.8%), cotton 

textile (13.7%), rubber, plastic, petroleum 

and coal products (12.0%). 

Comparative growth rates for the 2- 

digit industry groups from 2001-02 

onwards are given in the Table 2.3. 

Performance of Infrastructure 

Industries 

For sustaining high growth in the 

industrial sector, quality infrastructure 

is indispensable. Six core industries (i.e. 

electricity, crude petroleum, petroleum 

refinery products, coal, steel and cement) 

with a total weightage of 26.68 per cent 

in overall Index of Industrial Production 

(IIP), grew by 8.3 per cent during April- 

December 2006-07 as compared to 5.5 

per cent registered during the 

corresponding period of last year. 

Individually, each of the six sectors has 

registered positive growth rate. During 

the period, crude petroleum, petroleum 

refinery products, and electricity sectors 

have registered higher growth rates as 

compared to the corresponding period of 

last year. 

During April-November 2006-07, 

petroleum refinery products, cement, 

finished (carbon) steel, electricity 

generation, crude petroleum and coal 

sector registered growth of 13.5 per cent, 

9.9 per cent, 9.7 per cent, 7.5 per cent, 

6.0 per cent and 4.5 per cent, respectively. 

12


Table 2.3 

Growth of Industrial Production at 2-Digit Group Level (%) 

Code Industry Group Weight 2001 2002 2003 2004 2005 2005 2006 

-02 -03 -04 -05 -06 -06 -07 

Apr-Dec 

20-21 Food Products 9.08 -1.6 11.0 -0.5 -0.4 2.0 -3.2 2.8 

22 Beverage, Tobacco 2.38 12.2 27.9 8.5 10.8 15.7 17.1 11.1 

& related Products 

23 Cotton Textiles 5.52 -2.2 -2.7 -3.1 7.6 8.5 10.2 13.7 

24 Wool, Silk and Man- 2.26 4.4 3.0 6.8 3.5 0.0 0.5 7.9 

made Fibre Textiles. 

25 Jute, and other 0.59 -5.9 8.3 -4.2 3.7 0.5 2.7 0.9 

Vegetable Fibre Textiles 

26 Textile Products 2.54 2.4 14.4 -3.2 19.2 16.3 19.4 11.2 

27 Wood & Wood 2.70 -11.0 -17.6 6.8 -8.4 -5.7 -3.7 5.4 

Products & Furniture 

& Fixtures. 

28 Paper & Paper 

Products 2.65 3.0 6.8 15.6 10.5 -0.9 0.9 8.7 

29 Leather & 1.14 5.3 -3.2 -3.9 6.7 -4.8 -2.0 -1.6 

Fur Products 

30 Basic Chemicals 

& Chemical Products 

(except Petroleum 

Products & Coal) 14.00 4.8 3.7 8.7 14.5 8.3 10.4 9.6 

31 Rubber, Plastic, 

Petroleum and 

Coal Products. 5.73 11.1 5.5 4.5 2.4 4.3 3.9 12.0 

32 Non-metallic mineral 4.40 1.1 5.1 3.7 1.5 11.0 9.0 13.8 

33 Basic Metals & 

Alloy Industries 7.45 4.3 9.2 9.2 5.4 15.8 15.1 21.4 

34 Metal Products & Parts 

except machinery 

& equipments. 2.81 -10.0 6.4 3.7 5.7 -1.1 -2.5 8.7 

35-36 Machinery and 

Equipment other 

than Transport 

equipment 9.57 1.3 1.6 15.8 19.8 12.0 10.8 13.9 

37 Transport Equipment 

& parts 3.98 6.8 14.6 17.0 4.1 12.7 12.2 15.6 

38 Other Manufacturing 

Industries 2.56 8.9 0.1 7.7 18.5 25.2 23.7 11.4 

1 Mining & Quarrying 10.47 1.2 5.8 5.2 4.4 1.0 0.5 3.9 

2-3 Manufacturing 79.36 2.9 6.0 7.4 9.2 9.1 9.0 11.8 

4 Electricity 10.17 3.1 3.2 5.1 5.2 5.2 4.8 7.5 

Overall Index 100.00 2.7 5.7 7.0 8.4 8.2 8.0 10.8 


13


Table 2.4 

Trends in Growth Rates of Infrastructure Sector (%) 

Industry Weight 2002 2003 2004 2005 2005 2006 

-03 -04 -05 -06 -06 -07 

Apr-Dec Apr-Dec 

Core infrastructure industry 

i. Electricity generation 10.2 3.2 5.1 5.2 5.1 -6.0 6.0 

ii. Coal 3.2 4.6 5.1 6.4 6.4 0.5 12.6 

iii Finished (Carbon) Steel 5.1 7.3 9.8 8.4 11.2 6.2 4.5 

iv. Crude petroleum 4.2 3.4 0.7 1.8 -5.3 4.8 7.5 

v. Petroleum refinery products 2.0 4.9 8.2 4.3 2.1 10.9 9.9 

vi. Cement 2.0 8.8 6.1 6.6 12.3 10.7 9.7 

Overall 26.7 5.0 6.1 5.8 6.1 5.5 8.3 

Source: Office of the Economic Adviser, Department of Industrial Policy & Promotion. 

Comparative growth rates for the six 

infrastructure industries from 2002-03 

onwards are given in the Table 2.4. 

Major Policy Initiatives 

Some of the important policy 

measures announced and procedural 

simplifications undertaken are given 

below: 

Industrial Park Scheme 

Industrial Park Scheme being operated 

by the Department was first notified on 30 

March 1999 and revised on 1 December 

1999. Another revision had taken place on 

1 April 2002 covering period till 31 March 

2006. In pursuance of Finance Minister’s 

Budget Speech (Budget 2006-07), the 

Scheme is being extended till 31 March 

2009. Under this Scheme, income tax 

exemption for 10 consecutive years out of 

15 years period is allowed to the developers 

of industrial parks. 

Reservation for Small-Scale Sector 

Reservation of items of manufacture 

exclusively for the small-scale sector forms 

an important focus of the industrial policy 

as a measure of protecting this sector. Since 

24 December 1999, industrial undertakings 

with an investment upto Rs.1 crore in plant 

and machinery are covered within the small 

scale and ancillary sector. A differential 

investment limit of Rs. 5 crore has been 

prescribed for 140 items as well as all items 

of drugs and pharmaceuticals vide 

Notifications dated 9 October 2001, 5 June 

2003, 13 October 2004 and 21 February 

2006. The investment limit for tiny units is 

Rs. 25 lakh. 

At present, 326 items are reserved for 

manufacture in the small-scale sector. 

Undertakings other than the small scale 

industrial undertakings, that are engaged 

in the manufacture of any of these items 

are required to obtain an industrial license 

and undertake an export obligation of 50% 

of the annual production. This condition 

14


of licensing is, however, not applicable to 

the undertakings operating under 100% 

Export-Oriented Undertakings Scheme, the 

Export Processing Zone (EPZ) or the Special 

Economic Zone Scheme (SEZ). 

Changes made in the FDI Policies 

during 2006 

A comprehensive review of the FDI 

policy was undertaken for the first time in 

the last 15 years, with a view to consolidate 

the liberalisation already effected, and 

further rationalise the FDI policy governing 

various activities. 

As a result of this exercise, the 

following major policy changes have been 

notified vide Press Note: 4 (2006 Series). 

i. Change of route - FDI has been 

allowed up to 100 per cent under the 

automatic route for distillation and 

brewing of potable alcohol; 

manufacture of industrial explosives; 

manufacture of hazardous 

chemicals; manufacturing activities 

located within 25 km of the Standard 

Urban Area limits requiring 

industrial license under the IDR 

(Act), 1951; setting up of greenfield 

airport projects; laying of natural 

gas/LNG pipelines, market study & 

formulation and investment 

financing in the petroleum sector; 

and cash & carry wholesale trading 

and export trading. 

ii. 

Increase in equity caps - FDI caps 

have been increased to 100 per cent 

and automatic route extended to coal 

iii. 

& lignite mining for captive 

consumption, setting up 

infrastructure relating to marketing 

in Petroleum & Natural Gas sector, 

and exploration and mining of 

diamonds and precious stones. 

FDI in new activities - FDI has been 

allowed up to 100 per cent on the 

automatic route in power trading, and 

processing and warehousing of coffee 

and rubber. FDI has been allowed up 

to 51 per cent for ‘single brand’ product 

retailing which requires prior 

Government approval. Specific 

guidelines have been issued for 

governing FDI for ‘single brand’ 

product retailing. 

iv. Removal of restrictive conditions - 

Mandatory divestment condition for 

B2B e-commerce has been dispensed 

with. 

v. Procedural simplification - The 

transfer of shares from resident to 

non-residents including acquisition of 

shares in an existing company has 

been placed on the automatic route 

subject to sectoral policy on FDI. 

vi 

Equity caps on FDI are presently 

only on limited sectors viz. 

q 

q 

Up to 20% - FM Radio 

Broadcasting. 

Up to 26% - Insurance, Defence 

production, Petroleum refining 

in the PSUs; Print and 

Electronic media covering news 

& current affairs. 

15


q 

q 

q 

Up to 49% - Air Transport 

Services; Asset Reconstruction 

Companies; Cable network; 

DTH; Hardware for uplinking, 

HUB, etc 

Up to 51% - Single Brand 

Retailing of products. 

Up to 74% - Atomic Minerals; 

Private Sector Banking; Telecom 

services; Establishment & 

operation of Satellites. 

FDI Policy in the Agriculture & 

Plantation Sector 

Agriculture & Plantations was removed 

from the list of prohibited sectors for FDI 

and the activities permitted within these 

sectors were included in the sector-specific 

policy vide Press Note: 4 (2006). 

As per the present policy, FDI in agriculture 

is not permitted except in floriculture, 

horticulture, development of seeds, animal 

husbandry, pisciculture, aqua-culture, and 

cultivation of vegetables & mushrooms 

under controlled conditions, and for 

services related to agro and allied sectors, 

where FDI upto 100% is permitted under 

the automatic route. 

FDI up to 100 per cent with prior 

Government approval is permitted in Tea 

plantation subject to the conditions of 

divestment of 26 per cent equity of the 

company in favour of an Indian partner/ 

Indian public within a period of five years; 

and prior approval of the State Government 

concerned in case of any future land use 

change. 

FDI Promotion Initiatives 

Several steps have been initiated to 

facilitate increased FDI inflows which 

include, inter-alia, the following measures. 

i. On the policy front, while the FDI 

policy is already quite liberal, the 

policy is being further progressively 

rationalised. Equity cap in civil 

aviation (air transport), has recently 

been raised as a measure of further 

liberalisation of policy. 

ii. 

iii. 

iv. 

On the investment promotion front, 

the Department organises Destination 

India events in association with 

the Confederation of India Industries 

(CII) and the Federation of Indian 

Commerce and Industry (FICCI). 

The Foreign Investment Implementation 

Authority (FIIA) has been active 

towards speedy resolution of 

investment-related problems. 

National Manufacturing Competitiveness 

Council (NMCC) has been 

set up to provide a continuing forum 

for policy dialogue to energise and 

sustain the growth of manufacturing 

industries. NMCC has submitted its 

report. 

v. The Department has regular 

interaction with foreign investors. 

Such interactions have been held in 

bilateral/ regional/ international 

meets such as Indo-ASEAN, Indo-EU, 

16


Indo-Japan, etc. Meetings with 

individual investors were also held on 

a regular basis. 

vi. The Departments website 

(www.dipp.nic.in) has been made 

both more comprehensive and 

informative with online chat facility. 

About 4500 investment-related 

queries were replied during the year. 

Investment Climate 

Investment climate, apart from the 

policy framework, is shaped by a number 

of parameters, which include macroeconomic 

environment and a host of 

variables like taxes, inflation, interest rates, 

exchange rate, capital market, etc. Also, 

performance of infrastructure and level of 

public investment have a bearing on private 

investment. 

There are a number of positive 

developments in the macro indicators in 

the Indian economy which augur well for 

the investment climate in the country. 

The estimates of National Income 

released by CSO show that GDP (at 1999- 

2000 constant prices at factor cost) 

originating from industrial sector grew by 

10.0 per cent during 2006-07 (Advance 

Estimate) as compared to 9.6 per cent during 

the corresponding period last year. 

Manufacturing sector grew by 11.3 per cent 

during 2006-07 as compared to 9.1 per cent 

during the corresponding period last year. 

The Quick Estimates released by the 

Central Statistical Organisation (CSO) 

show rise in aggregate investment in the 

economy. As per CSO’s Press Release, 

dated 31.01.2007, the Gross Capital 

Formation (GCF) as a percentage of GDP 

at current prices, which is a measure of 

investment, improved to 33.8 per cent in 

2005-06 compared to 31.5 per cent in 

2004-05. 

Foreign exchange reserves is another 

factor which influences investment climate. 

India’s forex reserves had touched US $ 

151.62 billion by the end of March 2006. 

It has increased to US $ 193.12 billion on 

23 February 2007. The continued surge in 

forex reserves reflects continued inflow of 

foreign capital, investors’ confidence and 

good performance of exports. 

On the investment front, the data 

available from Secretariat for Industrial 

Assistance (SIA) show that the total amount 

of proposed investment intentions (Letter 

of Intents, Industrial Entrepreneurs’ 

Memorandum and Direct Industrial 

Licenses) during April-January of 2006-07 

stood at Rs. 6,29,750 crore compared to 

Rs. 3,02,518 crore during the 

corresponding period of the previous year, 

representing a growth of 108 per cent. 

A vibrant capital market is an indicator 

of investment activity. As per SEBI Bulletin, 

during April-December of 2006-07 the 

resources raised by the corporate sector 

from primary market through Public Issues 

and Rights Issues were higher at Rs. 25,055 

crore as compared to Rs. 19,378 crore in 

the corresponding period of the previous 

year. Of the total resources mobilised during 

April-December of 2006-07, the amount 

17


mobilised through Public Issues was Rs. 

22,001 crore and through Rights Issues was 

Rs. 3,054 crore. 

FDI inflows (equity capital 

components only) during the period April- 

December of 2006-07 had been US$ 9,272 

million against US$ 3,697 million in the 

corresponding period last year. This 

represents an increase of 151 per cent. This 

is a reflection of the confidence that foreign 

investors repose in the Indian economy. 

Investment in embodied form is 

reflected in the production of capital goods 

like machinery, equipments, tools, etc. The 

capital goods sector, with a weight of 9.3 per 

cent in the IIP (base year 1993-94=100), 

posted a strong growth of 17.5 per cent 

during April-December of 2006-07 over an 

already high growth of 15.7 per cent during 

the corresponding period last year. The 

strong performance of the capital goods 

sector coupled with increased imports of 

capital goods augurs well for domestic 

capacity expansion in large number of 

industries. 

The month-wise profile of growth in 

the capital goods sector along with the 

overall growth in the manufacturing and 

the lIP growth in general is given in 

Table 2.5. 

Index Numbers of Wholesale Prices 

The index numbers of wholesale prices 

in India are being compiled and 

Table 2.5 

Index of Industrial Production Growth Rate (%) (Base : 1993-94=100) 

Month/ Year General Manufacturing Capital Goods 

2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 

April 8.1 9.9 9.2 11.0 14.6 19.6 

May 10.8 11.7 11.3 13.3 13.4 21.4 

June 12.2 9.7 13.2 10.7 13.5 21.6 

July 4.7 13.2 6.0 14.3 14.9 18.3 

August 7.6 10.3 8.5 11.9 12.9 16.6 

September 7.2 12.0 8.9 12.7 22.8 9.5 

October 9.8 4.4 10.9 3.8 24.3 4.2 

November 6.0 15.4 7.0 16.7 11.5 29.2 

December 5.7 11.1 6.4 11.9 12.9 20.2 

April-December 8.3 10.8 9.0 11.8 15.7 17.5 

The latest available data are till December 2006. 

Note: Growth rates for 2005-06 are given till December for consistency with the latest data 

available for 2006-07 i.e., till December 2006. 

Source: Central Statistical Organization 

18


disseminated by the Office of Economic 

Adviser since 1942 on a weekly basis. The 

current series of Wholesale Price Index (WPI) 

numbers (base year 1993-94=100) is being 

regularly published since April 1994. Based 

on the weekly WPI numbers, monthly and 

annual index numbers are also worked out 

taking simple averages of weekly and 

monthly indices, respectively. 

The year 2005-06 ended with a WPI 

of 195.6 (final) on 52-week average basis 

against 187.3 (final) in 2004-05 resulting 

in an inflation rate of 4.43 per cent as 

compared to 6.48 per cent in 2004-05. 

During 2006-07 (April-December), the 

average monthly inflation rate has 

fluctuated between a low of 3.86 per cent 

for April and a high of 5.51 per cent for 

October 2006. The average provisional 

inflation for December 2006 was 5.43 per 

cent. 

During the first nine months (April- 

December 2006) of the financial year 

2006-07, the average ‘All-Commodity’ 

inflation rate works out to 5.07 per cent 

(provisional) as compared to 4.55 per cent 

during the corresponding period in the 

previous year. 

The rise in the overall inflation rate 

during the current financial year was 

mainly due to rise in the prices of primary 

articles and due to base effect of lower 

prices in the previous year. 

To contain inflation expectations, 

Reserve Bank of India in its Mid-term 

Review of Annual Policy Statement for 

the year 2006-07 (published on 

31October 2006), decided to increase the 

cash reserve ratio (CRR) by 50 basis 

points in two stages (25 basis points 

each on 23 December 2006 and 6 

January 2007). The CRR for the 

fortnight beginning 23 December 2006 

was 5.25 per cent and the same for the 

fortnight beginning, 6 January 2007 was 

5.50 per cent. 

For the week ended 30 December 

2006, the WPI for ‘All Commodities’ stood 

at 208.1 (provisional) resulting in an 

annual inflation rate (calculated on pointto-point 

basis) of 5.58 per cent 

(provisional). 

The provisional inflation rates (pointto-point) 

for the week-ended 30 December 

2006 across the three broad commodity 

groups are as under: 

Table 2.6 

Provisional Inflation Rates 

(in per cent) 

Item Weight (%) Rate of inflation (%) 

Week ended Week ended 

23.12.2006 30.12.2006 

All Commodities 100.0 5.48 5.58 

Primary Articles 22.02 8.76 9.09 

Fuel, Power, Light & Lubricant 14.23 3.38 3.47 

Manufactured Products 63.75 5.04 5.04 

19


FDI Inflows during 2006-2007 

During April-December 2006, FDI 

inflows have been of the order of 

Rs. 42,138 crore (US$ 9.27 billion) against 

Rs. 16,393 crore (US$ 3.70 billion) during 

the corresponding period last year. 

The cumulative FDI inflows from 

August 1991 to December 2006 

are Rs. 2,03,549 crore (US$ 48.17 

billion). 

NRI Investment 

NRI inflows have been of Rs. 12,434 

crore (the amount of NRI inflows includes 

the inflows of special NRI schemes 

administered by RBI). 

20


3EVOLUTION AND DEVELOPMENT OF 

INDUSTRIAL POLICY 

Main objective of the Industrial 

Policy of the Government are: 

v 

v 

v 

v 

v 

to maintain a sustained growth in 

productivity; 

to enhance gainful employment; 

to achieve optimal utilisation of 

human resources; 

to attain international competitiveness; 

and 

to transform India into a major 

partner and player in the global arena. 

Policy focus is on: 

v 

v 

Deregulating Indian industry; 

Allowing the industry freedom and 

flexibility in responding to market 

forces; and 

Policy Measures 

i. Liberalisation of Industrial 

Licensing Policy 

The list of items covered under 

compulsory licensing under the Industries 

(Development & Regulation) Act, 1951 is 

reviewed on an ongoing basis. Drugs and 

Pharmaceuticals have been removed from 

the list of items requiring compulsory 

licensing vide Notification No. S.O. 1386 

(E) dated 23.9.2005. At present, only five 

industries are under compulsory licensing 

mainly on account of environmental, safety 

and strategic considerations. Similarly, 

there are only three industries reserved for 

the public sector. The lists of industries 

reserved for the public sector and of items 

under compulsory licensing are at 

Appendix-III and IV, respectively. 

ii. Industrial Entrepreneurs’ 

Memorandum (IEM) 

v 

Providing a policy regime that 

facilitates and fosters growth of Indian 

industry. 

Industries not covered under 

compulsory licensing are required to file an 

Industrial Entrepreneurs’ Memorandum 

21


(IEM) with the Secretariat for Industrial 

Assistance (SIA) Provided the value of 

investment on Plant & Machinery of such 

units about Rs. 10 crore. No industrial 

licence is required for such exempted 

industries. Amendments are also allowed 

to IEMs filed from 1.7.98. 

iii. 

Liberalisation of the Locational 

Policy 

A significantly amended locational 

policy in tune with the liberalised licensing 

policy is in place. Entrepreneurs are free to 

select the locating for setting up industry. 

However, approval is required from the 

Government for locating industries that are 

within 25 km of the periphery of cities having 

a population of more than one million as 

per the 1991 census, provided that it is not 

within an industrial area so designated by 

the State Governments prior to 24.7.1991. 

Locational restrictions are not applicable for 

electronics, computer software and printing 

industries and other non-polluting 

industries which may be notified from time 

to time. Zoning and land use regulations as 

well as environmental legislations continue 

to regulate industrial locations. 

iv. 

Policy for Small Scale Industries 

Reservation of items of manufacture 

exclusively for the small scale sector forms 

an important focus of the industrial policy 

as a measure of protecting this sector. 

Presently, 114 items are reserved for 

manufacture by the small scale industrial 

units. For manufacture of items reserved 

for manufacture in the small scale sector 

by non-SSI units, they need to obtain an 

industrial licence and undertake an 

export obligation of 50% of their annual 

production. This condition of licensing 

is, however, not applicable to those 

undertakings operating under 100% 

Export Oriented Undertakings Scheme, 

the Export-Processing Zone (EPZ) or the 

Special Economic Zone Schemes (SEZs). 

Policy for Foreign Direct 

Investment 

Promotion of Foreign Direct 

Investment (FDI) forms an integral part of 

the Industrial Policy. The role of FDI in 

accelerating economic growth is by way 

of infusion of capital, technology and 

modern management practices. The 

Government has put in place a liberal and 

transparent foreign investment regime 

wherein FDI up to 100% is allowed under 

the automatic route in most sectors/ 

activities. 51% FDI is allowed in retail 

trade of ‘Single Brand products’ with a 

view to attracting investments in 

production and marketing, improving the 

availability of such goods for the 

consumer, encouraging increased 

sourcing of goods from India, and 

enhancing competitiveness of Indian 

enterprises through access to global 

designs, technologies and management 

practices. Main features of the FDI policy 

are given in Chapter 5. 

Facilities for Non-resident Indians 

(NRIs) 

The general policy and facilities for 

Foreign Direct Investment as available to 

22


foreign investors/companies apply to NRIs 

as well. In addition, Government have 

extended special concessions to NRIs in the 

following sectors: 

i. NRI investment in the real estate 

and housing sector is allowed upto 

100%. Such investments are 

exempted from the conditions of 

minimum capital, minimum area 

development and lock-in period on 

investment. 

ii. 

iii. 

NRI investment in domestic airlines 

sector is allowed upto 100% subject 

to no direct or indirect participation 

by foreign airlines vide Government 

of India Gazette Notification dated 

2.11.2004 issued by Ministry of Civil 

Aviation (www.civilaviation.nic.in). 

Individual NRIs are also permitted to 

invest on non-repatriable basis in 

partnership firms and proprietorship 

concerns. 

23

4 

SECRETARIAT 


FOR INDUSTRIAL 

ASSISTANCE 

The Secretariat for Industrial 

Assistance (SIA) in the Department 

functions as a single window for 

entrepreneurial assistance, investor 

facilitation and processing of applications 

which require Government approval. SIA 

also assists entrepreneurs and investors 

in setting up projects, including liaison 

with other organisations and State 

Governments and monitoring 

implementation of various projects. 

Different arms of SIA are: Foreign 

Collaboration and NRI Division, Foreign 

Investment Implementation Authority 

(FIIA), Investment Promotion (IP) Cell, 

Infrastructure Development Cell and 

Entrepreneurial Assistance Unit (EAU), etc. 

With the moving of Foreign 

Investment Promotion Board (FIPB) to 

Department of Economic Affairs, Ministry 

of Finance, the Department of Industrial 

Policy & Promotion (DIPP) is responsible 

for non-resident investment in industrial 

and service projects. However, all matters 

relating to FDI policy are handled by this 

Department. 

Investment Promotion 

Cell 

With the DIPP assuming a 

promotional role, an Investment Promotion 

and Infrastructure Development Cell was 

created in 1996 to give necessary impetus 

to facilitation and monitoring of investment 

as well as for better coordination of 

infrastructural requirements of industry. 

It has since been bifurcated into two 

different Cells, viz. Investment Promotion 

Cell and Infrastructure Development Cell. 

The Investment Promotion Cell has interalia, 

been given the responsibility of 

dissemination of information about 

investment climate and opportunities in 

India, investment facilitation and 

compilation of sectoral policies, strategies 

and guidelines for infrastructure sector. 

Keeping the above in view, a Plan 

Scheme “Undertaking Investment 

Promotion Activities” is being implemented 

with the following main objectives : 

i. Promotion of investment, including 

FDI, by way of dissemination of 

information on investor friendly 

24


ii. 

climate and opportunities available in 

the country by bringing out various 

publications/publicity material in 

print/electronic form, organising 

investment promotion events, such 

as, road-shows, seminars, etc., in 

potential countries in association with 

Industry Associations and assisting 

the State Government in undertaking 

various investment promotion 

activities. 

Implementation of e-Biz Project 

which aims at providing single 

window and a Government – Industry 

interface by establishing a 

Government-to-Business (G2B) 

portal. The portal is expected to create 

a one-stop shop for convenient and 

efficient services to foreign and 

domestic investors, business and 

industry by facilitating online filing 

of various proposal/clearances, 

requests and periodical reports. 

During the period under report, the 

following investment promotion activities 

were undertaken:- 

Investment Promotion: 

(a) 

Major Events Organised 

The following major investment 

promotion events have been conducted 

during the current financial year 2006-07: 

i) ‘Destination India’ event was organised 

in France during 30 May- 

1 June 2006 in association with 

Federation of Indian Chamber of 

ii) 

iii. 

Commerce and Industry (FICCI). 

During this event, Hon’ble Minister of 

Commerce and Industry (C&IM) had 

one-to-one meetings with top French 

Chief Executive Officers (CEOs) from 

different sectors. As a result, a number 

of French companies are expected to 

invest in India. Destination India event 

was also organised in Japan during 14- 

15 June, 2006 in association with 

Confederation of Indian Industry (CII), 

and Japan External Trade Organisation 

(JETRO) to showcase investment 

climate and opportunities in India. 

About 350 Japanese delegates were 

briefed about the investment 

opportunities in India. A series of 

Destination India events was organised 

in Italy during 6-8 November, 2006. 

A high level business and official 

delegation led by Hon’ble Minister of 

Commerce & Industry visited Milan 

& North Italy during 31 August- 

3 September, 2006 to participate in 

the prestigious Ambrosetti Forum 

held at Villa d’Este, Lake Como on 

1-2 September 2006 and the 

preparatory meeting of the Indo- 

Italian Task Force on Fashion, Design 

and Lifestyle products was held at 

Milan on 31 August, 2006. 

Secretary (IPP) visited Taiwan from 

31 August to 2 September, 2006 

accompanied by industry 

representatives from Manufacturers’ 

Association for Information 

Technology and industry officials 

from different States to participate in 

the ‘Destination India’ event at Taipei 

25


iv. 

(Taiwan). An investment Seminar and 

aRoundtable Forum with Taiwan’s 

industry representatives were 

organized on 1 September, 2006. 


delegation led by Hon’ble Minister of 

State (IPP) visited New York (USA) 

during 22-25 September, 2006 to 

participate in the 3rd Annual India 

Investment Forum Meeting. 

v. A high level business and official 

delegation led by Hon’ble PM visited 

London (UK) for India-UK Investment 

Summit and Helsinki (Finland) for the 

7th India-European Union Summit 

during 9-13 October 2006. Hon’ble 

Minister of Commerce & Industry was 

also part of this delegation. More than 

150 European delegates attended the 

event. 

vi. 

vii. 


delegation led by Hon’ble PM visited 

Japan during 13-16 December 

2006. Commerce & Industry Minister 

and Secretary, Industry Policy & 

Promotion were included as members 

of this delegation since a number of 

trade and investment related issues 

were discussed and a few agreements 

on the subject were negotiated/signed 

during this visit. 

A large number of CEOs from abroad 

also visited the Department to meet 

Commerce & Industry Minister, 

Secretary, Industrial Policy & 

Promotion and other senior 

functionaries. Those delegates were 

advised on the investment polices, 

climate and opportunities. 

(b) 

Publications 

New issues of various publicity 

material in the form of booklets and flyers 

have been brought out/up-dated in 

consultation with other Ministries/ 

Departments to apprise both Indian and 

foreign investors about the investment 

climate in India. These include - 

v 

Manual on FDI in India - Policy & 

Procedures in English, Italian & 

Japanese languages 

v FDI Policy April, 2006 

v 

v 

v 

v 

v 

v 

(c) 

Entry Strategies for Foreign Investors 

Ready Reckoner for NRIs 

Incredible India – in English & Italian 

languages 

Investment opportunities in India 

Taxation in India 

Booklets on Policies and Incentives in 

Infrastructure Sectors - Investment 

opportunities in major sectors like 

Power, Roads etc. 

Dissemination of investment 

information: 

The Investment Promotion Cell has 

been maintaining a website – http:// 

dipp.gov.in through which information 

about industrial policy and procedures, 

FDI policy & procedure, State policies, 

projects on offer, list of investment 

26


approvals, etc. is provided. Most of the 

publications of the Department are also 

available on this website. It includes 

Manual on Foreign Direct Investment in 

India – Policy & Procedures, Entry 

Strategies for Foreign Investor, NRI Ready 

Reckoner, Investing in India, SIA News 

Letter issued (monthly), SIA Statistics 

(monthly) etc. which can be downloaded 

from the website. 

Besides German, French, Spanish, 

Italian and Korean versions of Manual on 

Foreign Direct Investment in India-Policy 

and Procedures have also been uploaded 

on this website. Status of applications filed 

in SIA are also available through links 

available at the home page of this website. 

Text of Press Notes/Releases, various 

application forms, addresses of relevant 

websites etc. are other important features 

of DIPP website. A user-friendly design of 

the website has been adopted. 

The website has facility for interactive 

guidance on-line chat for the benefit of the 

investors. Those seeking information/ 

clarification on-line can join chat session 

on all working days between 1100 hrs to 

1200 hrs and 1600 hrs to 1700 hrs. 

Bulletin board facility is also available for 

seeking information/clarification on 

Government policy & procedure. Almost 

600 queries are received and replied every 

month at this site. So far, more than 

700,000 hits have been recorded in the 

website. A small CD-ROM (visiting card 

size) was brought out. This popular 

product contains FDI manual and 

investment opportunities in various 

infrastructure sectors. Information under 

Right to Information Act has also been 

hosted. Departmental reports and activities 

are also disseminated through the website. 

(d) E-Biz Project 

The Department has undertaken an 

initiative to establish G2B portal to create a 

one-stop shop for providing convenient and 

efficient services to the foreign and domestic 

investors, businesses and industries. This 

project is one of the Mission Mode Projects 

under the National e-Governance Plan of the 

Government of India. It aims at enhancing 

India’s business competitiveness through a 

service-oriented, event-driven G2B 

interaction. The project involves setting up 

of a comprehensive and integrated G2B 

portal with services across Central, State 

and local Governments, that addresses all 

the needs of the businesses and industries 

in a customer-centric perspective right from 

the inception to the entire life cycle. 

Considering the vast scope and 

complexities of the e-Biz project, initially a 

pilot project has been planned, covering the 

business-Government interface in six 

Central Government Departments viz. 

Department of IPP, Ministry of Company 

Affairs, Directorate General of Foreign 

Trade, Central Board of Direct Taxes, 

Central Board of Excise and Customs, 

Ministry of Environment and Forests, RBI 

and four State Governments viz. 

Maharashtra, Haryana, Uttar Pradesh and 

Andhra Pradesh, integrating 25 G2B 

services belonging to Central (14), State (8 

services) and local bodies (3 services). The 

project has been awarded to CDAC-led 

consortium and will start as soon as 

27


necessary agreements are signed by the 

Department with the consortium. 

Infrastructure Development 

(Industrial Park Scheme) 

The Department undertakes activities 

leading to infrastructure development for 

industries. One of the major initiatives of 

the Department is the implementation of 

Industrial Park Scheme. The scheme which 

originally started as Industrial Park 

Scheme, 1999, was revised and notified on 

1 April 2002 as Industrial Park Scheme, 

2002. Under this Scheme, tax exemption 

under Section 80 IA of Income Tax Act, 

1961, is allowed for 10 consecutive years 

out of 15 years that an undertaking 

develops and operates or maintains and 

operates an Industrial Park for the period 

beginning on the 1st day of April 1997 and 

ending on the 31st day of March 2006. 

Hon’ble Finance Minister in his budget 

announcement has extended the benefits 

of this Scheme for a further period of 3 

years i.e. upto March 2009. 

Under this Scheme, applications 

conforming to stipulated parameters are 

processed under automatic route. Those, 

which do not follow the parameters laid down 

for the automatic route, are dealt with under 

the approval route. An Empowered 

Committee chaired by the Secretary of this 

Department decides such cases. 

Till 15th February 2007, 261 approvals 

(including 27 withdrawals), with a projected 

investment of Rs. 18546.16 crores, have been 

granted. Out of these, 90 projects with an 

investment of Rs. 3110.58 crores were 

accorded approval between 1 st January 2006 

and 15 th Februay 2007. 

Foreign Investment Implementation 

Authority (FIIA) 

Foreign Investment Implementation 

Authority (FIIA) was established in the 


Promotion, Ministry of Commerce and 

Industry, vide Notification dated 9.8.1999, 

to facilitate quick translation of Foreign 

Direct Investment (FDI) approvals into 

implementation, by helping the foreign 

investors in obtaining necessary clearances, 

sorting out their operational problems and 

meetings with various Government agencies 

to find solutions to their problems. 

FIIA conducts regular interaction with 

investors of specific regions or countries. 

In the meetings of FIIA, apart from 

Government of India, senior officials from 

State Governments also participate. Apex 

industrial associations, viz. CII, FICCI, 

ASSOCHAM, are actively associated. 

During the year 2006-07, FIIA 

meetings were held to discuss issues 

pertaining to setting up of an integrated 

Steel plant with a capacity of 12 MTPA by 

POSCO in the State of Orissa and issues 

relating to the expansion project of MCC 

PTA India Ltd. at Haldia, West Bengal. 

Electronic Hardware Technology 

Park/Software Technology Park 

Schemes 

For building strong electronics 

industry and with a view to enhancing 

28


exports, two scheme, viz., Electronic 

Hardware Technology Park (EHTP) and 

Software Technology Park (STP) are in 

operation. Under EHTP/STP scheme, 

inputs are allowed to be procured free of 

duties. 

The Directors of STPs have been given 

powers to approve fresh EHTP/STP 

proposals and also grant post-approval 

amendments in respect of EHTP/STP 

projects as have been given to the 

Development Commissioners of Export 

Processing Zones in the case of Export- 

Oriented Units. All other applications for 

setting up projects under these schemes 

are considered by the Inter-Ministerial 

Standing Committee (IMSC) chaired by 

Secretary (Information Technology). FDI/ 

NRI investment in the units functioning 

under EHTP/STP schemes are on 

automatic route of RBI. 

Public Relations and Complaints 

Section 

The Public Relations and Complaints 

Section (PR&CS) functioning under the SIA 

provides assistance to prospective 

entrepreneurs with respect to licensing 

policy and procedures, foreign 

collaboration, etc. The Section attends to 

enquiries from entrepreneurs relating to 

investment decisions, provides information 

regarding status of applications filed for 

various industrial approvals, assists 

entrepreneurs and investors through other 

advisory services. 

A separate computerised “Information/ 

Facilitation Counter” has been set up for 

attending public enquiries/grievances. The 

Information Facilitation Counter 

functioning under the overall supervision 

of the Joint Secretary (Public Grievances) 

provides information on all matters relating 

to the Department. The grievances are also 

acknowledged at the counter. 

More than 1400 entrepreneurs 

visited the Information Facilitation 

Counter during the period April 2006 to 

31 December 2006. The Counter received 

27 enquiries during this period seeking 

information including status of pending 

proposals. All enquiries/ grievances were 

attended to expeditiously. 

Industrial Entrepreneur Memorandum 

(IEM) 

Under the new Industrial Policy of 

July 1991, for delicensed sector, an 

entrepreneur has to file an Industrial 

Entrepreneur Memorandum with the 

Secretariat for Industrial Assistance (SIA) 

in the prescribed form. The receipt of the 

IEM is computerised and acknowledged 

immediately by SIA. No further approval is 

required from this Ministry in respect of 

delicensed industries. 

Since the announcement of New 

Industrial Policy till the end of December 

2006, 68,768 IEMs have been filed with the 

Government for establishing new units, for 

manufacture of new articles and for 

expansion of existing units, etc. These IEMs 

had a proposed investment of over 

Rs. 2,365 thousand crore and employment 

for more than one crore persons. Statewise 

and sectorwise lists of IEMs filed since 

29


August 1991 to December 2006 on a yearwise 

basis are at Appendix V and VI. 

Since the inception of the IEM scheme, 

till December 2006 a total of 6,397 units 

have formally intimated commencement of 

commercial production. The investment 

reported in respect of these IEMs is Rs. 

2,41,756 crore. Statewise report of 

implementation of IEMs for the period August 

1991 to December 2006 is at Appendix VII. 

Industrial Investment Intentions 

The complete Industrial Investment 

scenario covers the Industrial Entrepreneur 

Memoranda for the delicensed sector and 

Letters of Intent and Direct Industrial 

Licences for licensable sector. Statewise and 

Sectorwise analysis of Industrial Investment 

Proposal from August 1991 to December 

2006 is given at Appendix VIII and IX 

respectively. 

Industrial Licence Applications 

During the period January-December 

2006, a total of 145 applications were 

received for grant of Industrial Licence. 137 

applications received earlier were pending 

for grant of licence as on 1 January 2006. 

Out of the 282 applications thus at hand, 

219 applications were disposed of till the 

end of December 2006 leaving a balance of 

63 applications. The following table 4.1 

gives a comparative picture of the disposal 

of applications in respect of the old as well 

as fresh applications for industrial licence 

during the years 2005 and 2006 (upto 

December). 

Table 4.1 

Foreign Technology Collaborations 

Foreign Technology collaborations are 

permitted either through the automatic route 

under delegated powers exercised by the RBI 

or by the Government. Major sectors 

attracting foreign technology collaborations 

are Electrical equipments (including 

electronics & software), Industrial 

machinery, Chemicals (other than fertilizers) 

and Transportation industry (including 

automobiles). These four Sectors account for 

47.7 per cent of the total collaborations. 

During the period August 1991 to December 

2006, 7815 foreign technology collaborations 

Status of application for 2006 2005 

Industrial Licence (January-December) (January-December) 

Applications awaiting disposal as on 

1.1.2006/2005 137 136 

Applications received/ registered 

during the year 145 181 

Total number of applications 282 317 

Number of applications disposed 

during the year 219 180 

Balance pending applications as on 

30.12.2006/31.12.2005 63 137 

30


have been approved/filed. Industry wise 

details of total foreign technical 

collaborations approved by the RBI and the 

Government is given at Appendix X. 

Technical Support Wing 

Technical Support Wing (TSW) in the 


Promotion is looking after the following 

items of work: 

Technical advice to the Directorate 

General of Foreign Trade 

(a) 

Work related to Export Promotion 

Capital Goods Scheme (EPCG): 

As per current import policy, capital 

goods for pre-production, production 

and post-production (including CKD/ 

SKD thereof as well as computer 

software systems) are allowed for 

import at 5 per cent customs duty 

subject to an export obligation 

equivalent to 8 times of duty saved 

on capital goods imported under 

EPCG scheme to be fulfilled over a 

period of 8 years reckoned from the 

date of issuance of licence. 

Under the scheme, manufacturer 

exporters with or without supporting 

manufacturer(s)/vendor(s), 

merchant exporters tied to 

supporting manufacturer(s) and 

service providers are eligible to 

import capital goods. Import of 

capital goods is subject to Actual 

User condition till the export 

obligation is completed. 

Applications under this scheme are 

considered by Export Promotion 

(b) 

(c) 

Capital Goods Committee in the Office 

of the Directorate General of Foreign 

Trade at Headquarters. Technical 

Support Wing provides technical 

information on these applications on 

the need of capital goods to be 

imported and product to be exported. 

Work related to Import of Raw 

Material, Component etc. under the 

Duty Exemption Scheme: An Advance 

Licence is issued under Duty 

Exemption Scheme to allow import of 

input, which are physically 

incorporated in the export product 

(making normal allowance for wastage). 

In addition, fuel, oil, energy, catalysts 

etc. which are consumed in the course 

of their use to obtain the export product 

may also be allowed under the scheme. 

Advance Licence can be issued for: 

i. Physical exports 

ii. Intermediate supplies 

iii. Deemed exports 

Applications under this scheme are 

considered by the Advance Licensing 

Committee in the Office of Director 

General of Foreign Trade at 

Headquarters. Technical Support 

Wing provides technical information 

on these applications so as to arrive 

at justified requirement of different 

inputs for export production. 

Work related to fixation of input/ 

output norms: To facilitate the users 

of Duty Exemption Scheme and Duty 

Entitlement Pass Book (DEPB) 

Schemes an elaborate exercise is 

undertaken on a continuous basis for 

standard input/output and value 

31


(d) 

(e) 

addition norms. Efforts are being 

made to fix the norms for additional 

items and review the existing norms 

so as to make duty exemption scheme 

really effective. 

Work related to Duty Entitlement 

Pass Book Scheme: The objective of 

Duty Entitlement Pass Book Scheme 

is to neutralise the incidence of basic 

customs duty on the import content 

of the export product. The 

neutralisation shall be provided by 

way of grant of duty credit against the 

export product. 

The representative of Technical 

Support Wing (TSW) attends the Duty 

Entitlement Pass Book Scheme 

meeting in DGFT in order to provide 

technical input in the decision 

making process. This may include 

essentiality of the input as well as 

classification of a product under a 

given entry in the list notified by 

DGFT for the purpose of permitting 

credit to the exporter. 

Work related to Import of Restricted 

Items under Import Policy: All 

second hand goods, excepting second 

hand capital goods, and other items 

specifically notified as restricted for 

imports may be imported only in 

accordance with the provisions of this 

Policy, ITC (HS), Handbook (Vol.1), 

Public Notice or a licence/certificate/ 

permission issued in this behalf. 

Applications for import of restricted 

items are considered by a Committee 

in the DGFT. The representative of 

TSW is a permanent member of this 

Committee. 

(ii) Imports under Indo – US 

Memorandum of Understanding 

Import of specified capital goods, raw 

material, components, etc. from the United 

States of America is subject to US Export 

Control Regulations. US suppliers of such 

items are required to obtain export licence 

based on the import certificate furnished 

by the Indian importer to the US supplier. 

TSW issues such certificate for organized 

sector units registered under it, except for 

import of computers and computer based 

systems. 

(iii) Representation in Export 

Promotion Council (EPC) 

The main role of the EPCs is to project 

India’s image abroad as a reliable supplier 

of high quality goods and services. In 

particular, the EPCs shall encourage and 

monitor the observance of international 

standards and specifications by exporters. 

The EPCs shall keep abreast of the trends 

and opportunities in international markets 

for goods and services and assist their 

members in taking advantage of such 

opportunities in order to expand and 

diversify exports. Export Promotion Council 

acts as a platform for interaction between 

the Exporting Community and the 

Government. Officers of TSW participate in 

the meeting of the Council. 

(iv) 

Miscellaneous Work handled by 

Technical Support Wing (TSW) 

i. TSW has prepared guidelines for 

handling of metal scrap by Indian 

users as decided in the meeting of 

COS. TSW, also represents DIPP in 

various meetings held in Department 

32


of Commerce, Department of Steel 

and DGFT on import of metal scrap. 

ii. TSW represents DIPP in the 

Technology Development Board (TDB) 

and Technical Appraisal Committee 

(TAC) meetings held in Department 

of Science & Technology. 

iii. 

TSW coordinates any reference 

received from Department of Revenue 

(Duty Draw Back Scheme) and gives 

necessary inputs for this Scheme. In 

addition to above, various other 

Government agencies such as Drug 

Controller, Bureau of Indian 

Standards, etc. seek technical advice 

from this Division. TSW also sends 

technical advice to coal/rail 

authorities for allotment of coal 

wagons to industry groups. 

Industrial Policy relating to 

Environment – Energy Conservation 

Technology Development and Quality 

Control 

The Department has taken several 

initiatives for facilitating conservation of 

natural resources and environmental 

improvement in the Industrial Sector. The 

following paras highlight major initiatives 

taken in this direction. 

i. The Locational Policy has been framed 

keeping in view the environmental 

considerations. Under this policy only 

industries of non-polluting nature 

(such as electronics, computer 

software and printing) will be located 

in cities with population greater than 

1 million. Also, expansions of existing 

units in these areas is not encouraged 

and is subject to industrial licensing 

restriction. Industries can be located 

ii. 

iii. 

iv. 

outside 25 km of standard urban 

limits of identified major cities. 

Specific locational clearance of the 

Government of India and the State 

Government is necessary before any 

industry can be located in such areas. 

Further setting up of highly polluted 

industry near urban areas is being 

discouraged through the industrial 

licensing mechanism. 

Items of manufacture which are 

hazardous or which may have serious 

implications on pollution i.e. 

identified hazardous chemicals have 

been retained under compulsory 

licensing. For these industries, the 

industrial approvals carry an 

additional condition that safety of 

plant and adoption of safety measures 

would be ensured before commencing 

commercial production. 

All approvals i.e. Industrial licenses, 

foreign investment approvals, 

technology approvals are subject to 

the conditions that the 

entrepreneurs/investors shall obtain 

necessary clearance from the 

Pollution Control Board and would 

separately obtain all approvals 

required under the various statues of 

Ministry of Environment & Forest. 

For approvals governing technology 

transfer, use of environment friendly, 

modern technology such as Non-CFC 

based technology for refrigeration and 

air-conditioning, caustic soda, etc. 

are being encouraged. This division 

is a member of the Ozone Cell and 

Genetic Engineering Approval 

Committee (GEAC) of the Ministry of 

Environment and Forest. 

33

5 

FOREIGN 


DIRECT INVESTMENT 

The role of Foreign Direct 

Investment (FDI) in the upgradation of 

technology, skills and managerial 

capabilities is now well accepted. 

Additional investments over and above 

the available domestic resources help in 

providing much needed employment 

opportunities. 

v 

Press Note 1 (2005 Series); 

and 

FDI is prohibited only in 4 activities 

viz. Retail trading (except Single 

Brand product retailing); Gambling 

& Betting; Lottery; and Atomic 

Energy. 

FDI Policy 

v 

Government has put in place a liberal 

and investor-friendly policy for FDI 

under which FDI upto 100% is 

permitted in the specified routes in all 

sectors/activities except the following : 

(i) 

(ii) 

Where more than 24% foreign 

equity is proposed to be 

inducted for manufacture of 

items reserved for small-scale 

sector; 

Proposals where the foreign 

investor has an existing joint 

venture/ technical collaboration/ 

trademark agreement 

in the same field of activity, 

and attracts the provision of 

Major Policy Initiatives 

(during 2006) 

a. Changes Made in 2006 

v 

v 

A comprehensive review of the FDI 

policy undertaken, for the first time 

in the last 15 years, with a view to 

consolidate the liberalisation 

measures already effected, and 

further rationalisation of the FDI 

policy governing various activities. 

As a result of this exercise, the 

following major policy changes have 

been notified vide Press Note: 4 (2006 

Series): 

i. Change of route - FDI has been 

allowed up to 100% under the 

34


automatic route for distillation 

and brewing of potable alcohol; 

manufacture of industrial 

explosives; manufacture of 

hazardous chemicals; manufacturing 

activities located 

within 25 km of the Standard 

Urban Area limits requiring 

Industrial license under the 

IDR (Act), 1951; setting up of 

Greenfield airport projects; 

laying of Natural Gas/LNG 

pipelines, market study & 

formulation and Investment 

financing in the Petroleum 

sector; and cash & carry 

ii. 

iii. 

wholesale trading and export 

trading. 

Increase in equity caps - FDI 

caps have been increased to 

100% and automatic route 

extended to coal and lignite 

mining for captive consumption; 

setting up of infrastructure 

relating to marketing in 

Petroleum & Natural Gas sector; 

and exploration and mining of 

diamonds and precious stones. 

FDI in new activities - FDI has 

been allowed upto 100% on the 

The Union Minister for Commerce and Industry, Shri Kamal Nath addressing the media on the 

Foreign Direct Investment (FDI) Policy 

35


v 

iv. 

automatic route in Power trading 

and processing and warehousing 

of coffee and rubber. 

FDI in new activities - FDI has 

been allowed upto 51% for 

‘single brand’ product retailing 

which requires prior 

Government approval. Specific 

guidelines have been issued for 

governing FDI for ‘single brand’ 

product retailing. 

v. Removal of restrictive 

conditions - Mandatory 

divestment condition for B2B e- 

commerce has been dispensed 

with. 

vi. 

Procedural simplification - The 

transfer of shares by residents 

to non-residents including 

acquisition of shares in an 

existing company has been 

placed on the automatic route 

subject to sectoral policy on FDI. 

Equity caps on FDI are presently 

only in limited sectors viz. 

i. Upto 20% - FM Radio 

Broadcasting. 

ii. 

iii. 

Upto 26% - Insurance, Defence 

production, Petroleum refining in 

the PSUs; Print and Electronic 

media covering News & current 

affairs. 

Upto 49% - Air Transport 

Services; Asset Reconstruction 

iv. 

Companies; Cable network; DTH; 

Hardware for uplinking, HUB etc 

Upto 51% - Single Brand 

Retailing of products. 

v. Upto 74% - Atomic Minerals; 

Private Sector Banking; Telecom 

services; Establishment & 

operation of Satellites. 

b. FDI Policy in the Agriculture & 

Plantation Sector 

v 

v 

v 

v 

Vide Press Note: 4 (2006), Agriculture 

& Plantations was removed from the 

list of prohibited sectors for FDI and 

the activities permitted within these 

sectors were included in the sectorspecific 

policy. 

The list of activities permitted for FDI 

in Agriculture and Plantation sector 

are as follows: 

As per the present policy, FDI upto 

100% is permitted under the 

automatic route in Floriculture, 

Horticulture, Development of Seeds, 

Animal Husbandry, Pisciculture, 

Aqua-culture and Cultivation of 

Vegetables & Mushrooms, under 

controlled conditions and services 

related to agro and allied sectors. 

FDI upto 100% with prior Government 

approval is permitted in Tea plantation 

subject to the conditions of divestment 

of 26% equity of the company in favour 

of an Indian partner/ Indian public 

within a period of five years; and prior 

36


v 

approval of the State Government 

concerned in case of any future land 

use change. 

Besides those mentioned in the above 

two preceding paras, FDI is not 

allowed in any other agricultural 

sector/activity. 

II. 

Reserve Bank of India within 30 days 

of inward remittances and/or issue 

of shares to non-residents. As a 

result, FDI approval statistics do not 

reflect the investment intentions. 

Sector-wise distribution of FDI 

inflows 

NRI Investment 

The general policy and facilities for 

FDI are applicable to Non-Resident Indians 

(NRIs) as well. In addition, Government 

has extended some additional facilities to 

NRIs, which include investment in the real 

estate and civil aviation sectors up to 100% 

besides a liberal investment regime on nonrepatriation 

basis. 

Performance during the year 

2006-2007 (up to December 2006) 

I. Total FDI inflows of Rs. 42,138.08 crore 

(US$ 9.27 billion) were received during 

the financial year 2006-2007 (April- 

December). Only equity component of 

FDI has been covered in the inflows 

data and this does not include the 

reinvested earnings and other 

components of FDI, which are compiled 

at the end of the financial year. 

Under the extant FDI policy, FDI upto 

100% is allowed under the automatic 

route in most sectors/activities, 

except few where sectoral equity/ 

entry route restrictions have been 

retained. FDI under the automatic 

route does not require any approval 

and only involves intimation to the 

III. 

IV. 

Services sector (financial & non 

financial) account for 34.51% of the 

total FDI inflows followed by Electrical 

equipments (including computer 

software and electronics) 15.54%, 

Constru-ction Activities (8.18%), 

Telecommunications (5.26%), Real 

Estate (4.82%), Transportation 

Industry (3.98%), Cement & Gypsum 

Products (2.26%), Fuels (power & oil 

refinery) (2.07%), Hotel & Tourism 

Sector (1.79%) and Drugs & 

Pharmaceuticals (1.7%). The balance 

of inflows (13.28%) was accounted for 

by other sectors. 

Country-wise distribution of FDI 

inflows 

FDI from Mauritius accounted for 

45.68% of total inflows into the 

country followed by U.K. with 

17.86%, U.S.A. with 6.56%, 

Singapore with 5.85% and 

Netherlands with 5.26% 

Cumulative Inflows from August 

1991 to December 2006: 

v 

The cumulative equities FDI 

inflows since 1991 has been Rs. 

2,03,549 crore (US$ 48.17 

billion). 

37


Figure 5.1 

COUNTRY-WISE FDI INFLOWS 

(from April 2006 - December 2006) 

V. Financial year-wise FDI inflows: 

Table 5.1 

S. No. Financial Year AMOUNT 

(April – March) 

OF FDI 

INFLOWS 

(In rupees 

crore) 

1. 1991-1992 (August-March) 409 

2. 1992-1993 1,094 

3. 1993-1994 2,018 

4. 1994-1995 4,312 

5. 1995-1996 6,916 

6. 1996-1997 9,654 

7. 1997-1998 13,548 

8. 1998-1999 12,343 

9. 1999-2000 10,311 

10. 2000-2001 12,645 

11. 2001-2002 19,361 

12. 2002-2003 14,932 

13. 2003-2004 12,117 

14. 2004-2005 17,138 

15. 2005-2006 24,613 

16. 2006-2007 42,138 

(up to December 2006) 

GRAND TOTAL 2,03,549 

FDI promotion initiatives 

Several steps have been initiated to 

facilitate increased FDI inflows which 

include, inter-alia, the following: 

a) On the policy front, while our FDI 

policy is already very liberal, the policy 

is being further progressively 

rationalised. Equity cap in civil 

aviation (air transport), has recently 

been raised as a measure of further 

liberalisation of policy. 

b) On the investment promotion front, 

the Department organises 

Destination India events in 

association with CII, FICCI. 

c) The Foreign Investment Implementation 

Authority (FIIA) has been 

activated towards speedy resolution 

of investment related problems. 

38


d) National Manufacturing Competitiveness 

Council has been set up to 

provide a continuing forum for policy 

dialogue to energise and sustain the 

growth of manufacturing industries. 

NMCC has submitted its report. 

e) The Department has regular 

interaction with foreign investors. 

Such interactions have been held in 

bilateral/ regional/ international 

meets such as Indo-ASEAN, Indo-EU, 

Indo-Japan, etc. Meetings with 

individual investors were also held on 

a regular basis. 

f) The Department website 

(www.dipp.nic.in) has been made 

both comprehensive and informative 

with online chat facility. About 4500 

investment related queries were 

replied during the year. 

Prospects 

The advantage of India as an 

investment destination rest on strong 

fundamentals which include a large and 

growing market; world-class scientific, 

technical and managerial manpower; cost 

effective and highly skilled labour; 

abundant natural resources; a large 

English speaking population; independent 

judiciary, etc. This is now recognised by 

a number of global investors who have 

either already established a base in India 

or is in the process of doing so. On going 

initiatives such as further simplification 

of rules and regulations, improvement in 

infrastructure is expected to provide 

necessary impetus to increase FDI inflows 

in future. 

The inflows of FDI would depend on 

domestic economic conditions, world 

economic trends, and strategies of global 

investors. Government, on its part is fully 

committed to creating strong economic 

fundamentals and an increasingly 

proactive FDI policy regime. 

The positive efforts of the Government 

to improve the investment climate, including 

sustained improvement on infrastructure 

front, have led to renewed optimism about 

India as an emerging investment 

destination. Some of the independent 

assessments in this regard include: 

a) In UNCTAD’s “Prospects for Foreign 

Direct Investment and Strategies of 

Transnationals Corporation - 2005- 

2008”, India is ranked second, ahead 

of US (third) as the most attractive 

business location. 

b) A.T. Kearney’s “FDI Confidence Index 

2005” places India at second place up 

from third last year. 

c) India continues to be the most 

attractive location for ‘off shoring’ of 

service activities according to A.T. 

Kearney’s Annual Survey for 2005. 

39


6 

INDUSTRIAL INFRASTRUCTURE 

AND DEVELOPMENT SCHEMES 

After the announcement of the new 

Industrial Policy in 1991, decisions for 

investment have been left to the 

commercial judgment of the 

entrepreneurs which, in turn, depends on 

the initiatives of the State Governments 

in creating conducive environment by way 

of providing infrastructure facilities and 

other incentives. The role played by the 

Central Government has changed from 

The Union Minister for Commerce and Industry, Shri Kamal Nath delivering the keynote address at 

the Conference on “Building Infrastructure : Issues and Opportunities” in New Delhi 

40


that of exercising control to providing 

help and guidance by making essential 

procedures fully transparent and by 

eliminating delays. The Central 

Government also supplements the efforts 

of the State Governments through 

various schemes. These schemes play an 

important role in stimulating flow of 

capital to these areas. 

Industrial Infrastructure 

Upgradation Scheme 

Industrial Infrastructure 

Upgradation Scheme (IIUS) was launched 

in 2003 with a view to enhancing 

competitiveness of industry by providing 

quality infrastructure through publicprivate 

partnership in selected functional 

clusters. Central assistance upto 75% of 

the project cost subject to a ceiling of Rs. 

50 crore is given for each project. The 

remaining 25% is financed by other 

stakeholders with a minimum industry 

contribution of 15% of the project cost. 

Assistance is provided under the Scheme 

for creation / upgradation of physical 

infrastructure, R&D infrastructure, 

information and communication 

technology infrastructure, quality 

certification and bench marking centre, 

common facility centre, etc. The project 

is implemented by a Special Purpose 

Vehicle (SPV) registered under 

Companies/Societies Act. 

A total of 26 projects with total cost 

of Rs. 1766.18 crore involving central 

grant of Rs. 952.10 crore have been 

sanctioned under IIUS. Central grant of 

Rs. 437.38 crore has been released to 

various Special Purpose Vehicles. Out of 

these 26 projects sanctioned, 5 are for 

Tamil Nadu, 4 are for Gujarat, 3 are for 

West Bengal and 2 each for Andhra 

Pradesh, Maharashtra and Karnataka. 

Four projects have been sanctioned for 

Auto Components and Textiles clusters 

each, three projects for Chemical clusters 

and Foundry clusters each and two 

projects for Leather clusters and Rubber 

clusters each. The project works are at 

different stages of implementation. 

This Scheme has been taken under 

“Strategies and Priorities for 2006” by the 

Prime Minister’s Office (PMO) for review. 

As per milestones and time frame 

submitted to the PMO, five projects, 

namely, Chemical Cluster, Ankaleshwar, 

Chemical Cluster, Vapi, Pump, Motor & 

Foundry Cluster - Coimbatore, Auto 

Cluster - Pune and Textile Cluster - 

Ludhiana are targeted to be completed by 

March 2007 and 17 projects are likely to 

be completed by December 2007. 

No new projects have been 

sanctioned during 2006-07 as the entire 

allocation of Rs. 675 crore has been 

committed for 26 sanctioned projects. The 

Scheme has a provision of Rs. 260 crore 

for 2006-07, against which Rs. 101.48 

crore has already been released. 

The Department has submitted a 

modified Scheme to the Planning 

Commission and has also proposed an 

allocation of Rs. 1200 crore for the Eleventh 

Plan. 

41


Physical Progress: 

The following 26 clusters proposal had 

been sanctioned by the Apex Committee 

on IIUS: 

1. Textiles Cluster, Tirupur, Tamil Nadu 

2. Chemical cluster Vapi, Gujarat 

3. Auto Cluster, Vijayawada A. P. 

4. Metallurgical Cluster, Jajpur, Orissa 

5. Auto Ancillary Cluster, Chennai, 

Tamilnadu 

6. Chemical Cluster, Ankleswar, Gujarat 

7. Auto Components cluster, Pune, 

Maharashtra 

8. Cereals, Pulses & Staples cluster, 

Madurai, Tamil Nadu 

9. Textiles Cluster, Ludhiana, Punjab 

10. Marble Cluster, Kishangarh, Rajasthan 

11. Auto Cluster, Pitampura, M.P. 

12. Foundry Cluster, Belgaum, Karnataka 

13. Machine Tools Cluster, Bangalore, 

Karnataka 

14. Coir Cluster, Kerala 

15. Textile Cluster, Panipat, Haryana 

16. Gem & Jewellery Cluster, Surat, Gujarat 

17. Pharma Cluster, Hyderabad, A.P. 

18. Ispat Bhoomi Cluster, Raipur, 

Chattisgarh 

19. Leather Cluster, Kanpur, Uttar 

Pradesh 

20. Foundry Park, Howrah, West Bengal 

21. Multi Industry Cluster, Haldia, West 

Bengal 

22. Rubber Cluster, Howrah, West Bengal 

23. Textile Cluster, Ichalkaranji, 

Maharashtra 

24. Chemical Cluster**, Ahmedabad, 

Gujarat 

25. Leather Cluster**, Ambur, Tamil Nadu 

26. Pump, Motor & Foundry cluster**, 

Coimbatore, Tamil Nadu 

Growth Centre Scheme 

The Growth Centre Scheme 

announced in June 1988 became 

operational from 1991 with a view to 

promote industrialisation of backward areas 

in the country. The Central Government 

assists the State Governments by 

contributing upto Rs. 10 crore by way of 

equity for each growth centre. In case of 

North-Eastern Region including Sikkim, 

Himachal Pradesh, Uttarakhand and 

Jammu & Kashmir, the amount of Central 

assistance is Rs. 15 crore. The balance 

funds are to be raised by the State 

Governments and their agencies which 

implement the project. 

So far, 71 growth centres have been 

sanctioned under the Scheme on the basis 

of combined criteria of area, population and 

extent of industrial backwardness. Out of 

these, land acquisition has been completed 

in 65 and 52 have become functional. Full 

central assistance has been released to 27 

growth centres. Total central assistance 

of Rs. 558 crore has been provided to 

various growth centres till now. 

42


Planning Commission had 

suggested that the scheme had largely 

failed to achieve its objective and 

recommended discontinuation of the 

scheme on the basis of a sample survey 

conducted by it. This was largely 

reaffirmed in an impact evaluation and 

review of the Scheme got conducted 

through the National Productivity 

Council. No new Growth Centres are 

being sanctioned since 2003. 

Transport Subsidy Scheme 

Transport Subsidy Scheme was 

introduced in July 1971 with a view to 

promote industrialisation in hilly, remote 

and inaccessible areas. The Scheme is 

applicable to all the industrial units 

(barring plantations, refineries and power 

generating units) irrespective of their size, 

both in private and the public sector 

located in the States in the North-Eastern 

region comprising Arunachal Pradesh, 

Assam, Manipur, Meghalaya, Mizoram, 

Nagaland and Tripura, Sikkim, Jammu & 

Kashmir, Himachal Pradesh, hill districts 

of Uttarakhand, Darjeeling district of West 

Bengal, Andaman & Nicobar Islands and 

Lakshadweep. 

The Scheme has been extended from 

time to time and is presently extended up 

to 31.03.2007 i.e. end of the Xth Plan period. 

End 2 End Motor Testing – Up-gradadation of Testing facilities at SiT arc-Common Facilities for Pum 

and Motor Testing-segment 

43


Under the Scheme, subsidy ranging 

between 50% to 90% is admissible on the 

cost of transportation of raw material and 

finished goods to and from the location of 

the unit and designated railhead. 

Earlier the Scheme worked on 

disbursement/reimbursement basis but 

now the subsidy is disbursed through nodal 

agencies designated for respective States 

except for UTs and Darjeeling district of West 

Bengal, where direct disbursement is made 

by the Department to them. 

North-Eastern Development Finance 

Corporation Ltd. (NEDFi) has been 

designated as the nodal agency for NE 

States, Himachal Pradesh State Industrial 

Development Corporation (HPSIDC), 

Jammu & Kashmir Development Financial 

Corporation (JKDFC) and State Industrial 

Development Corporation for Uttaranchal 

(SIDCUL) have been designated as the 

nodal agencies for States of Himachal 

Pradesh, J&K and Uttarakhand, 

respectively. An amount of Rs.1041.19 

crore has been released under the Scheme 

upto 31.12.2006. 

Erstwhile Central Investment 

Subsidy Scheme 

In August 1971, Government had 

introduced the Scheme of Central Investment 

Subsidy to promote industrialisation in 

selected districts/backward areas, which 

were divided into Category ‘A’, ‘B’ and ‘C’ for 

the purpose of quantum of the subsidy. The 

Scheme was implemented through the State 

Governments and worked on disbursement 

/reimbursement basis. The Scheme ceased 

to operate on 30.9.1988 

After cessation of the Scheme, 

residual cases are being examined in 

pursuance of Hon’ble Supreme Court’s 

judgement dated 5.12.1995. 

Since inception of the Scheme, an 

amount of Rs.1113.88 crore has been 

released to various States/Union 

Territories upto 31.12.2006. 

North-East Industrial Policy, 1997 

Following the Prime Minister’s 

initiatives, the Government announced a 

new North-East Industrial Policy on 

24.12.1997 (NEIP, 1997) for promoting 

industrialisation in the North-Eastern 

region. This Policy is applicable for the 

States of Arunachal Pradesh, Assam, 

Manipur, Meghalaya, Mizoram, Nagaland 

and Tripura. Under this Policy, various 

concessions have been allowed to industrial 

units in the North Eastern Region, e.g., 

development of industrial infrastructure, 

subsidies under various Schemes, 100% 

excise and income-tax exemption for a 

period of 10 years, etc. 

On 23.12.2002, the Government 

announced a New Industrial Policy and 

other concessions for the State of Sikkim 

on the lines of NEIP1997. 

Central Capital Investment 

Subsidy Scheme for North-East/ 

Sikkim 

v 

The Central Capital Investment 

Subsidy Scheme, 1997 for North- 

East was notified on 1.6.1998 and is 

effective from 24.12.1997 to 

31.3.2007. 

44


v 

v 

v 

The Central Capital Investment 

Subsidy Scheme, 2002 for Sikkim 

was notified on 24.12.2002 and is 

effective from 23.12.2002 to 

22.12.2012. 

Under the above Schemes, subsidy 

@ 15% of the investment in plant and 

machinery, subject to a ceiling of 

Rs.30 lakh is payable to new 

industrial units and existing units on 

their substantial expansion, located 

in the Growth Centres and in other 

identified areas of the North-Eastern 

Region. 

NEDFi has been designated as the 

nodal agency for release of subsidy 

to the eligible units under the above 

Schemes, on the basis of 

recommendation of the State-Level 

Committee/State Government. 

v 

v 

v 

24.12.2002 and is effective from 

23.12.2002 to 22.12.2012. 

Under the above Schemes, interest 

subsidy @ 3% on the working capital 

loan is payable to new industrial 

units or existing units on their 

substantial expansion, located in 

the Growth Centres and in other 

identified areas of the North-Eastern 

Region. 

NEDFi has been designated as the 

nodal agency to release subsidy to the 

eligible units under the above 

Schemes on the basis of 

recommendations of the State-Level 

Committee/State Government. 



released to NEDFi (upto 31.12.2006) 

under the Scheme for North East. 

v 

Since inception of the scheme, an 


released to NEDFi (upto 

31.12.2006). This includes Rs.1.20 

crore on account of the Scheme for 

Sikkim. 

Central Interest Subsidy Scheme 

For North-East /Sikkim 

v 

v 

The Central Interest Subsidy Scheme, 

1997 for North East was notified on 

19.02.1999 and is effective from 

24.12.1997 to 31.3.2007. 

The Central Interest Subsidy Scheme, 

2002 for Sikkim was notified on 

Central Comprehensive Insurance 

Scheme for North-East/ Sikkim 

v 

v 


Scheme, 1997 for North East was 

notified on 14.7.1999 and is effective 

from 14.7.1999 to 13.7.2009. Earlier 

National Insurance Company Ltd. 

(NIC) was the designated agency for 

disbursements under this Scheme, 

but has been replaced by NEDFi with 

effect from 6.5.2005. 


Scheme, 2002 for Sikkim was notified 

on 24.12.2002 and is effective from 

24.12.2002 to 22.12.2012. 

45


v 

v 

v 

New industrial units and existing 

units, on their substantial expansion 

which are included in Fire Policy ‘C’ 

(as per All India Fire Tariff), are eligible 

for subsidy under the above Scheme 

which envisages reimbursement of 

the insurance premium paid by the 

eligible units through a revolving fund 

which is maintained by the NEDFi 

and is supplemented by the Govt. 

from time to time based on the 

requirements received from NEDFi. 

NEDFi is the designated agency for 

disbursements under the above 

Schemes. 



released to NEDFi (upto 31.12.2006) 

for North East. 

Incentives/Concessions 

v 

v 

100% excise duty exemption for a 

period of 10 years from 

commencement of commercial 

production to new industrial units 

and existing units on their substantial 

expansion. The Notification regarding 

excise exemptions has been issued by 

the Ministry of Finance on 14th 

November 2002. 

Capital Investment Subsidy @ 15% for 

investment in plant & machinery 

subject to a maximum of Rs.30 lakh 

would be provided to all new units 

and the existing units on substantial 

expansion under the Central Capital 

Investment Subsidy Scheme, 2002 

notified on 22nd October 2002. 

Evaluation of NEIP 

v 

To assess the impact of the NEIP on 

the industrialisation of North-Eastern 

region, a study was commissioned with 

Tata Economic Consultancy Services 

through NEDFi. Based on the study 

report, discussions with all the State 

Governments of North-East Region and 

other stakeholders, suitable 

modifications in the NEIP to make it 

more effective is under consideration. 

Special Package for Jammu & 

Kashmir 

New Industrial policy and other 

concessions for the state of J&K was 

notified vide OM dated 14th June 2002. 

v 

v 

v 

Interest subsidy of 3% on working 

capital loan would be allowed to all 

new units and the existing units on 

substantial expansion under the 

Central Interest Subsidy Scheme, 

2002 notified on 22nd October 2002. 

Insurance premium to the extent of 

100% on capital investment would be 

available to all new units and the 

existing units on substantial 

expansion under the Central 

Comprehensive Scheme, 2002 

notified on 22.10.2002. 

Income tax exemption would continue 

as per existing dispensation 

applicable to Jammu & Kashmir under 

section 80 IB of Income Tax Act. 

46


v 

Industries ineligible for concession 

under the package are cigarettes/ 

cigars of tobacco, manufactured 

tobacco and substitutes, distillation/ 

brewing of alcoholic drinks and 

manufacture of branded soft drinks. 

Implementing Agency 

v 

v 

Formation of Jammu & Kashmir 

Development Finance Corporation 

(JKDFC) has been finalised and it has 

been notified as the Nodal Agency for 

routing the disbursal of subsidies. 

An amount of Rs. 77.89 crores has been 

released to the Nodal Agency as of now 

under various schemes namely Central 

Capital Investment Subsidy, Central 

Interest Subsidy, Comprehensive 

Insurance Scheme, Transport Subsidy 

Scheme, Growth Centre Scheme and 

for setting up of Jammu & Kashmir 

Entrepreneurs Development Institute. 

Progress Made 

worked out for the Special Category States 

including Uttarakhand. The industries 

eligible for such incentives will be 

environment friendly with potential for local 

employment generation and use of local 

resources. New Industrial policy and 

concessions for the state of Uttarakhand and 

Himachal Pradesh were notified vide OM No. 

1(10)/2001-NER dated 7th January 2003. 

Incentives/concessions 

v 

v 

100% excise duty exemption for a 

period of 10 years to new industrial 

units and existing units on their 

substantial expansion. 

100% income tax exemption for initial 

period of five years and thereafter 30% 

for companies and 25% for other than 

companies for a further period of five 

years for the entire state of 

Uttarakhand and Himachal Pradesh 

from the date of commencement of 

commercial production. 

v 

An investment of Rs. 128.29 crore has 

taken place in the State of J&K, which 

has generated employment of 9805 

persons. 

Special Packages for Himachal 

Pradesh and Uttarakhand 

The Hon’ble Prime Minister, during the 

visit to Uttrakhand from 29 to 31 March 

2002 had, inter-alia made an 

announcement that ‘Income Tax and 

Central Excise concessions to attract 

investments in the industrial sector will be 

v 

v 

Capital Investment Subsidy @ 15% for 

investment in plant & machinery 

subject to a maximum of Rs.30 lakh 

would be provided to all new units and 

the existing units on their substantial 

expansion under the Central Capital 

Investment Subsidy Scheme, 2003 

notified on 8th January 2003. 

The financing pattern of Integrated 

Infrastructure Development Centres 

(IIDC) between Government of India 

and SIDBI will change from the 

existing ratio of 2:3 to 4:1. 

47


v 

The central assistance under the 

Growth Centre Scheme is raised from 

Rs.10 crore to Rs.15 crore per Centre 

as in the North-East Industrial Policy. 

v The funding pattern between 

Government of India and both the 

States would be changed from 50:50 

to 90:10 under Deen dayal Hathkargha 

Protsahan Yojna. Ministry of Textiles 

would extend its package of incentives, 

as notified for North-Eastern States, to 

the states of Uttarakhand and 

Himachal Pradesh also. 

by Ministry of Environment and 

Forest would continue to operate in 

the Doon Valley Area and the 

industries notified under it would be 

excluded from the proposed 

concessions in the Doon Valley Area 

of the state of Uttarakhand. 

Implementing Agency 

v 

HPSIDC and SIDCUL are the Nodal 

Agencies for routing the disbursal of 

subsidy for Himachal Pradesh and 

Uttarakhand, respectively. 

v 

v 

v 

Ministry of Food Processing Industries 

would include Uttarakhand in difficult 

areas category. The state of Himachal 

Pradesh is already included in the 

difficult areas category. 

Ministry of Agro & Rural Industries 

would provide for states of Himachal 

Pradesh and Uttarakhand relaxation 

under Pradhan Mantri Rozgar Yojana 

(PMRY) with respect to Age (i.e. 

18-40 years from 18-35 years) and 

Subsidy (@ 15% of the project cost 

subject to a ceiling of Rs.15,000/- 

per entrepreneur). 

In order to utilise local resources in 

an environment friendly manner, 

certain polluting industries and those 

not utilising local resources would be 

excluded from the purview of proposed 

concessions. In addition, the Doon 

Valley Notification dated 01.02.1989 

as amended from time to time, issued 

v 

An amount of Rs.31.30 crore and an 

amount of Rs. 24.91 crore have been 

released to the Nodal Agencies 

HPSIDC and SIDCUL, respectively, 

as of now, under various schemes 

namely Central Capital Investment 

Scheme, Transport Subsidy 

Scheme, Growth Centre Scheme, 

etc. 

Progress Made 

v 

The investment that has taken place 

in States of Uttarakhand and 

Himachal Pradesh are Rs.1,173 crore 

and Rs.1,600 crore respectively. 

Further, investment of Rs.21,500 crore 

and Rs. 24,513 crore are in the 

pipeline in Uttarakhand and Himachal 

Pradesh. The two states have 

generated employment of 44,000 

persons and 28,600 persons, 

respectively. In addition, 1,50,000 

persons in Uttarakhand and 2,82,000 

persons in Himachal Pradesh are likely 

to be employed in the coming years. 

48


7 

PERFORMANCE OF SELECT INDUSTRIES 

Performance of industries in general 

and select industries like salt, cement, 

leather, tyre and rubber, paper and pulp, 

light electrical, consumer durables, 

consumer goods, light industrial machinery, 

light engineering industries in particular, are 

regularly monitored by this Department. 

Brief background of select industries is 

explained in the following paragraphs. 

Cement Industry 

Capacity and Production 

India is the second largest 

manufacturer of cement in the world. The 

modern Indian cement plants are the stateof-the-art 

plants and comparable to the 

best in the world. The cement industry 

Dr. Ajay Dua, Secretary (Department of IPP) addressing 45th Annual session of Cement Manufacturers’ 

Association in New Delhi 

49


comprises 129 large cement plants with 

an installed capacity of 165.10 million 

tonnes and more than 206 operating 

mini cement plants with an estimated 

capacity of 11.10 million tonnes per 

annum, making a total installed capacity 

of 176.20 million tonnes. There are few 

large cement plants owned by the Central 

and the State Governments. 

The production of cement during 

the year 2006-07 is estimated at 162 

million tonnes. Cement production during 

the year 2006-07 (April to December, 2006) 

has been 117.37 million tonnes registering 

a growth of 9.87 per cent over the 

corresponding period of 2005-06. India 

exported 6.07 million tonnes of cement and 

clinker during April-December, 2006. 

The Government and the industry 

continue to take initiatives to improve 

its performance further. To achieve this 

objective, the Government constituted 

a Working Group on Cement Industry 

for the formulation of the 11th Plan. 

As per the report of the Working Group, 

the cement demand is likely to grow @11.5 

per cent per annum during the 11th Plan 

and cement production and capacity by 

the end of the 11th Plan are estimated to 

be 269 million tonnes and 298 million 

tonnes, respectively, with capacity 

utilisation of 90 per cent. To attain the 

targeted capacity addition, an investment 

of Rs. 52,400 crore would be required 

during the 11th Plan. 

The working group report also seeks 

regulatory support for creating framework 

for co-processing of wastes, co-generation 

of power and enhanced support to R&D 

Activities to align the technology regime 

with the best of the world. The report also 

emphasises the importance of bulk cement 

transportation, use of ready mix concrete 

and reduction of taxes and levies on 

cement. The following table gives 

production of cement in the country: 

Table 7.1 

Year No. of Units Production 

(millions/ 

tonnes) 

2005-06 129 large + 300 147.81 

(Approx) in 

cement plants 

2006-07 129 large + 206 162.00 

(up to mini cement 

Dec., 2006) plants 

Ceramic Industry 

Ceramic Industry in India is about 100 

years old. It comprises Ceramic Tiles, 

Sanitaryware and Crockery items. Ceramic 

products are manufactured both in the 

large and small scale Sector with wide 

variance in type, size, quality and standard. 

India ranks 7th in the world in terms of 

production of ceramic tiles and produced 

200 million sq. meters of ceramic tiles, 

out of global production of 6,400 million 

sq. meters during 2005-06. State-of-theart 

ceramic goods are being manufactured 

in the country and the technology adopted 

by the Indian ceramic industry is of 

international standards. 


There are at present 16 units in the 

organized sector with an installed capacity 

of 21,00,000 MT. This accounts for 2.5 per 

50


cent of world ceramic tile production. 

Ceramic tile industry has been growing at 

about 12 per cent per annum. With the 

growth in the housing sector, the demand of 

ceramic tiles is expected to increase. Indian 

tiles are competitive in the international 

market. These are exported to East and West 

Asian countries. The exports during 2005- 

06 was worth Rs. 146.19 crore. 

Sanitaryware is manufactured both in 

the large and small sector with variations in 

type, range, quality and standard. At present 

the production capacity in organised sector 

is 1,36,500 MT per annum and in small 

scale sector, there are over 200 Units 

with capacity of 50,000 MT per annum. 

The industry has turnover of Rs.400-500 

crore. This industry has been growing by 

about 5 per cent per annum during the 

last two years. There is significant export 

potential for sanitaryware. These are 

presently being exported to East and West 

Asia, Africa, Europe and Canada. The 

export was of the order of Rs. 82.65 crore 

during 2005-06. 

Potteryware signifying crockery and 

tableware are produced both in the large 

scale and the small scale sector. There 

are 16 units in the organised sector 

with a total installed capacity of 43,000 

MT per annum. In the small scale sector, 

there are over 1,200 plants with a 

capacity of 3,00,000 MT per annum. 

Majority of the production of ceramics 

tableware is of bone china and 

stoneware. This industry in India is 

highly-labour intensive while in USA, 

UK, Japan and other countries there is 

full automation. Quality of finished 

design and shapes are still below 

international standards. The equipments 

are obsolete and need to be upgraded 

to meet international standard. The 

export of potteryware during 2005-06 

was of the order of Rs.49.39 crore. The 

details of productions for ceramic industry 

is given in Table 7.2. 

Cigarette Industry 

The Cigarette Industry is quite old in 

India. Besides being agro-based industry, 

it is highly labour-intensive and provides 

livelihood to about 5 million people directly. 

It requires licence under the Industries 

(Development & Regulation) Act, 1951 for 

setting up of any manufacturing unit. 

Table 7.2 

2005-06 2006-07 

S.No. Name of the Accounting No. of units Production No. of units Production 

Industry unit (upto Dec. 

2006) 

1. Ceramic Tiles Million.Sq. 16 + 200 196.5 Million 16 + 200 189.75 

Million 

Mtr. SSI units Sq. Mtr. SSI units Sq. Mtr. 

2. Potteryware M.T. 16 + 1200 39,400 16 +1200 39187 M.T. 

SSI units 

3. Sanitaryware M.T. 7 + 200 2,75,400 7 + 200 251.625 MT 

51



There are 22 units in the organised 

sector engaged in the manufacture of 

cigarettes with a total installed capacity of 

about 277.42 billion pieces per annum. The 

production of cigarettes during the year 2005- 

06 was 75,711 million nos. During the current 

year 2006-2007(up to December 2006), the 

production has been 62,907 million pieces. 

The export and import of cigarettes during 

2005-06 was of the magnitude of Rs. 114.44 

crore and Rs. 45.26 crore, respectively. 

Explosives Industry 

There are 64 factories both in the 

medium and SSI sectors with installed 

capacity of 1703 metric tonnes of 

gun powder, 17,70,550 MT of high 

explosives, 216 million meters of safety 

fuse, 467 million meters of detonating 

fuse and 883 million detonators, etc. 

The number of licenses issued under the 

Explosives Act and Petroleum Act 

during the last three years is given in 

Table 7.3. 

Table 7.3 

Number of Licensed Premises under Explosives Act & Petroleum Act 

Year Explosives Act Petroleum Act Total 

2003-04 60365 141123 201488 

2004-05 60490 145501 205991 

2005-06 68061 169026 237087 

2006-07 68503 177146 245649 

(upto 31-12-2006) 

Table 7.4 

Production of Explosives for the last 5 years 

Production in Metric Tonnes 

Description Licensed 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Estimated 

Capacity 

up to 

31.12.06 

Class 1 1698.00 127.588 291.915 123.00 295 515 569 460 

Gunpowder 

Class 2 736560.22 162216.42 164649.98 154560 178572 191633 201596 163293 

a. Catridge 

b. Site-Mixed 970361.00 181483.94 198527.90 215645 217120 190924 245137 198561 

Class 3 

Div. I Nitrogl- 35000.00 33106.O0 30579.43 30450.00 23306.00 Nil 263.5 Nil 

cyerin based 

Div. 2 

a)Booster (cast) 3008.00 1396.86 1421.56 1189.00 873.00 875.00 979 793 

b)*PETN 7285 .00 2888.00 2790.00 1950.00 2090.00 2540.00 2601 2107 

*PETN – Pentra Eryrithinol Tetra Nitrate 

52


Production in Million Meters/Numbers 

Class – 6 Licensed 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Estimated 

Explosives capacity Upto 

31.12.2006 

Div. 1 218.10 118.02 63.7612 99.00 155.00 109.00 158 124 

Safety Fuse 

Div. 2 

Detonating 439.50 518.82 208.0661 135.00 164.00 209.00 205 161 

Fuse 

Div. 3 

Detonators 883.40 417.65 436.6756 451.00 419.00 432.00 436 333 

During the year, there has been 

significant growth in the production and 

delivery of site mixed explosives with 

marginal decrease in cartridge explosives. 

In view of public safety and security, the 

Government has issued a notification 

under the Explosives Act, 1884 prohibiting 

the possession, sale and use of Nitro- 

Glycerin (NG) based explosives. Under the 

technical guidance of Central Mining 

Research Institute, emulsion based 

substitute of P3 type NG based explosives 

for gallery blasting technique in coal mining 

has been successfully developed. 

Glass Industry 

All glass items ranging from flat glass 

(including sheet, float, figured, wired, 

safety, mirror glass), hollow-ware 

containers, vacuum flasks, refills, 

laboratory glassware to other items such 

as bangles, beads, pearls etc. are covered 

under glass industry. It does not require a 

licence to set up any glass industry. 

There has been growing acceptability 

of Indian flat glass products in the global 

market with continuous exploration of new 

markets of the world. The exports during 

2005-06 was around 94,000 metric tonne 

of different varieties of sheet and float glass. 

The exports during the current year were 

1.20 lakhs MT (April-December, 2006). 

Technology upgradation is taking 

place in fibre glass composites. There is 

considerable scope in demand for glass 

fibre products particularly due to growth 

in petrochemical sector and allied 

products. The production of flat glass 

during 2005-06 was around 8,05,800 

million tonne and during 2006-07 (April- 

Dec., 2006) 6,67,000 million tonne. The 

export & import of float glass/sheets during 

2005-06 was Rs. 37.13 crore and Rs. 

203.64 crore, respectively. 

The production of glass & glassware 

during 2005-06 was 7,57,987 million tonne 

and during 2006-07(up to December) was 

6,08,273 million tonne. The export and 

import of glass & glassware during 2005- 

06 was of the magnitude of Rs.1043.68 

crore and Rs.1306.97 crore, respectively. 

Granite & Marble Industry 

India is one of major producer and 

exporter of granite and other stones. India 

53


has vast resources of granite with 

about 120 varieties of different colours 

and textures. Most of the units are 

producing products of granite tiles, 

building slabs and monuments 

simultaneously. Eighty to ninety per cent 

of the total production is exported. The 

export of granite during 2005-06 was 

about Rs. 3490.59 crore. Most of the 

units in the marble industry are in the 

small scale sector. The export of marble 

and its products during 2005-06 was 

about Rs.166.90 crore. 

Leather Industry 

The Leather Industry is one of the 

oldest industry and quite important in 

view of its substantial export earnings, 

employment potential and growth. 

Leather and its products are amongst the 

top 10 export earners for the country. The 

leather sector provides employment to 

about 2.5 million people, mainly from the 

weaker sections/minorities, of which 

about 30 per cent are women. 

India has vast natural resources of 

raw hides & skins. It has been estimated 

that about 10 per cent of the world’s supply 

of leather is processed in India. However, 

the share of India in global leather trade is 

not more than 3 per cent. Obsolete 

technology, lack of standardisation and 

poor marketing infrastructure has been 

other factors associated with the sector not 

growing to its potential. 

During the last two decades, the export 

of leather and leather products from India 

has undergone a structural change. India 

was traditionally an exporter of raw hides 

and skins and semi-processed leather. 

However, in the last two decades the share 

of leather footwear, leather garments, leather 

goods, footwear components and several 

other articles of leather in the total exports 

has increased substantially as a result of the 

Government’s policy to encourage export of 

value-added leather products. 

India’s Export performance of the 

leather sector during the last five years is 

presented in the Table 7.5. 

Table 7.5 

(In Million US$) 

CATEGORY 2001-02 2002-03 2003-04 2004-05 2005-06 

Finished Leather 459.25 508.83 555.71 607.73 606.06 

Leather Footwear 395.39 423.30 553.04 657.78 786.76 

Footwear Components 233.94 175.07 161.27 179.21 179.04 

Leather Garments 378.75 272.08 301.08 329.44 328.44 

Leather Goods 407.16 425.39 539.21 585.72 649.14 

Saddlery and Harness 35.64 43.66 52.71 61.71 76.40 

Non-leather Footwear 26.02 26.88 53.42 73.78 68.75 

TOTAL 1936.14 1875.21 2216.45 2495.37 2694.59 

Source: DGCI&S 

54


Industrial 

Provisions 

Licensing/Reservation 

All the items of manufacture in the 

leather sector have been de-reserved from 

the SSI list, vide Notification No. S.O.603 

(E) dated 29th June 2001 and S.O.No.649 

(E) dated 3rd June 2003. At present, all 

items of manufacture in the leather sector 

except full PVC footwear chappals, sandals 

and shoes and metal fittings for leather 

goods and garments have been dereserved. 

Initiatives Taken by the Central 

Government 

i. Policy Support Measures: Leather 

industry was identified as one of the 

“Thrust Sectors” having significant export 

growth prospects and employment 

generation. Accordingly, special focus 

initiatives have been announced in the 

National Foreign Trade Policy 2004-09. 

These include: 

Union Minister of Commerce and Industry, Shri 

Kamal Nath at the “India Leather Summit” 

l 

l 

Enhancement of duty-free entitlement 

from 1 per cent to 3 per cent for leather 

products and footwear with wider 

coverage of critical inputs; 

CVD exemption on lining and 

interlining materials under the duty 

free scheme; 

l Customs duty exempted on 

machinery & equipments for Effluent 

Treatment Plants; 

l 

l 

CVD exemption allowed on fur-skins 

etc; and 

5 per cent Concessional import duty 

extended to certain additional 

machinery. 

ii) Support towards market development 

and export promotion: The Government 

is supporting implementation of an 

aggressive International Marketing 

Programme through the Market 

Development Assistance and Market 

Access Initiative Schemes. These include 

organising group participation of leather 

exporters in leading International Leather 

Fairs and organising exclusive Buyer-Seller 

Meets in select markets. 

iii) Setting up of Inter-Ministerial 

Committee: An Inter-Ministerial 

Committee under the Chairmanship of 

Member (Industry), Planning Commission 

has been constituted on 6 January 2006 

in order to analyse the strengths and 

weaknesses of the Indian leather industry 

with a view to evolving a comprehensive 

strategy for the development of the leather 

55


sector. The Committee will also recommend 

measures for building a strong and 

sustainable raw material base and 

technology upgradation besides 

formulating strategies for adopting a 

mission mode approach for enhancing the 

competitiveness of the leather sector and 

increasing investments in the leather and 

related non-leather sectors. 

iv) Identification of Leather Sector as 

priority: In order to improve 

competitiveness of manufacturing in India 

and to increase its share in the economy 

as a means to provide larger employment 

opportunities, National Manufacturing 

Competitiveness Council (NMCC) 

recommended that Mission Mode for 

leather and leather goods sector be set up. 

The Prime Minister’s Office has identified 

development of leather industry under 

Mission Mode as an initiative/programme 

under Strategies and Priorities for 2006 for 

the Department of Industrial Policy and 

Promotion. Accordingly, “Strategic 

Initiatives and timelines for Leather 

Industry” has been prepared in 

consultation with all the stake holders for 

taking Indian leather industry to a new 

height. The target is to achieve 

US$ 7 billion export by 2010 for the Leather 

Industry. 

v) Schemes of the 10th Five-Year 

Plan: An outlay of Rs. 400 crore has been 

made for the 10th Five Year Plan (2002- 

07) towards implementation of various 

plan schemes under the “Indian Leather 

Development Programme” (ILDP). The 

ILDP comprises of two programmes, viz., 

Integrated Development of Leather Sector 

(IDLS) and “Infrastructure Strengthening 

of Leather Sector” (ISLS) with outlays of 

Rs. 290 crore and Rs. 110 crore 

respectively. 

The Scheme “Integrated Development 

of Leather Sector (IDLS)” was notified on 

3 November 2005 for technology 

upgradation and modernisation in all the 

segments of the leather industry, namely, 

tanneries, footwear components, saddlery, 

leather goods and garments. Financial 

assistance under the scheme is provided 

for plant and machinery to the extent of 

30 per cent for SSI and 20 per cent for non- 

SSI units subject to a ceiling of Rs. 50 lakh 

for both categories. The scheme is being 

implemented through two Project 

Implementing Units, viz., Central Leather 

Research Institute at Chennai for the 

tannery sector and Footwear Design & 

Development Institute at Noida for leather 

goods and garments, saddlery, leather 

footwear and footwear components. Small 

Industries Development Bank of India has 

been appointed as the nodal bank for the 

scheme. 

The aim of the ISLS Scheme is to 

provide infrastructure facilities and 

capacity building in the leather sector. This 

comprises of 11 sub-programmes, viz., 

Leather Complex (Tannery); Footwear 

Complex; Footwear Component Park; 

INTECHMART; Saddlery Development; 

Human Resource Development; Non- 

Leather Footwear; Support to Rural 

Artisans; Leather Goods Park; Global 

Benchmarking and Establishment of 

National Institute of Footwear Design and 

Technology. 

56


Some of the schemes such as 

Support to Rural Artisans, INTECHMART 

and Saddlery Development are under 

implementation as continuous schemes 

from the 9th Five-Year Plan. Under the 

Scheme ‘Support to Rural Artisans’ 

marketing and technology support to 

Indian traditional and ethnic footwear 

products like Mojari, Jooti and Kolhapuri 

is being provided. A display centre for 

ethnic footwear has also been established 

at Footwear Design & Development 

Institute campus. The Scheme 

INTECHMART aims at strengthening the 

market accessibility to Indian leather 

products through organisation of 

international leather fairs in India and 

leather delegations to potential countries 

for promotion of Foreign Direct Investment 

and Foreign Collaborations. Saddlery 

Development Programme is being 

implemented in collaboration with Indian 

Institute of Technology (IIT), Kanpur who 

have developed 16” saddle trees keeping 

in view the demand from abroad and India. 

In the non-leather footwear sector, two 

Common Facility Centres at Mumbai and 

Noida are being established to upgrade the 

systems of manufacture and to provide 

marketing linkages. The aim of the 

scheme HRD Mission is to develop 

technology culture in leather sector 

whereas the scheme Global Benchmarking 

provides international standards like ISO 

14000, ISO 18000, etc., to a selected 

number of leather units. The aim of the 

Scheme “Establishment of National 

Institute of Footwear Design and 

Technology” (to be established in 

Sultanpur, UP) is to cater to the demand 

of skilled and semi-skilled manpower by 

the Leather Industry. The other schemes 

are under various stages of 

implementation/approval. 

vi) Proposal for 11th Plan: The following 

challenges have been identified for the 

leather sector: 

l 

l 

l 

l 

l 

l 

l 

l 

Strategy to achieve US $ 7 billion export 

turnover by the end of XI Five Year Plan; 

To increase the indigenous supply of 

raw hides & skins so as to reduce the 

import of raw hides & skins; 

Need to create infrastructure to 

achieve the projected export target; 

To create mechanism by which work 

force will be available to the leather 

sector; 

To increase the share of India’s export 

in major markets and to find out new 

markets; 

To compete with the most competitive 

in price segments; 

To position Indian leather products 

in the branded segment and fashion 

segment; and 

To develop a centre of excellence in 

designing and pattern making. 

Based on the above challenges the 

following interventions needs to be 

undertaken during 11 th Five-Year Plan: 

l 

Investment promotion programmes; 

57


l 

l 

l 

l 

Creation of SEZ Park and Integrated 

leather park; 

Modernisation of leather sector with 

revised guidelines; 

Developing a center of excellence for 

design development and HRD; 

Facilitating technology transfers from 

foreign countries through 

international cooperation; 

l To develop and implement 

comprehensive Environmental 

Management Programme for tanning 

sector; 

l 

l 

l 

l 

Design Studio to be set up by the 

industry to develop new and 

innovative designs; 

To develop scheme for quality 

certification and encourage best 

practices in the manufacturing of 

leather products; 

To promote Brand India Image by 

positioning Indian leather products in 

the branded segment either by 

developing own brands or through 

collaboration with international brands; 

Modernization of slaughter houses 

during 11 th Five Year Plan with the 

objective to achieve better quality 

hides & skins; and 

l To create the supply chain 

management program for leather and 

leather product industry by creating 

warehousing facilities as and when 

required. 

The Department, under the Plan 

Scheme, “Indian Leather Development 

Programme”, has proposed budget allocation 

of Rs. 882 crore during the 11th Plan in order 

to achieve the identified initiatives. 

Light Electrical Industry Sector 

The Light Electrical Industry is quite 

vast and diverse industry with a number of 

distinct products and sub-products. It 

includes industrial goods like electrical 

wires and cables, transmission towers, 

cranes, lifts & escalators, refrigerators, 

washing machines, air conditioners, storage 

batteries, dry cell batteries, electrical lamps 

& tubes, medical & surgical instruments 

and process control instrument industry 

etc. A brief of some of these industries is 

given below: 

Electrical Wires and Cables Industry 

Electrical cables are used for both 

transmission of electrical energy and 

electronics data. The cables industry in India 

started with the manufacture of cables for 

transmission of electrical energy. Indian 

cable industry is capable of manufacturing 

a large variety of cables which includes 

communication cables such as jelly-filled 

telephone cables, optic fibre cables, local area 

network cables, switchboard cables, co–axial 

cables, VSAT cables, electrical cables such 

as electrical wires, winding wires, 

automotive/battery cables, UPS cables, 

58


flexible wires, low voltage power cables and 

EHT power cables. The major user industries 

of wires and cables are power, electrical 

equipment, electronic appliances and 

telecommunication, entertainment and 

construction industry. This is an important 

part of any electrical and electronic system 

as it is responsible for carrying energy, signal 

and data. In 2005-06, the non-SSI sector 

have reported production of 8.86 lakh core 

kms against 7.40 lakh core km in 2004-05, 

showing healthy growth of 19.65 per cent. 

India exported wires and cables of value 

around Rs 724.7 crore in 2005-06 against 

import of around Rs 1551.4 crore in the same 

period. The industry is de-licensed and 

eligible for automatic approval for Foreign 

Direct Investment up to 100 per cent. 

Transmission Towers 

Transmission tower industry is 

experiencing a healthy growth since last 

few years. India exported Transmission 

towers of around Rs. 312.3 crore in 2005- 

06 against Rs. 227 crores in 2004-05 with 

growth of around 37 per cent. On the other 

hand, the import of transmission tower has 

decreased from Rs 48.52 crores in 2004- 

05 to Rs 21.73 crore registering a fall of 

more than 50 per cent. The Indian 

transmission towers industry is growing 

steadily keeping pace with growth of 

industries and subsequent increase in 

demand of power. There is an increasing 

shift in India to have larger power stations, 

particularly super thermal power stations. 

Consequently while there would be fewer 

but larger power generating stations and 

the demand for transmission of energy 

would grow as power is to be transmitted 

from generating stations to the load centre. 

The transmission voltages are being 

increased in order to reduce transmission 

losses. The industry has set up facilities 

for testing transmission towers up to 1000 

KV with the objective of catering to future 

growth of transmission systems in the 

country as well as to export demand. The 

industry is de-licensed and eligible for 

automatic approval for Foreign Direct 

Investment without any restriction. 

Cranes 

Cranes are machines that use levers 

and/or pulleys to lift significant weights. 

A crane consists of a telescopic boom (arm) 

or steel truss that mounts its movable 

platform. Either pulleys or levers raise the 

boom. Generally a hook suspends from the 

boom. A wide range of cranes are 

manufactured in the country and these 

include Electric Overhead Traveling (EOT) 

cranes, mobile cranes, ladder cranes, 

hydraulic decks, crab cranes, floating 

cranes, controller cranes, etc. In 2005-06, 

non-SSI sector reported production of 

11,443 tonnes of cranes registering a 

healthy growth of 36 per cent over the 

previous year. India imported cranes of 

value around Rs. 1045.5 crore in 2005-06 

against export of around Rs. 95.76 crore 

in the same period. The industry is delicensed 

and eligible for automatic approval 

for Foreign Direct Investment up to 

100 per cent. 

Lifts and Escalators 

Rapid urbanisation and robust activity 

in the construction industry and 

59


corporatisation of the real estate sector has 

led to a healthy growth of this industry. The 

use of lifts and escalators is increasing 

rapidly due to substantial investments in 

construction of multi-storied housing 

complexes, large malls and supermarkets 

of international standards, modernisation 

of airports and railway stations apart from 

industrial sectors. A wide range of lifts and 

escalators are manufactured in India. These 

include single speed, double speed, gearless, 

hydraulic, servo and Variable Voltage 

Variable Frequency (VVVF) elevators. The 

industry has experienced healthy growth 

during the recent years. The production of 

lifts in the year 2005-06 was reported to be 

7089 numbers which was approximately 25 

per cent more than in the previous year. The 



Investment up to 100 per cent. 

Refrigerators 

Refrigerators have been manufactured 

in India since 1950s. After the liberalisation 

of 1991 and removal of restrictions, a large 

number of international brands entered in 

the field of refrigerator industry. The Industry 

has become highly competitive and offers 

wide choice to consumers. There are two 

basic designs adopted in refrigerators 

presently being manufactured in the country. 

These are commonly referred to as Direct 

Cool (DC) and Frost-Free (FF) Refrigerators. 

In 2000, the direct cool segment constituted 

82 per cent of the market. Another major 

change in refrigerator industry is adoption 

of non-CFC technology. The Montreal 

Protocol signed in 1987, which India joined 

in September 1992 mandates the gradual 

phase-out/ complete eradication of CFCs 

within a structured time frame. In fulfilling 

those obligations, the refrigerator 

manufacturers are switching over to non- 

CFC based refrigerators. 

The industry has experienced healthy 

growth during the recent years. In 2005- 

06, the units in non-SSI sector have 

reported production of 51.3 lakh numbers 

of refrigerators against 43.6 lakh numbers 

in 2004-05 registering a healthy growth of 

around 18 per cent. India exported 

refrigerators valued around Rs. 332.06 

crores in 2005-06 against import of around 

Rs. 527.86 crore during the same period. 

The industry is de-licensed and eligible for 


Investment up to 100 per cent. 

Washing Machines 

Washing machine has become one 

of the essential consumer durable items 

of the urban Indian family. Presently the 

consumer has the option to buy different 

types of washing machines like Manual, 

Semi-Automatic, Fully Automatic, Fuzzy 

Control and Neuro-Fuzzy control washing 

machines. The price and the technology 

of the above types of washing machines 

are in ascending order. Some of the 

emerging new technologies in the 

washing machine sector are: aero power, 

triple cascade tornado wash, digital 

intelligence and unique optical sensor, 

etc. 

In 2005-06, the non-SSI sector have 

reported production of 17.31 lakh 

washing machines, which was 

60


approximately 9 per cent more than in 

the previous year. India exported washing 

machines of value around Rs. 86.52 crore 

in 2005-06 against import of around Rs. 

107.91 crore during the same period. The 




Air Conditioners 

The common man is now using air 

conditioners which was previously the 

privilege of the rich. With the growth of 

economy and fall in price of air 

conditioners, it has come within reach of 

common people. Accordingly, the 

production of air conditioners has 

increased from 3.87 lakh in 2004-05 to 

5.15 lakh in 2005-06, registering a 

growth of 33 per cent. The airconditioner 

market can be classified into three 

segments: window AC, split AC and 

central AC. The split ACs are gaining 

popularity due to limitation of space and 

increase in number of people living in 

flats in multi-storied complexes and also 

due to less noise. With a perceptible 

increase in the living standards of the 

Indian middle class, there has been 

tremendous shift in demand for air 

conditioners from non-branded 

assembled air conditioners to branded 

products. 

Like refrigerators, the air conditioners 

manufacturing industry is also adopting 

non-CFC technology to fulfill the 

obligations of the Montreal Protocol. The 

Montreal Protocol mandates the gradual 

phase-out/ complete eradication of CFCs 

within a structured time frame. During 

2005-06 the export of air conditioners was 

valued at Rs. 180.3 crore against import of 

Rs 913.7 crore. The industry is de-licensed 

and eligible for automatic approval for 

Foreign Direct Investment up to 100 per 

cent. 

Storage Batteries 

Storage Batteries are also referred to 

as lead acid batteries as lead is the basic 

materials used in their manufacture. Lead 

acid batteries find wide application in 

motorcars, trucks, aircrafts, ships, 

submarines, railways, etc. The major use 

of the product is in automobiles for 

providing energy for ignition of the engine 

and lighting. In addition, it is also used 

for uninterrupted power supply for 

computers, emergency lights for houses, 

telephone systems, power tools, 

communication devices, as power source 

for mining and material handling 

equipments, etc. A new application of the 

product has emerged today in electric 

vehicles. The average life of this battery is 

approximately 1 to 2 years and therefore 

these batteries will be needed throughout 

the life of the vehicle or the machinery in 

use. This indicates that ready market of 

the product will always exist. 

The lead acid battery enjoys a market 

share of more than 60 per cent of the total 

sales of all kind of batteries in the world. 

With the phenomenal growth of automobile 

industries, the demand of such batteries 

is also increasing at a very fast pace. 

Although there are few large scale 

manufacturers of the product dominating 

61


in India, there are large number of very 

small scale units manufacturing the 

product in an unorganised manner. 

The non-SSI sector has reported 

production of 359.9 lakh batteries 

registering a decline of 6.1 per cent. During 

2005-06, export was for Rs 200.7 crore 

against import of Rs. 521.8 crore of storage 

batteries. The industry is de-licensed and 

eligible for automatic approval for Foreign 

Direct Investment without any restriction. 

Dry Cell Batteries 

The battery industry can be classified 

into two segments — primary and 

secondary. Primary batteries are typically 

non-rechargeable. Dry cell batteries fit into 

this category. Dry cell batteries are one of 

the most commonly used items. Although 

there have been improvements in 

manufacture of dry cells, the basic 

structure remains the same. In the 

liberalised economic environment, 

inexpensive batteries like rechargeable 

cells are coming into the market. New 

types of dry cell batteries with longer shelf 

life and greater dependability have also 

come up. Leak proof dry cells are used in 

expensive electronic/auto equipment and 

toys. Nickel cadmium batteries and other 

rechargeable batteries are manufactured 

in the country to meet the requirement of 

defence, telecommunications and 

electronics. Environment-friendly alkaline 

batteries, which are mercury free, are also 

being manufactured in the country. The 

production of dry cells in the non-SSI 

sector in 2005-06 is reported to be 2678.9 

million numbers against 2683.2 million 

numbers in 2004-05, registering a 

negative growth of 0.16 per cent. During 

2005-06 export was valued at Rs. 41.4 

crore against import of Rs. 184.6 crore of 

dry cell batteries. The industry is delicensed 

and eligible for automatic 

approval for Foreign Direct Investment up 

to 100 per cent. 

Electrical Lamps and Tubes 

Electric Lighting Industry is well 

developed in the country. A wide range 

of lamps and tubes are manufactured in 

the country. They range from general 

lighting service lamps such as 

incandescent bulbs, halogen lamps, to 

gas discharge lamps such as fluorescent 

tube light, compact fluorescent lamp, 

high pressure mercury vapour lamps, 

metal halide lamps, low pressure and 

high pressure sodium vapour lamps and 

variety of special lamps. The higher 

energy cost have led to the development 

of energy efficient lamps consuming less 

power and giving output as close to 

daylight. With energy conservation 

assuming importance, there is increasing 

demand for lamps of higher efficiency. 

Compact Fluorescent Lamps (CFL) which 

are claimed to save up to 80 per cent of 

the electricity and having 10 times longer 

life for same light output, are getting more 

popular. Manufacturers are adopting 

imported designs and know-how through 

technical collaborations. Several 

established manufacturers have started 

manufacturing energy efficient lamps for 

public lighting and also for home 

applications. The industry has witnessed 

substantial growth during the last few 

62


years. The production of GLS lamps in 

the non-SSI sector in 2005-06 is reported 

to be 484.2 million whereas the 

production of fluorescent tube in the 

same period was 201.2 million. The 




Light Engineering Industry Sector 

The Light Engineering Industry is a 

diverse industry with a number of 

distinctive sectors. This industry includes 

low-tech item castings, forgings and 

fasteners to the highly sophisticated microprocessors-based 

process control 

equipment and diagnostic medical 

instruments. This group also includes 

industries like bearings, steel pipes and 

tubes, etc. The products covered under the 

engineering industry are largely used as 

input to the capital goods industry. Hence 

the demand of this sector depends on the 

demand of the capital goods industry. 

Roller Bearing Industry 

Roller bearings are widely used in the 

rotating parts of all machines across all 

sectors such as automobiles, electric 

motors, diesel engines, industrial 

machinery & machine tools, etc. Roller 

bearings generally consist of inner ring, 

outer ring, rolling elements, cage & seals 

and come in two general shapes – ball or 

roller. Rollers come in four basic styles - 

cylindrical, needle, tapered and spherical. 

A vast and diversified range of general 

purpose bearings are being manufactured 

indigenously. Bearings, generally used for 

special applications, requiring high 

technology and/or required in low volumes 

are still being imported. There is 

considerable scope for development of 

bearings of smaller sizes and lighter weight 

with improved performance in harsh 

operating conditions like high temperature 

or low temperature. 

Automobile industry accounts for 

bulk of the total demand of this industry 

with estimated share of 35 per cent, 

electrical industry share is 12 per cent, 

after market (replacement) share is 40 per 

cent and the remaining 13 per cent 

consumption is by other industries. As 

large numbers of automobile companies 

have already set up units and some are 

planning to set up units in the country, 

the demand for bearings is going to 

increase in coming years. 

The approximate export and import 

figures of the ball & roller bearings for the 

year 2005-06 are Rs.809.3 crore and 

Rs.1533.1 crore, respectively. The 

production of ball & roller bearings during 

the year 2005-06 was 327.6 million pieces. 

The bearing industry is delicensed and is 

eligible for 100 per cent FDI under 

automatic route. 

Medical and Surgical Instruments 

Medical and surgical equipment 

industry has been playing a critical role in 

the health care delivery system. Although 

medical equipments are being produced in 

this country for the last 30-35 years, its 

63


production till recently remained small. 

During the last 15 years or so with the 

liberalisation taking place, and increased 

awareness for health, the demand for 

medical/surgical instruments has gone up 

substantially. This has accelerated the 

growth in indigenous production as well 

as imports. The present day healthcare has 

become completely dependent on electro 

medical instruments and these have 

become indispensable tools for medical 

professionals mainly for diagnosis, therapy, 

and patient monitoring and health care. 

Indigenous manufacturers are currently in 

a position to manufacture wide variety of 

electro medical equipment such as 

electrocardiograph (ECG ) machine, X-ray 

scanner, CT scanners, short wave 

physiotherapy unit, electro surgical units, 

blood chemistry analyser, etc. However, 

sophisticated instruments such as Nuclear 

Magnetic Resonance (NMR) scanners, multi 

channel monitors, etc. are not currently 

manufactured in the country. Most of the 

units manufacturing medical equipments 

are in the SSI sector. The production for 

the year 2005-06 in the non-SSI sector is 

reported to be 262.8 crores. 

Ferrous Castings 

Indian Ferrous castings industry is 

one of the largest in the world. A peculiarity 

of the foundry industry in India is its 

geographical clustering. Typically, each 

foundry cluster is known for catering to 

some specific end use markets. For 

example, the Coimbatore cluster is famous 

for pump sets castings, the Kolhapur & 

Belagaun cluster for automotive castings, 

Rajkot cluster for diesel engine castings 

and Batala and Jalandhar cluster for 

machinery parts and agricultural 

implements. 

This industry has large potential for 

export since developed countries are 

withdrawing from the manufacturing of 

such casting as these are polluting 

industries. This is a polluting industry 

hence sufficient value addition is needed 

in the manufacture of these items. The 

Indian industry, because of its 

technological strength has advantage over 

other developing countries in exports. This 

is evident from current trend for increase 

in outsourcing by international 

manufacturers of engineering products 

from India. Considering the wide range of 

engineering applications of these castings 

and high potential for exports, there is 

considerable scope for establishing 

additional capacity particularly for high end 

applications. 


figures of the casting industry for the year 

2005-06 are Rs. 1643.3 crore and 

Rs.35.95 crore respectively. The 

production of steel castings and C.I. 

castings for the year 2005-06 in the 

organised sector was 6.42 lakh tonnes. 

The industry is de-licenced and is eligible 

for automatic approval up to 100 per cent 

Foreign Direct Investment. 

Process Control Instrument Industry 

Process control instruments and 

systems cover a wide range of instruments 

and systems required for monitoring and 

measuring of physical, chemical and 

64


biological properties. These instruments are 

required for measurement and control of 

process parameters like pressure, 

temperature, humidity, level, flow, etc. in 

the process industry. In all process 

industries the products of this sector have 

become inevitable for precise measurement 

and control of whole processes physical 

parameters, raw material, etc. This industry 

covers wide range of instruments and 

systems required for monitoring and 

measuring physical, chemical & biological 

properties. Their importance is significant 

in high cost, large & sophisticated process 

industries like fertilizer, steel, power plant, 

refineries, petrochemicals, cement & other 

process industries. 

Transfer of technology has been the 

major foundation of indigenous 

development. The technology tie-ups with 

internationally reputed manufacturers 

have brought in technological break - 

through in various areas of industry. Today 

it provides open control systems and smart 

control devices. However, the total 

integrated management and control 

approach which is currently used in 

developed countries is yet to be attempted 

in the country. Present technology of 

process control system is microprocessor 

based centralised control system. Future 

Technology is for decrease in the sensing 

and response time of the equipment and 

more & more automation control, i.e. 

without manual interference. The demand 

for this sector is basically a derived demand 

and depends largely on progress on 

implementation of various projects such as 

fertilizer, steel, power plant, refineries, 

petrochemicals, cement, etc. 

The export trend has not registered 

significant growth over the years. At 

present it is difficult to sustain export 

market in the field because of level of 

quality and sophistication required. Fast 

obsolescence, lack of standardisation and 

quality control also adds up for low exports. 

Low volume of manufacture leads to high 

cost of manufacture and hence less cost 

competitiveness for export. The production 

for the year 2005-06 in the non-SSI sector 

is reported to be Rs. 232.8 crore. There was 

export for Rs 108 crores against import of 

around Rs 836.9 crore during 2005-06.The 

Industry is delicenced and 100 per cent 

Foreign Direct Investment is allowed in this 

sector under automatic route 

Seamless Steel Pipes & Tubes 

Seamless steel pipes and tubes comes 

in all kinds of sizes including thin, small, 

precise, slender and other special pipes. 

Seamless steel pipes come in different forms 

such as hot rolled cold drawn, turned, rotorolled, 

etc. It has applications in aircraft, 

missile, nuclear power plants and anti 

friction bearing, etc. Ultra high strength 

and corrosion-resistant properties make 

these perfect for oil & gas industry, steam 

boilers, chemical and other processing 

industries, pipelines, installation with high 

and supercritical steam conditions, etc. 

Oil sector accounts for around 60 

per cent of total requirement of seamless 

pipes. Bearings and boiler sector 

contribute around 30 per cent of 

demand. The Industry is able to 

manufacture tubes up to 14” outer 

diameter. With upcoming substantial 

65


growth in the power sector and increase 

in demand of bearings from automobile 

sectors, the demand pattern may change 

in favour of these two sectors. 


figures of the Seamless Steel pipes & tubes 

industry for the year 2005-06 are Rs. 760.37 

crore and Rs. 1985.93 crore, respectively. 

The Seamless steel pipes and tubes industry 

is delicensed and upto 100 per cent foreign 

equity is allowed for the manufacture of this 

item under automatic route. 

Electrical Resistance Welded (ERW) 

Steel Pipes & Tubes 

Based on the end-user customers’ 

requirement, ERW steel pipes and tubes 

are available in various qualities, wall 

thickness and diameters of the finished 

pipes. While manufacturing ERW steel 

pipes, only high quality continuous-cast, 

fully-kilned, control-rolled, fine-grain, 

low-carbon steel is used. High 

performance ERW steel pipes and tubes 

possess high corrosion resistance, high 

deformability, high strength and high 

toughness. These pipes are used in 

fencing, lining pipes, oil country tubulars, 

scaffolding, water and gas conveyance, 

structural, engineering purposes, etc. 

There has been tremendous increase in 

the production of ERW steel pipes due to 

higher demand in oil and gas industry, 

infrastructure and automobile uses. 

There are large numbers of units in the 

SSI Sector. The industry is de-licenced 

and is eligible for automatic approval up 

to 100 per cent Foreign Direct 

Investment. 

Submerged-Arc Welded (SAW) pipes 

There are two types of SAW pipes 

namely longitudinal and helical welded 

SAW pipes. Longitudinal SAW pipes are 

preferred where thickness of pipe is more 

than 25 mm and in high pressure gas pipe 

line. Helical welded SAW pipes are used 

for low pressure applications. The cost 

of helical SAW pipes is less than 

longitudinal pipes. Total installed 

capacity of SAW pipes in the country is 

around 6.5 lakh tones. There is huge 

demand of SAW pipes in the country due 

to transportation of oil and gas and 

transmission of water. 


figures of the SAW pipes Industry for the 

year 2005-06 are Rs. 2223.47 crore and 

Rs. 212.77 crore, respectively. This 

industry has very good export potential. 

The industry is delicensed and upto 100 

per cent foreign equity is allowed for the 

manufacture of this item under automatic 

route. 

Industrial Fasteners 

The fastener industry in India may be 

classified into two segments: high tensile 

and mild steel fasteners. High tensile and 

mild steel fasteners broadly include nuts, 

bolts, studs, rivets and screws. All types of 

fasteners except high tensile and special 

type of fasteners are reserved for SSI Sector. 

Mild steel fasteners are primarily 

manufactured by the unorganised sector 

while high tensile fasteners require 

superior technology and are dominated by 

companies in the organized sector. 

66


Fasteners are used in almost all 

engineering and chemical industries. 

Automobile industry accounts for bulk of 

the total demand. Consumer durables and 

railways are the other primary users of the 

high tensile fasteners. Automobile sector 

is likely to drive growth in the fastener 

industry. 


figures of the industrial fastener industry 

for the year 2005-06 are Rs. 844.34 crore 

and Rs. 650.48 crore, respectively. The 

production of nuts & bolts in the organized 

sector for the year 2005-06 was 77,888 

tonnes. There is scope for more export in 

this sector. The fastener industry is 

delicensed and is eligible for 100 per cent 

FDI under automatic route. 

Steel Forgings 

Forging is the product of work on 

plastic state of metal to a desired shape by 

application of pressure. The working of 

metal into the shape by means of modern 

forging methods refines the grain structure, 

develops its inherent strength, improves 

the mechanical properties and produces 

the structural uniformity free from hidden 

internal defects. Forgings are produced 

through various methods which include 

open die forging, closed die forging and near 

net shape/precision forging. 

The Indian forging industry has 

emerged as a major contributor to the 

manufacturing sector of the Indian 

economy. The key driver of demand of 

forging is the automobile industry. About 

65 per cent of the total forging production 

is used in this sector. Thus, the fortunes 

of the forging industry are dependent upon 

the growth of automobile industry. The 

other Industries that use forgings include 

Railways, Defence, Oil Exploration, 

Cement, Steel Industry and other 

Engineering Industries. India’s forging 

industry not only meets almost the entire 

domestic demand of forgings but is also a 

large exporter and is making a significant 

contribution to India’s exports. The Indian 

forging industry has shown a 

commendable performance on export 

front. Technological developments have 

also contributed to the industry’s steady 

growth in export. The major markets are 

USA, Europe, China, etc. The indigenous 

industry constitutes of about 10 large 

units followed by large number of medium, 

small & tiny units. 

The approximate import and export 

figures of the forging industry for the year 

2005-06 was Rs.1,182.03 crore and 

Rs. 957.00 crore respectively. The 

production of stamping & forging for the 

years 2005-06 in the organized sector was 

3,31,519 tonnes. The future is bright in 

terms of the expected surge in global 

demand. As a result of the liberalisation, 

more MNCs have entered the domestic 

automobile market. This has opened up 

more business opportunities for the forging 

industry. The forging industry is delicensed 

and is eligible for 100 per cent FDI under 


Bicycle Industry 

The bicycle industry of India is one of 

the most established industries. India is 

67


the second largest bicycle producer of the 

world, next only to China. India has seen 

a tremendous increase in the number of 

bicycle manufacturers and bicycle 

exporters in the recent past. Today, Indian 

bicycle manufacturing and bicycle spares 

industry is well accepted and is also widely 

recognised for its quality standards in the 

international market. Most of the bicycle 

components, spares and bicycle 

accessories in India are reserved for 

manufacture in the Small Scale Sector. The 

industry is making endeavor for enhancing 

export since there is a significant scope for 

export of Indian bicycles, bicycle spare 

parts and bicycle accessories. 


figures of bicycle for the year 2005-06 are 

Rs.111.68 crore and Rs. 20.06 crore, 

respectively. The total production of all kinds 

of bicycles in the organized sector was 82.68 

lakh numbers during the year 2005-06. The 

industry is de-licensed under the current 

industrial policy and this sector qualifies for 

100 per cent FDI under automatic approval. 

Light Industrial Machinery Sector 

Food Processing Machinery 

The Indian market for food processing 

machinery has been growing steadily fueled 

by strong domestic demand for processed 

food & beverage products and growth of 

exports. The most promising areas of growth 

are fruit & vegetable processing, meat, 

poultry, dairy & seafood, packaged/ 

convenience food, soft drinks and grain 

processing. There is a need for adopting 

superior technology, food processing and 

packaging machinery to ensure quality. 

Food Processing Sector is expected to grow 

at a healthy pace considering the rapid 

changes in food habits and consumerist 

culture developing in the country. The 

machinery manufacturers have honed their 

expertise in manufacturing dairy machinery 

and other core equipment of food processing 

machinery. 

The food processing machinery can 

be classified under the general category of 

industrial machinery which is de-licensed 

under the current industrial policy and this 

sector qualifies for 100 per cent FDI under 

automatic approval. 

Packaging Machinery Industry 

Packaging of consumer products or 

industrial products is emerging as the USP 

in the marketing strategies. Developments 

in packaging technology have not only 

contributed to improving aesthetic appeal 

of the products but also the shelf life. In 

some cases specialised packaging becomes 

a technical necessity. The packaging 

machinery industry sector is, therefore, 

considered as an important segment of the 

industrial scenario especially in consumer 

products and in IT industry. In a 

competitive environment where Indian 

products have to compete in the 

international markets, packaging apart 

from other aspects, can tilt the balance. 

Considering the growth prospects in 

industrial sector and growing consumer 

awareness of packaging, it is expected that 

there would be substantial growth in this 

area. There is a wide range of packaging 

machinery available in the country covering 

68


packaging of vast range of items. Some of 

the commonly available packing machinery 

includes machines for strip packaging, 

form fill & seal machines, carton filling, 

fully automatic bag making machinery and 

automatic micro processor controlled 

packaging machines. 

The packaging machinery industry, 

like other industrial machinery, is delicensed 

under the current Industrial Policy 

and is eligible for 100 per cent FDI under 

automatic approval. 

Water Pollution Control Equipment 

With growing awareness of water 

pollution and stringent environmental 

control standards being enforced for 

various uses including process industries, 

the water/waste water treatment industry 

is poised for huge growth. 

The common industrial equipments 

are clarifier, separator devices activated 

sludge filters, biological reactors etc. The 

complete plants are manufactured mostly 

in the organized sector and many of the 

equipments are manufactured in the Small 

Scale Sector as well. Reputed foreign 

companies from US, Germany, France, 

Sweden and UK have either set-up their own 

facilities in India or have collaboration with 

Indian Companies. The industry is capable 

of meeting major domestic requirements. 

However, there is need for continuous upgradation 

in technology especially with 

regard to power consumption and efficiency. 

The industry is included in the 

Industrial Machinery Sector and is a 

delicensed one and is also eligible for 100 

per cent FDI under automatic approval. 

Air Pollution Control Equipment 

Rise in income alongwith increased 

air pollution has given rise to increase in 

the demand for equipments like Cyclones 

and multi-cyclones, Gravity separators, 

Fabric filters, Wet collectors and scrubbers, 

Electrostatic precipitators, etc. 

There are foreign companies in joint 

collaboration who are supplying these 

equipments with domestic suppliers. Air 

pollution control equipment is de-licenced 

and is eligible for automatic approval upto 

100 per cent Foreign Direct Investment. 

Industrial Gears 

Industrial gears comprise mainly of 

gears and gear boxes. The gears are used 

for transmission of power and motion. 

Gears being an important part of a 

machine have immense usage within 

various industries. The manufacture of 

gears and gear boxes involve high 

precision machining and accurate 

assembly as mechanical power is to be 

transmitted noiselessly and with 

minimum losses. Different types and 

sizes of gears such as spur gears, helical 

gears, worm gears, spiral gears and many 

other kinds are manufactured in the 

country. The demand for gears and gear 

boxes predominantly depend on the 

growth of industrial machinery, machine 

tools, and consumer & automobile sector. 

Considering the industrial growth 

prospects, particularly in automobile 

69


sector, the demand for gears and gear 

boxes is expected to grow at a healthy 

pace. The industry is delicensed and is 

eligible for 100 per cent FDI under 


Metal Container Industry 

The principal types of metal (tin) 

containers are food containers generally 

known as OTS (Open Top Sanitary) cans 

and general line containers for packaging 

non-food commodities such as paints, 

lubricants, pesticides, etc., ranging in 

size and shape from the tiny cylindrical 

and rectangular to those called ‘F’ type, 

5 litre rectangular, 4 kg. square as well 

as ‘A-10’ round containers for packaging 

fruit pulps for institutional consumption 

etc. Unprinted tin containers (other than 

OTS) and cans up to 18 litre capacity are 

reserved for manufacture in the small 

scale sector. 


There are 40 units manufacturing 

general line containers and OTS cans with 

an installed capacity of about 1,27,000 

tonnes and 37,000 tonnes respectively. This 

industry is delicensed. Besides, there are a 

large number of units in the small scale 

sector mainly manufacturing 18 litre 

capacity oil containers. The production 

during 2005-2006 was 74,333 tonnes and 

production during 2006-07 (upto December) 

is 46,851 tonnes. 

The metal (tin) container industry has 

made significant technological 

advancement during the last few years. 

Foreign technical collaborations in some 

cases have enabled the industry to adopt 

newer technology, especially for 

manufacture of OTS cans. 

The export & import of tin container during 

2005-06 was Rs. 50.68 crores and 

Rs. 80.43 crore, respectively 

Newsprint Industry 

The Newsprint industry was delicensed 

under the Industries (Development & 

Regulation) Act, 1951 since July, 1997. The 

paper mills producing newsprint conforming 

to BIS standards and supplying to newspaper 

publishers are considered for inclusion in 

Schedule of Newsprint Control Order, 2004 

enabling them to avail exemption of excise 

duty. There are at present 77 mills including 

two Central Public Sector units and two State 

Public Sector units which are manufacturing 

newsprint paper with a total installed 

capacity of 15.9 lakh tonnes. The domestic 

production of newsprint is 9.1 lakh tonns 

for the year 2005-06 and 6.1 lakh tonnes in 

the year (April-October) 2005-06. 

The production, import and export of 

newsprint during the last four years are as 

given in Table 7.6. 

The demand for the newsprint in the 

country is met partly from indigenous and 

partly from imports. 

Paints & Allied Products Industry 

The Paints & Allied Products Industry 

mainly consists of paints, enamels, 

varnishes, pigments, printing inks, 

synthetic resins, etc. These play a vital role 

70


Table 7.6 

(Unit in Lakh Tonnes) 

Year Production Import Export 

2003-04 6.8 7.5 0.03 

2004-05 7.6 6.7 0.05 

2005-06 9.1 6.8 0.10 

2006-07 6.1 1.5 0.004 

April-Oct April-June April-June 

(Figures based on CMIE data, current as available upto December, 2006) 

in the economy by way of protecting national 

assets from corrosion (estimated corrosion 

losses are over Rs.8,000 crore per annum). 

Production 

The Paints & Allied Industry has been 

exempted from compulsory licencing, and 

comprises two sectors, viz, organised sector 

and small scale sector. Approximately 60 

per cent of the production is contributed 

by the organised sector. The production 

during 2005-2006 was 4,48,459 tonnes. 

During the current year 2006-07 (up to 

December), the production was 3,78,728 

tonnes. India is self sufficient in the 

production of paints. 

The export & import of Paints & allied 

products during 2005-06 was Rs.3737.39 

crore and Rs. 2,086.91 crore, respectively. 

Photo Goods Industry 

Photo Goods Manufacturing Industry 

is a de-licensed industry. Photo Goods 

comprise of black and white, colour products, 

medical imaging films and special photo 

sensitive goods. The industry caters to mass 

consumption in health sector, in the amateur 

and professional cinema, camera films and 

graphic art films for education and defense 

requirements. Photo Goods are also required 

for aerial survey purposes. 

The production of Photo Films/Roll 

Films during 2005-06 was Rs.14.22 crore 

and production during 2006-07 (upto 

December) was Rs. 10.08 crore. The Photo 

Goods Industry in India has a market size 

of around Rs. 1700 crore per annum with 

a growth rate of approximately 25 per cent 

per annum. 

The production of Photographic/ 

Cinematographic goods during 2005-06 

has been Rs.2,000 crore (approx.). The 

import of Photographic or Cinematographic 

goods during 2005-06 was Rs.1,062.26 

crore and import during 2006-07 (April- 

Jun) was Rs.308.95 crore. The Export of 

Photographic or Cinematographic Goods 

during 2005-06 was Rs. 123.98 crore and 

export during 2006-07 (April-Jun) was 

Rs.30.93 crore. 

Paper & Paper Board 

The paper industry plays an 

important social role and consumption of 

paper is considered as an indicator of 

economic growth of the country. An 

71


improvement in the standard of living of 

Indians, especially in urban areas has 

resulted in a gradual shift towards better 

quality papers. This is expected to increase 

the demand for high-end varieties of paper. 

Further, with rising exports and keeping 

in view the current trend of outsourcing, 

foreign publishers have started outsourcing 

printing and publishing jobs to India. This 

would significantly increase the demand for 

different varieties of paper. 

The paper industry, which includes 

pulp, paper and paper-board and 

newsprint is delicensed. Foreign Direct 

Investment (FDI) upto 100 per cent is 

allowed on automatic route on all activities 

except those requiring industrial licence 

from locational angle. 

There are about 666 industrial units 

engaged in manufacture of pulp, paper and 

paper-board, out of which, nearly 568 are in 

operation. The Indian paper industry 

consists of small, medium and large paper 

mills having capacity ranging from 5 to 800 

metric tonnes (MT) per day (tpd). The total 

installed capacity of the paper mills is 85 lakh 

MT out of which 11 MT is idle due to closure 

of nearly 98 paper manufacturing units. 

The country is almost self-sufficient in 

manufacture of most varieties of paper and 

paper-board. The country imports only 

certain speciality paper such as coated and 

cheque paper, etc. which are imported from 

Singapore, USA, UK, Japan, Germany and 

Malaysia. Writing / Printing grade paper, 

art paper, coated paper, etc. are exported to 

Table 7.7 

Paper Production & Consumption, Lakh Tons 

(Unit in Lakh Tons) 

Year Production Imports Exports 

2003-04 55.57 2.34 2.24 

2004-05 57.93 1.95 2.70 

2005-06 58.70 1.16 1.40 

2006-07 35.96 0.87 0.57 

(April-October) (April-June) (April-June) 

(Figures based on CMIE data, current as available up to December, 2006) 

Figure 7.1 

72


38 % 

Figure 7.2 

30 % 

Wood based 

Agro based 

Recycled paper based 

crore have been collected upto 2005-06 

and about Rs.25 crore have been allocated 

by the Government for conducting 

Research & Development in pulp and paper 

from 1996-97 to 2006-07. 

32 % 

neighbouring countries like Sri Lanka, 

Bangladesh, Nepal and Middle-East 

countries. 

The production of paper and paperboard 

import and export during the last 4 

years is given in Table 7.7. 

The Paper Industry uses wood, agriresidue 

and waste-paper as raw material. 

All the three segments are contributing 

equally to the production of paper and 

paper-board. The use of non-wood raw 

material and waste paper has increased 

over the years and at present, about 70 

per cent of the total production is based 

on non-wood based raw material. Fibrewise 

share of production is as follows. 

The Indian Paper industry has a turnover 

of more than Rs. 17,000 crore. It 

contributes to the Exchequer Rs.2,500 

crore annually by way of excise duty, 

customs duty, CVD, etc. It employs nearly 

three lakh persons directly and another ten 

lakh persons indirectly. 

In terms of Sec.9 of Industries 

(Development & Regulation) Act, 1951, the 

cess on paper is being levied and collected 

at the rate of 0.125 per cent ad-valorem 

since 1980-81. So far a sum of Rs.209.6 

The performance of the industry has 

been constrained due to high cost of 

production caused by high cost of raw 

materials, high cost of energy and 

environmental issues. In order to enable 

the industry to sustain the production, 

the Government has taken several policy 

measures such as rationalization of duty 

structure, funding of R&D activities, delicensing 

of the paper industry, 

permitting 100 per cent FDI through 

automatic route, etc. 

Rubber Goods Industry 

Rubber Goods manufacturing 

industry is a delicensed industry. The 

small scale sector accounts for over 50 per 

cent of production of rubber goods in the 

non tyre sector. The tyre industry has 43 

manufacturing companies with 58 tyre 

manufacturing plants with an annual 

turnover of over Rs. 14500 crore. 

This industry covers a wide range of 

items like tyres, tubes, conveyor belts, 

rubber hoses, rubber cots and aprons, 

contraceptives, examination and surgical 

gloves, rubber moulded goods, automotive 

components, etc. 

The main raw materials used by the 

rubber goods manufacturing industry are 

Natural Rubber, Synthetic, Styrene 

Butadiene and Poly Butadiene Rubber, 

Carbon Black, Rayon/Nylon Tyre Cord/ 

73


Fabric, Rubber Chemicals such as 

Accelerators, Anti-oxidants, Zinc Oxide, 

etc. Going by share of rubber 

consumption, automotive tyre sector is the 

single largest sector accounting for about 

50.2 per cent consumption of natural 

rubber, followed by bicycles tyres and 

footwear which consumes 11.7 per cent 

& 9.8 per cent respectively. 

Tyres 

From the manufacture of cotton 

reinforced carcass tyres in 1940’s to high 

performance radial tyres in the new 

millennium, Indian Tyre Industry has 

come a long way. Against an installed 

capacity of 850 lakh numbers, the tyre 

industry produced 601 lakh tyres in 

2004-05. The production during 2005-06 

was 660 lakh tyres and during 2006-07 

(up to Dec.) it was 548 lakhs. The annual 

turnover of the industry is around Rs. 

14,500 crore. Bus and truck tyres 

accounts for 65 per cent of total 

production. 

Indian Tyre Industry has done 

remarkably well on the export front. 

Tyres have been identified by 

Government of India as an item of 

“Extreme Focus” for exports under 

medium Term Export Strategy (2002-07). 

In consultation with the tyre industry, the 

Government of India has taken a number 

of measures to boost tyre export. From 

an insignificant export of Rs. 10.75 crore 

in 1985-86, export of tyres has risen to 

Rs. 2,364 crore during 2005-06. The 

import of tyres during 2005-06 was 

Rs. 285.65 crore. 

Salt Industry 

Salt is one of the essential items of 

human consumption. The per-capita 

consumption of salt in the country is 

estimated at about 14 kg per annum which 

includes edible as well as industrial salt. 

India is the third largest salt producing 

country in the world with an average 

annual production of about 165 lakh 

tonnes. The current annual requirement 

of salt in the country is estimated to be 

60 lakh tonnes for edible use (including 

requirement of cattle) and 85 lakh tonnes 

for industrial use. Caustic soda, soda ash, 

chlorine, etc. are the major salt-based 

industries. Besides, about 24 lakhs tonnes 

of salt is exported every year. 

Salt works having an area up to 10 

acres set up by individuals or group of 

individuals are exempted from payment of 

cess levied under the provisions of the Salt 

Cess Act, 1953 and Rules made thereunder. 

Similarly, salt exported to foreign countries 

is also exempted from payment of cess. 

Private sector plays a dominant role 

contributing over 65 per cent of the salt 

production in the country, while the public 

sector contributes about 2 per cent. The cooperative 

sector contributes about 9 per cent 

whereas the small-scale sector (less than 10 

acres) accounts for nearly 24 per cent of the 

total salt production in the country. 

Salt manufacturing season 

commences with the closure of monsoon 

i.e. by 15 October and lasts up to June of 

the following year till onset of the monsoon 

season. 

74


There are about 13,000 salt works, 

mostly in small sector, engaged in the 

production of salt. The total area under 

salt production is about 5 lakh acres. The 

salt manufacturing activities provide direct 

employment to about 1.5 lakh persons. 

The target of salt production and 

actual production achieved during the last 

five years is given in Table 7.8. 

Table 7.8 

(Figures in Lakh MT) 

Year Target Production 

2002 140 178.79 

2003 150 148.82 

2004 155 147.61 

2005 180 199.24 

2006 185 172.98 

(Upto Dec.06) 

For iodisation of salt and to meet the 

needs of industrial sector, emphasis is being 

laid on manufacture of high purity salt. Upgradation 

of raw salt quality to meet this 

requirement is achieved by encouraging 

establishment of salt washeries and 

refineries. Salt Organization has facilitated 

establishment of 41 salt washeries / 

refineries till date and all the units registered 

with the Salt Commissionerate have 

commenced commercial production. 

Railways play an important role in 

transporting salt from three major salt 

producing states viz. Gujarat, Tamil Nadu 

and Rajasthan to meet the requirement 

of the country. On an average about 55 

per cent of edible salt is transported by 

rail from production centers. The 

remaining quantity moves by road and 

waterway. 

Iodised Salt 

With a view to ensure universal 

access to iodised salt for the prevention 

and control of Iodine Deficiency Disorders 

(IDD) in the country, Salt Commissioner’s 

office has been identified as the Nodal 

Agency for creation of adequate salt 

iodisation capacity, monitoring production 

and quality of Iodised Salt at production 

centers and monitoring distribution of 

Iodised Salt in the entire country, under 

National Iodine Deficiency Disorders 

Control Programme (NIDDCP) being 

implemented by the Ministry of Health & 

Family Welfare, Government of India. Salt 

Organisation has granted permission to 

more than 825 salt iodisation units with 

an annual installed capacity of 118 lakhs 

tonnes so far. The production and 

supplies of iodised salt during the last five 

years is given in Table 7.9. 

Table 7.9 

( Figures in Lakh MT) 

Year Production Supplies 

2002-2003 36.89 35.11 

2003-2004 42.52 40.43 

2004-2005 46.10 44.29 

2005-2006 49.84 48.27 

2006-2007 31.61 36.27 

(Upto Dec., 06) 

Exports 

Export of common salt and iodised 

salt is permitted under Open General 

License (O.G.L). Salt is exported mainly to 

Japan, Philippines, China, U.S.A, 

Indonesia, Malaysia, Nepal, Bhutan etc. 

Export of salt during the last five years is 

given in Table 7.10. 

75


Labour Welfare Activities and 

Development Works 

Salt Commissionerate is paying 

special attention to the welfare of labourers 

engaged in salt industry by extending 

financial assistance for executing various 

scheme, viz. 

l 

l 

l 

l 

l 

l 

Table 7.10 

(Figures in Lakh MT) 

Year 

Quantity 

2002-2003 12.02 

2003-2004 11.34 

2004-2005 32.08 

2005-2006 29.77 

2006-2007 13.50 

(upto Dec.06) 

Medical facilities to salt workers and 

their families. 

Drinking water facilities in salt works. 

Educational facilities to the children 

of salt labourers. 

Rest sheds and crèches in salt works. 

Recreational facilities to labourers 

and their wards. 

About Rs.1.4 crore per annum is 

spent on labour welfare and 

development activities. 

A Plan Scheme called “Namak Mazdoor 

Awas Yojana” was sanctioned by Government 

of India as a Central Sector Scheme during 

2003-04 for construction of houses for salt 

workers, in which 90 per cent cost of the 

houses is to be borne by the Central Govt. 

and 10 per cent by the salt manufacturers/ 

State Govt./NGOs/Labourers themselves. 

The Government of India sanctioned the 

scheme for the 10th Five-Year Plan with an 

outlay of Rs. 25.00 crore, out of which a sum 

of Rs.16.50 crore has been released. 

There has been sufficient progress in 

construction of dwelling units under the 

Scheme and upto October, 2006, 1,607 

dwelling units have been constructed. 

Further, about 3,144 dwelling units are at 

various stages of construction, which is likely 

to be completed by the end of March, 2007. 

With a view to improving the quality 

of salt to meet the edible and industrial 

requirements domestically and to augment 

the exports Model Salt Farms are being 

established in the States of Rajasthan, 

Tamil Nadu, Orissa and Andhra Pradesh. 

These Model Salt Farms will act as a 

nucleus for transfer of technology. The Salt 

Manufacturers and workers would be 

trained in the art and science of 

manufacturing of good quality salt. For 

improving quality of salt, one Model Salt 

Farm has already been established in 

Rajasthan at an estimated cost of Rs. 33.5 

lakh with equal contribution from Salt 

Organisation, Governmnet of Rajasthan 

and Central Salt and Marine Chemical 

Research Institute, Bhavnagar. It has been 

inaugurated in January, 2007. Other Model 

Salt Farms are at various stages of 

implementation. 

A study on the Socio Economic Status 

of salt worker in the country was entrusted 

to an Inter-Government organization “Bay 

of Bengal Programme” at a cost of Rs.14.85 

lakh with 100 per cent assistance from cess 

proceeds. Action is being taken on the 

76


recommendation of the report for 

ameliorating the working and living 

standard of salt workers. 

Soaps & Detergents Industry 

Detergents and toilet soaps are 

delicensed. Soaps and Detergents Industry 

include laundry soaps, synthetic detergents, 

and toilet soaps including bathing bars. 

These are consumer items and technology, 

quality, marketing and distribution 

determine the success of units in this sector. 

The industry has developed both in the 

small-scale and organized sector. Laundry 

Soap is reserved for manufacture in Small 

Scale and 90 per cent of the production of 

laundry soap is in the small-scale sector. 

Toilet soap is, however, dominated by the 

multinational units. 

Capacity and Production: There are at 

present 54 units engaged in the 

manufacture of Soaps & Detergents. The 

production of soap during 2005-2006 was 

4,86,533 tonnes and Detergents was 

9,28,222 tonnes. During the current year 

(up to December), the production of soap 

has been 3,68,584 tonnes and that of 

detergents 7,13,682 tonnes, respectively. 

The export & import of soaps during 

2005-06 was 15,344 tonnes and 35,579 

tonnes. The export & import of Detergents 

during 2005-06 was 32,342.02 tonnes and 

20,547 tonnes, respectively. 

Watch Industry 

The Watch Industry in India 

comprises units both in the organised and 

the small scale sector. Most of the watches 

are being manufactured under the 

electronic system. 

Capacity and Production: 

At present 16 units are manufacturing 

wrist watches and alarm time pieces. The 

production of wrist watches during 2005- 

2006 was 17,964 thousand numbers. 

During the current year 2006-2007(up to 

December), the production is 10,429 

thousand numbers. Apart from above, the 

production of Alarm time pieces during 

2005-06 was 447.9 thousand numbers. 

During the current year (up to December), 

the production was 321 thousand 

numbers. 

The prospects for the wrist watch 

industry in the country are encouraging. 

The demand for watches has been growing 

over the years. Considerable emphasis 

has been laid on upgradation of technology 

in this field. A number of essential raw 

materials and components required for the 

wrist watch industry are being allowed to 

be imported under concessional rate of 

duty. 

The export & import of Clocks and 

Watches during 2005-06 was Rs. 198.60 

crore and Rs. 317.37 crore respectively. 

Wood Based Industry 

Plywood, Veneers of all types and 

other wood based products such as 

particle board, medium density fibre 

board have been delicensed vide 


77


Promotion’s Press Note No.11 (1997 

Series) dated the 17th July 1997. 

Plywood forms the major segment of the 

wood-based industry in the country. 

In terms of Press Note No. 9 (1998 

Series) dated 27.8.98, issued by the 

Ministry of Industry, Department of 

Industrial Policy & Promotion, 

entrepreneurs who wish to obtain 

approval from the Government for setting 

up any wood based project should obtain 

prior clearance from the Ministry of 

Environment & Forests before submitting 

the applications to the Administrative 

Ministry/SIA and enclose a copy of “in 

principle” approval given by the Ministry 

of Environment & Forests. However as per 

notification dated 27.01.2007 most of the 

wood items have been dereserved except 

wood furniture and fixtures. 

As per the current Export & Import 

Policy, the principal raw material, viz., 

wood logs is freely importable under OGL. 

Capacity and Production: 

The total production of Plywood during 

2005-2006 was 58,17,131 Sq. Metres and 

production during 2006-07 (up to 

December) was 36,76,264 Sq.metres. The 

production of Particle Board during 2005- 

06 was 33,93,029 Sq.Mtrs. and production 

during 2006-07(up to December) was 

27,98,517 Sq. metres. 

The export and import of plywood 

during 2005-06 was Rs.160.80 crore and 

Rs.87.75 crore respectively. The export & 

import of Particle Board during 2005-06 

was Rs. 21.81 crores and Rs.117.87 crore, 

respectively. 

78


8 

ATTACHED AND SUBORDINATE OFFICES 

AND OTHER ORGANISATIONS 

Attached Offices 

Office of the Economic Adviser 

The Office of the Economic Adviser, 

an attached Office in the Department of 

Industrial Policy & Promotion, Ministry of 

Commerce & Industry, was set up in 1937. 

This Office renders advice and assistance 

in the formulation of various policies having 

impact on the country’s industrial 

development and investment climate. It also 

renders advice on trade, fiscal, competition 

and labour-related issues having bearing 

on industrial performance. The Office 

compiles and disseminates Wholesale Price 

Index (WPI) besides various economic and 

statistical data. 

I. Functions 

l 

l 

Industrial Policy & Promotion (DIPP) 

and other Departments, like 

Department of Commerce, 

Department of Revenue, 

Department of Economic Affairs, 

Prime Minister’s Office, Planning 

Commission, Cabinet Secretariat, 

Ministry of Small Scale Industry, 

Ministry of Labour, Ministry of Home 

Affairs, Committee of Secretaries, 

etc. 

Appraisal of economic aspects and 

giving advice relating to formulation 

of Industrial Policy, Trade (PTA/FTA/ 

RTA) and tax issues in so far as it 

relates to industry. 

Analysis and review of trends of 

industrial production and growth. 

The main functions of the Office of 

the Economic Adviser include the 

following. 

(a) Policy-oriented functions 

l 

Providing various economic policy 

inputs to the Department of 

l Examination of WTO issues 

pertaining to market access for nonagricultural 

commodities (industrial 

tariffs). 

l 

Labour issues which, inter-alia, 

include labour laws and labour 

market issues. 

79


l 

(b) 

Offer comments on various Acts 

relating to tax, industrial relations, 

companies, labour laws, essential 

commodities act, draft Cabinet Notes, 

etc. 

Compilation and Release of 

Economic Statistics 

The Office of Economic Adviser 

compiles and brings out the following 

publications: 

l 

l 

l 

l 

l 

(c) 

l 

‘Compilation and Publication of 

Wholesale Price Index (WPI) Numbers 

for India’, every week. Reviewing the 

trends in wholesale prices and release 

of weekly, monthly and annual 

indices of wholesale prices (press 

release is available at website, http:/ 

/eaindustry.nic.in). 

Compilation and publication of 

‘Handbook of Industrial Policy and 

Statistics’. 

Monthly report on production of six 

infrastructure industries viz. crude 

oil, petroleum refinery products, coal, 

electricity, cement and finished steel 

(also available at http:// 

eaindustry.nic.in). 

The Monthly Economic Scenario. 

Select Key Indicators of Industrial 

Performance. 

Coordination functions 

The Office coordinates, for the 


Promotion, work relating to 

preparation of Monthly Summary for 

the Cabinet, material for Pre-Budget 

Economic Survey, etc. 

l Co-ordinates research work 

concerning Industrial Sector. 

l 

II. 

The Office co-ordinates proposals for 

changes in fiscal policy regime 

relating to industrial goods and 

renders advice on matters pertaining 

to changes in the tariff structure and 

in the fiscal incentives for industry. 

Major Activities 

Plan Schemes: 

The Schemes viz. (a) Research 

Studies, (b) Development of Business 

Service Price Index (BSPI), (c) Improvement 

of Wholesale Price Index (WPI), and (d) 

Information Technology are the Tenth Plan 

Schemes being implemented by the Office 

of the Economic Adviser. 

Research Studies 

Plan Scheme for conducting 

“Research Studies in Industrial 

Development” was initiated in 1989-90. 

Under this scheme, research projects are 

undertaken by research institutions on 

behalf of the Department. The objective 

behind such studies is to disseminate 

information on important issues to 

encourage discussion and also to fill gaps 

in research to facilitate policy formulation 

on various issues. Amount of 

expenditure under this Plan Scheme has 

80


been Rs. 12.84 lakh in 2002-03, Rs. 

15.95 lakh in 2003-04, Rs. 2.25 lakh in 

2004-05, Rs. 12.43 lakh in 2005-06, and 

Rs. 3.59 lakh till 12.2.2007 of 2006-07. 

So far, under the Research series, 31 

studies have been released. All these 

studies were well received and found to 

be useful in policy formulation as well as 

for implementation of Plan programmes 

for the industrial development of the 

country. A study on “Impact of Foreign 

Direct Investment in Select Sectors in 

India and Comparative Study of Policies 

and Procedures on them in Select 

Countries” is in progress. 

Scheme of Development of Business 

Service Price Index (BSPI) 

This Plan Scheme with the objective 

of developing Service Price Index for the 

country was approved in the Tenth Plan 

with an allocation of Rs. 3.00 crore. 

Subsequently, the allocation was 

bifurcated into two schemes viz. (i) 

Development of Business Service Price 

Index (BSPI) with an allocation of Rs.0.83 

crore, and (ii) Improvement of Wholesale 

Price Index (WPI) with an allocation of 

Rs. 2.17 crore. The Plan Scheme 

‘Improvement of WPI’ is funded in its 

entirety by the World Bank Assistance 

under its Technical Assistance (TA) 

programme. 

Development of Business Service 

Price Index (BSPI) plan scheme aims at 

developing a Price Index for selected service 

sectors for providing, inter alia, deflator to 

the service sector Gross Domestic Product 

(GDP). The recommendation to develop 

such an index was made in 1999 by the 

Working Group set up to revise the 

Wholesale Price Index Number. The need 

to develop Service Prices Index was also 

reiterated by the National Statistical 

Commission. 

The fund under the Plan Scheme BSPI 

covers mainly salary & day-to-day office 

expenses, and meeting expenditure 

towards regular price data collection. These 

are components not covered under the 

World Bank TA programme. An amount of 

Rs. 1.41 lakh was spent on the BSPI 

Scheme in 2002-03. Expenditure in 

subsequent years have been Rs. 1.66 lakh 

in 2003-04, Rs. 9.82 lakh in 2004-05, and 

Rs. 14.19 lakh in 2005-06. During 2006- 

07 (as on 12.2.2007) the amount spent 

stood at Rs. 8.59 lakh. 

Under the BSPI Plan Scheme, freight 

data for 86 routes required for construction 

of index for road transport has been 

collected for all the years starting with 

2003-04. 

Scheme of Improvement of Wholesale 

Price Index (WPI) 

The objectives of this scheme are: (i) 

development of Producer Price Index (PPI) 

and switching over from WPI to PPI (ii) 

developing an integrated framework for PPI 

based on stage of processing (SOP) and (iii) 

development of sector-specific service price 

indices. ‘Improvement of WPI’ is envisaged 

through focusing on training of personnel 

and developing expertise, conducting 

surveys, studies and seminars, upgrading 

software and hardware, etc. 

81


Some of the items under the Plan 

schemes of BSPI and Improvement of WPI 

are complementary and interlinked. For 

instance, the road freight data collection 

is funded under the BSPI Scheme while the 

baseline survey for the road sector was 

covered under the scheme ‘Improvement 

of WPI’. 

The 10th allocation for this scheme 

has been Rs. 217.00 lakh. The fund for this 

scheme is available under technical 

assistance from the World Bank. 

Expenditure incurred were Rs. 14.43 lakh 

in 2003-04, Rs. 14.63 lakh in 2004-05, 

Rs. 45.66 lakh in 2005-06 and Rs. 12.22 

lakh in 2006-07 (as on 12.2.2007). 

During 2006-07, two officers got 

specialised training at the Bureau of 

Labour Statistics, Washington on software 

development for Producer Price Index 

compilation. The draft reports on baseline 

surveys relating to road transport, air 

transport, ports services, insurance, 

railway transport and banking services 

have been received from the concerned 

organisations. It is expected that these 

reports would be finalised within the 

current financial year, 2006-07. A number 

of papers on construction of index of these 

services have also been received, which 

would be presented in a seminar on Service 

Price Index, to be held in early 2007. 

Information Technology Scheme 

This Plan scheme of the Office of the 

Economic Adviser was launched from the 

year 2004-05. The objective of this 

scheme is to impart training to 

employees, acquisition of hardware, 

software as well as development and 

maintenance of software, etc. required for 

the performance of office work. Amount 

of expenditure incurred under the 

scheme was Rs.0.0982 crore in 2004-05 

and Rs.0.0834 crore in 2005-06. An 

expenditure of Rs. 0.0779 crore has been 

incurred as on 12.2.2007. 

Tariff Commission 

Tariff Commission came into 

existence on 2 September 1997 with the 

mandate to evolve an overall tariff structure 

keeping in view the interests of various 

sectors including production, trade and 

consumers and also international 

commitments. 

Some of the broad areas encompassed 

in the Terms of Reference (TORs) as revised 

in September 1998 are as follows: 

a. To make recommendations on 

matters relating to fixation of tariff & 

all tariff related issues in relation to 

trade in goods and services, 

b. To undertake studies relating to 

market access as part of WTO 

framework, 

c. To undertake detailed impact analysis 

on select sectors like textiles, 

agriculture, automobiles, information 

technology, etc., 

d. To examine the transition period for 

reforms and recommend the gradual 

phasing out of the tariffs, and 

82


e. To maintain an inventory of tariff 

rates and monitor tariff changes in 

the trade-partner countries. 

iv. 

Determination of producer price of 

natural gas produced by ONGC and 

OIL. 

The erstwhile Bureau of Industrial 

Costs & Prices was merged with the Tariff 

Commission on 1.4.1999. Presently, the 

Commission is headed by a full-time 

Chairman of the rank of Secretary to the 

Government of India, assisted by a full-time 

Member Secretary in the rank of Additional 

Secretary. The Commission may also have 

3 to 5 part-time / full time members. So 

far, apart from the Chairman and Member 

Secretary, no other member has been 

appointed. 

I 

Re-Orientation of Plan Schemes 

The following plan schemes are in 

operation 

a. Sectoral and developmental studies 

b. Computerisation 

c. Library & infrastructure development. 

II 

Studies Completed 

Following studies have been 

completed during the year 2006-07 (i.e. 

from 1 April 2006 to 15 October 2006) 

v. Cost study on revision of rates in 

respect of various types of condoms. 

III 

Studies in Progress 

i. Impact of Indo-Singapore 

Comprehensive Economic 

Cooperation Agreement (CECA) 

ii. 

iii. 

iv. 

Impact of taxes and duties on the 

competitiveness of the Indian Auto 

Component Industry as compared to 

Auto Component Industry in China 

and other South East Asian Countries 

Benchmarking of machine tools 

sector, particularly comparison of M/s 

HMT Machine Tools Ltd. with leading 

players in the private sector 

Impact of FTAs on domestic pharma 

industry 

v. The competitiveness of Indian telecom 

equipment manufacturing units and 

demand for telecom equipment, 

handsets, parts and components 

i. Impact of Free Trade Agreement with 

Sri Lanka 

vi. 

Export competitiveness of wagon 

manufacturing units in India 

ii. 

iii. 

Transportation tariff charged by 

M/s GAIL for supply of KG Basin Gas 

to power producers through its 

pipeline network 

Mechanism for coal pricing 

vii. 

viii. 

Critical analysis of the impact of Port 

Tariff Regulation and the effect of 

such regulation on EXIM trade 

Impact of liberalisation of tariffs and 

quota restrictions on the unorganised 

83


ix. 

sector with reference to China and 

other countries 

Assistance that can be given to Indian 

companies to bid for and win 

infrastructure and economic/social 

development projects, contracts being 

multilaterally funded in Africa 

x. Preparation of data base of items 

being frequently imported/exported 

by the biotech companies 

xi. 

xii. 

xiii. 

xiv. 

IV 

Economics of transportation of POL 

by various modes for suggesting 

appropriate and optimal model mix. 

Evaluation of sustainability of the 

present operation of M/s Hindustan 

Photo Films Manufacturing Co. Ltd. 

in the current economic scenario 

Pricing of levy sugar. 

Cost-pricing of complex fertilizers, 

DAP and MOP. 

Other Activities 

Other activities undertaken by the 

Commission during the during the year are 

as under:- 

a. Creation of database for monitoring 

global trends and trade policy 

measures. 

b. Updating the website of the Tariff 

Commission & putting the requisite 

information under Right to 

Information Act, 2005 on its website. 

c. Training of employees to respond 

effectively to the changing 

organisational needs. 

d. Collection and scanning of 

international trade, WTO literature. 

e. Updating library and documentation 

facilities to enable the organisation to 

deal appropriately with WTO issues. 

f. Strengthening of computer network 

infrastructure. 

Office of the Salt Commissioner, 

Jaipur 

Salt Organisation was established 

during the beginning of 19th Century to 

collect duty on salt. Duty on salt was 

abolished from 1 st April 1947 and Cess on 

Salt was imposed. The levy of Cess on Salt 

was regularised by an enactment of Salt 

Cess Act, 1953 with retrospective effect. 

The Salt Organisation with its 

headquarters at Jaipur is headed by the 

Salt Commissioner who is assisted by five 

Deputy Salt Commissioners, nine Assistant 

Salt Commissioners and other supporting 

staff. There are five Regional Offices 

functioning at Chennai, Mumbai, 

Ahmedabad, Jaipur and Kolkata, besides 

the field offices in all the salt producing 

States. The total staff strength of the office 

is 857 including 15 Group “A” officers. 

The Salt Organisation is responsible 

for administration of the Salt Cess Act, 

1953 and rules made there under. The 

other main functions of the organisation 

84


include planning of production targets, 

distribution of Salt and price surveillance, 

promotion of technological development, 

maintenance of standards and quality 

improvement of Salt planning, formulation 

and monitoring the excecution of 

development and labour welfare schemes 

particularly construction of houses for salt 

workers under Namak Mazdoor Awas 

Yojana, custody and superintendence of 

departmental salt lands, promotion of 

export and pre-shipment inspection, and 

rehabilitation of salt works affected by 

natural calamities. 

Salt Commissioner’s Office is 

identified as the nodal agency for 

implementation of National Iodine 

Deficiency Disorders Control Programme 

(NIDDCP), a plan scheme being 

administered by the Ministry of Health and 

Family Welfare, in so far as it relates to 

monitoring production and quality of 

iodised salt at production level and its 

distribution to the consuming centres. 

Salt Commissioner has been declared 

as the inspecting agency for the issue of 

export worthy certificates for export of salt 

under the Quality Control and Export 

Inspection Act, 1963. 

Subordinate Offices 

Petroleum And Explosives Safety 

Organisation (Peso) 

The Petroleum and Explosives Safety 

Organisation is headed by Chief Controller 

of Explosives with its headquarters at 

Nagpur. It is the nodal agency to look after 

safety requirements of the explosives and 

petroleum sectors. It has five circle offices 

located at Kolkata, Mumbai, Chennai, 

Faridabad and Agra and 18 sub-circle and 

field offices in the country. It also has a 

testing station at Gondkhairy, Nagpur, where 

various tests on explosives, safety fittings of 

road tankers, cylinders/containers, explosive 

packing boxes, shelf life and stability test of 

explosives and sample testing of fireworks 

are carried out. For ensuring safety and 

security of public and property from fire and 

explosion, the Organisation as a statutory 

authority, is entrusted with the 

administration of the following Acts/Rules: 

Explosives Act, 1884 

1. Explosives Rules, 1983. 

2. Gas Cylinders Rules, 2004. 

3. Static & Mobile Pressure Vessels 

(Unfired) Rules, 1981. 

4. Notification No.GSR 625(E) dated 

07.08.1983 regarding Acetylene. 

Petroleum Act, 1934 

1. Petroleum Rules, 2002. 

2. Calcium Carbide Rules, 1987. 

3. Cinematography Film Rules, 1948. 

Major Activities and Functions 

1. To approve layout and construction 

plans as well as licensing for 

explosives manufacturing units and 

other installations. 

2. To control and monitor the sale and 

transaction of explosives throughout 

the country. 

85


3. To regulate and implement safety 

norms in over 2.2 lakh licenced 

premises used for manufacture, 

storage, transport and handling of 

hazardous substances. 

4. To advise port, airport and railway 

authorities on transportation of 

explosives and other dangerous 

substances. 

5. To impart training to police personnel, 

security and other officers in 

detection and safe handling of 

explosives. 

Revenue and Expenditure 

The Organisation has always had 

revenue surplus. The trend of growth in 

revenue and expenditure of the 

Organisation for the last five years are given 

are given in Table 8.1. 

Table 8.1 

(Rs. In crores) 

Year Revenue Expenditure 

(Non-Plan) 

2002-03 24.14 9.23 

2003-04 29.37 10.14 

2004-05 35.60 10.51 

2005-06 35.36 11.33 

2006-07 10.07 6.85 

(up to 31/10/06) 

Modernisation and Computerisation 

Following steps have been initiated to 

make the functioning of the Organisation 

efficient, transparent and user-friendly 

1. The Tenth Plan outlay for PESO was 

Rs.10 crores for upgradation of 

computer network, modernisation of 

the Organisation, and for the 

Fireworks Research and Development 

Centre. The likely expenditure by the 

end of the Plan period would be 

Rs.12.74 crore. 

2. A Fireworks Research and 

Development Centre (FRDC) is being 

established at Sivakasi, Tamil Nadu. 

The construction of the FRDC 

Building is likely to be completed by 

March 2007. 

3. Explosives Rules have been reviewed 

keeping in view the advancement in 

manufacturing and application 

technologies of the Indian industry, 

to adapt to the UN guidelines, and 

also feed backs received from the user 

and industry. The Draft Explosives 

Rules, 2006 has been published in 

the Gazette inviting suggestions / 

objections. 

4. LPG and CNG being green fuels with 

minimum pollutant emissions, 

several LPG and CNG dispensing 

stations have been approved / 

licensed by the Organisation in 

various cities of the country. 

Office of the Controller General of 

Patents, Designs and Trade Marks 

The Office of the Controller General of 

Patents, Designs and Trade Marks 

(CGPDTM) administers the Patents Act, 

1970, the Designs Act, 2000, the Trade 

Marks Act, 1999 and the Geographical 

Indications of Goods (Registration and 

86


Protection) Act, 1999 and also renders 

advice to the Government on matters 

relating to Industrial Property Rights. The 

CGPDTM supervises the functioning of: 

a. The Patent Office (including the 

Designs Wing) 

b. The Patent Information System (PIS) 

and the Intellectual Property 

Training Institute (IPTI), 

c 

The Trade Marks Registry, and 

d. The Geographical Indications Registry 

(GIR). 

The Office of the CGPDTM is a 

revenue generating office. During the year 

2005-06, through intellectual property (IP) 

administration, the Patent Office 

(including the Designs Wing) generated an 

income of Rs. 94.41 crore and the Trade 

Marks Registry (including GIR) generated 

Rs. 49.77 crore. As against this, non-plan 

expenditure by the Patent Office (including 

the Designs Wing) and the Trade Marks 

Registry (including Geographical 

Indications Registry) was Rs. 6.36 crore 

and Rs. 5.08 crore, respectively. Thus, 

against total revenue of Rs. 144.18 crore 

earned during 2005-06, the actual 

expenditure was Rs.11.044 crore, leaving 

a revenue surplus of Rs.132.74 crore. It 

is expected that in the financial year 2006- 

07, the revenue would be higher compared 

to previous year. The government has 

taken several initiatives to modernise and 

Dr. Ajay Dua, Secretary (Department of IPP) at the International meeting on Intellectual Property & 

Development Issues in New Delhi. 

87


streamline the intellectual property 

administration in the country in view of 

the strategic significance assumed by 

intellectual property in the context of 

globalisation and liberalisation of the 

Indian economy and increasing stress on 

innovation and creativity. These include 

both legislative and administrative 

measures to create a modern facilitative 

set-up. All laws on patents, designs, 

trademarks and geographical indications 

have been amended/enacted and updated. 

As part of the project for modernisation of 

IP offices, modern office buildings in Delhi, 

Kolkata, Chennai and Mumbai have been 

made operational. Comprehensive 

computerisation of operations is also being 

carried out along with enhancing human 

resource capabilities of IP offices. The 

office has a website namely, 

www.ipindia.nic.in where all laws and 

rules administered by the Office are 

available. An amendment to the Patents 

Rules, notified in May 2006, represented 

yet another major step forward in India’s 

endeavour to develop a vibrant and userfriendly 

Intellectual Property Regime 

which would facilitate as well as encourage 

innovation and creativity. These Rules 

decentralised the processing of patent 

application and prescribed definite time 

frame for processing of patent 

applications. Recognising the critical 

importance of awareness of IP systems for 

scientific and business community, IP 

offices have been undertaking awareness 

generation programmes and assisting 

other organisations engaged in similar 

activities. A brief account of the activities 

of the various offices under CGPDTM is 

given below. 

The Patent Office: The Patent Office 

performs statutory functions relating to the 

grant of patents for inventions, renewal of 

patents, amendments, restoration of lapsed 

patents, grant of compulsory licenses, 

registration of patent agents, etc. under the 

Patents Act, 1970. The Head Office of 

Patent Office is at Kolkata with branch 

offices at Mumbai, Chennai and Delhi. The 

offices deal with the applications for 

patents originating within their respective 

territorial jurisdictions. A total of 24,505 

applications, including 19,984 from other 

countries, were filed during 2005-06, 

registering an increase of about 40 per cent 

over the previous year. The applications 

for patent filed during the period from April 

to December 2006 numbered 20,899. 

About 7,700 more applications are 

expected by March 2007. Thus, the total 

expected filings for the year 2006-07 will 

be about 28,600 representing an increase 

of about 17 per cent over the previous year. 

Indian inventors are also increasingly 

using the Patent Cooperation Treaty (PCT) 

route to obtain national patents as well as 

patents in other countries. During the year 

2005-06, 482 international applications 

under the PCT were received as against 456 

application in the year 2004-05. 

Under the project for modernisation 

of Patent Offices, online search facilities 

have been established; library and novelty 

search facility has been strengthened; CD- 

ROMs of patent databases of UK, USA and 

European Patent Office have been acquired; 

manual of patent office procedure and 

practices has been prepared to ensure 

uniformity in operation and digitisation of 

88


patent records undertaken. These steps 

have resulted in significant improvement in 

the performance of the office. The number 

of patents granted during 2005-06 went up 

to 4,320 as against 1,911 in 2004-05. 

Patent Information System (PIS): Patent 

Information System (PIS) at Nagpur 

maintains a comprehensive collection of 

patent specification and patent related 

literature, on a worldwide basis and 

provides technological information 

contained in patent or patent related 

literature through search services and 

patent copy supply services to various 

users of industry, R&D organizations, 

Government departments, undertakings/ 

entrepreneurs, business, inventors and 

other users within India. During the period 

from April 2006 to 30th December 2006, 

PIS supplied copies of 250 patent 

specifications and conducted 46 patent 

searches. 

Intellectual Property Training Institute 

(IPTI): IPTI, Nagpur conducts training 

programmes for personnel engaged in 

intellectual property rights matters and 

provides training to Examiners of Patents 

& Designs and organises awareness 

programme for users such as patent 

attorneys, scientists, researchers etc. 

Industrial Designs Wings: The registration 

of industrial designs under the Designs Act, 

2000 is done by the Designs Wing of the 

Patent Office located at Kolkata. Filing of 

design applications in branch offices at 

Delhi, Mumbai and Chennai is also 

allowed. The thrust of the modernisation 

programme of Design Office includes a 

transition from the essentially paper-based 

examination procedure to an IT-based 

system supported by computerisation of 

existing records, online search facilities, 

setting up a user-friendly website and 

creation of digital library. 

A total of 4,949 applications for 

registration of designs were received in 

2005-06. During April 2006 to September 

2006, a total of 2,426 applications have 

already been received. It is expected that 

during 2006-07 this would increase to 

about 5,900 applications based on the 

assumption of 20 per cent increase in filing 

as compared with the corresponding figure 

of last year. 

Trade Marks Registry (TMR): The Trade 

Marks Registry (TMR) with Head Office at 

Mumbai and branch offices at Ahmedabad, 

Chennai, Delhi and Kolkata administers 

the Trade Marks Act, 1999 and maintains 

the register of trade marks. 

A total of 85,669 applications, 

including 12,361 from other countries were 

filed during 2005-06. During the period 

from April to February 2007, 97,375 

applications for trademarks have been filed. 

The number of applications for trademarks 

during the period April 2006 to March 2007 

is expected to be about 1,10,000 registering 

an increase of approximately 15 per cent 

over the previous year. 

The total number of registered trade 

mark in India as on 28 February 2007 is 

4,91,276. The number of Indian registered 

trade marks is 4,00,074. Between 1 April 

2006 to 28 February 2007, 48,416 

89


trademarks have been registered in India 

and approximately 63,416 trade marks are 

expected to be registered by 31 March 

2007. Total IT solution of the Registry is 

in an advanced stage of implementation. 

This will enable TMR to provide facilities 

for on-line filing with payment gateway and 

web-enabled trade marks transactions. 

Ultimately, this exercise will establish 

transparency and speedy disposal of trade 

mark cases. 

Geographical Indications Registry (GIR): 

The GIR is a statutory organisation set up 

for the administration of the Geographical 

Indications of Goods (Registration and 

Protection) Act, 1999, which came into 

force on 15 September 2003. The Registry 

is situated at Chennai. Twenty-eight 

Geographical Indications (GIs) have been 

registered as on 30 September 2006. List 

of registered GIs (products), inter-alia, 

includes, Darjeeling Tea, Pochampally Ikat, 

Chanderi Sarees, Kota Doria, 

Kancheepuram silk, Mysore Agarbathi, 

Mysore silk, Madurai Sungudi, Kullu 

Shawl, etc. 

GIR has taken steps to conduct 

awareness programmes throughout India 

to promote registration of the Indian GIs. 

The sectors being focussed on are tea, 

coffee, rice, spices, tobacco, horticulture 

products, handloom products, 

handicrafts, textiles, processed food 

items, and spirits and wines. Till 30 

September 2006, 40 sensitisation 

seminars / workshops have been 

conducted. The Registry officials have 

participated as faculties in seminars / 

workshops conducted by external 

agencies. Software has been developed 

according to the workflow of GIR. The 

publication of Geographical Indications 

Journal has been made in-house. 

Intellectual Property Appellate Board 

(IPAB): The Intellectual Property Appellate 

Board (IPAB) was established on 15 

September 2003 at Chennai with a 

Chairman, a Vice-Chairman and two 

Technical Members. The IPAB has 

appellate jurisdiction over the decisions 

of the Registrar of Trade Marks and 

Registrar of Geographical Indications. 

Besides Chennai, the Appellate Board 

holds its sittings at Ahemedabad, Delhi, 

Kolkata and Mumbai which disposed of 

498 original/transferred appeals/ 

applications and 266 misc. petitions upto 

December 2006. 

Other Organisations 

Office of the Technical Adviser (Boilers) 

The office is headed by the Technical 

Adviser (Boilers). The functions of the 

Technical Adviser (Boilers) are to: 

l 

l 

Advise the Central Government on all 

matters relating to administration of 

the Indian Boilers Act (IBA), 1923 and 

the Indian Boiler Regulations (IBR) 

framed thereunder. 

Deal with cases/matters on which 

direction is to be given to State 

Governments by the Central 

Government for carrying out 

execution of the provisions of the 

Indian Boilers Act. 

90


l 

l 

l 

l 

l 

Advise the Chief Inspector of Boilers 

of the States and Union Territories on 

all difficult cases including 

inspection, material testing and nondestructive 

examination involving use 

of X-rays, radio isotopes, ultrasonic 

waves, etc. 

Deal with problems which are thrown 

up by the manufacturers and users 

of boilers and others concerned and 

give necessary advice and guidance. 

Examine proposals for amendment of 

regulations including drawings, 

designs, calculations and 

specifications for submissions to the 

Central Boilers Board. 

Deal with the work relating to 

framing or amendment of regulations 

for laying down the standards for 

material, design and construction of 

boilers and also for regulating the 

inspection and examination of 

boilers. 

Interpret the provisions of the Indian 

Boiler Regulations,1950. 

l 

l 

the Central Boilers Board where the 

Technical Adviser (Boilers) is the 

Chairman. 

Deal with various matters in 

connection with the administration of 

the Indian Boilers Act, viz., scrutiny 

of proposals regarding amendment of 

the IBR, 1950 in line with the latest 

technological developments in the 

developed countries. 

Bring out Annual Report on the 

working of the Act in various States 

and scrutiny of Accident Reports. 

l Evaluate quality management 

systems and production facilities of 

various firms for their recognition as 

steel makers, foundries, forges, tube 

& pipe makers, material testing 

laboratories and remnant life 

assessment organisations under IBR, 

1950 in order to cut down the 

inspection delays and increase 

availability of the boiler components 

without sacrificing the safety and 

quality of the boilers and its 

components. 

l 

l 

Supervise the work relating to 

realignment and metrication of the 

Indian Boiler Regulations, 1950. 

Deal with cases relating to revision of 

the orders of Appellate Authority 

constituted by the State 

Governments/Union Territory 

Administrations. Conduct meetings 

of all Technical Sub-Committees of 

l 

Conducting One-day workshops on 

Efficient Boiler Operation and 

maintenance to apprise the owners of 

boilers of the steps to be taken to 

optimise the efficiency of their 

working boilers. These are being 

continuously conducted through the 

National Productivity Council to 

popularise the measure for energy 

conservation. 

91


Central Boilers Board 

The Central Boilers Board, 

constituted under Section 27A of the Indian 

Boilers Act, 1923 (5 of 1923) is responsible 

for making regulations for laying down the 

standards for material, design, 

construction as well as for registration and 

inspection of boilers. The Board comprises 

of the representatives from the Central and 

State Governments, Union Territories, 

Bureau of Indian Standards, coal industry, 

boiler manufacturing industry, boiler 

ancillaries industry, steel manufactures, 

users of boilers and other interests groups 

connected with the boiler industry. 

The Secretary, Department of 

Industrial Policy and Promotion, is the exofficio 

Chairman and Technical Adviser 

(Boilers) is the ex-officio Member-Secretary 

of the Board. 

The Board deals with problems of 

both the users and manufacturers and 

takes policy decisions for the proper growth 

of the boiler manufacturing units in the 

country. The Board formulates the Indian 

Boiler Regulations incorporating the latest 

developments taking place in the boiler 

industry all over the world. The Board’s 

responsibilities have also increased with 

the induction of 660 MW Supercritical 

Pressure Boiler Units in the country. 

The Central Boilers Board considered 

27 technical cases pertaining to 

amendment of Indian Boilers Regulations, 

1950. In addition, the Board considered 

and granted recognition as Inspecting 

authority, Competent authority, Wellknown 

Steel Makers/Foundries/Forges/ 

Pipe & Tube Makers, Material Testing 

Laboratories and Remnant Life 

Assessment Organisations under Indian 

Boiler Regulations, 1950 in 40 cases 

during the year 2006-07. Based on the 

decisions of the Board, 19 amendments 

to various provisions of Indian Boiler 

Regulations were pre-published and 

amendments to 15 regulations have been 

promulgated. 

Principal Accounts Office 

The Departmentalised Accounting 

Organisation of the Department of 

Industrial Policy and Promotion was set up 

in April 1976. 

The Accounting Organisation is headed 

by the Chief Controller of Accounts who is 

assisted by one Controller of Accounts, one 

Dy. Controller of Accounts in New Delhi and 

nine Pay and Accounts Officers in different 

parts of the country. The Principal Accounts 

Office, New Delhi functions as the 

administrative centre of the Organisation. 

There is also an Internal Audit Wing with its 

headquarter at New Delhi. The Principal 

Accounts Office also supervises the pay and 

accounts offices of other Departments/ 

Ministries relating to Industry. 

A brief description of various functions 

performed by these units is given below. 

Pay and Accounts Office (PAO) 

Pay & Accounts Office is the basic 

unit of the Accounting Organisation whose 

major functions include: 

92


1. Arranging all kinds of payments 

including disbursement of salary and 

loans, grants in aid, subsidies on 

behalf of the Ministry, personal claims 

of the employees of the Ministry, 

including the attached, subordinate 

offices and various bodies. 

2. Compilation of Monthly Accounts for 

all the payments made and receipts 

realised on behalf of the government. 

3. Authorisation of pension. 

Principal Accounts Office: It’s major function 

includes: 

1. Consolidation of Monthly Accounts 

received from all pay and accounts 

office for onward transmission to 

Controller General of Accounts for 

incorporation in the Union Accounts. 

2. Preparation of the Annual Finance 

Accounts and Appropriation 

Accounts for the Departments/ 

Ministries relating to Industry. 

3. Administration and related aspects 

pertaining to the Accounting 

Organisation. 

Internal Audit Wing: Internal Audit Wing 

carries out audit of the accounts of various 

units of the Ministry including the 

Accounting Organisation and Public Sector 

Banks and grantee institutions to the 

extent required. 

Performance 

Computerized GPF Annual 

Statements for the year 2005-06 were 

issued. The entire monthly accounts as well 

as yearly accounts such as Appropriation 

Accounts, Finance Accounts etc. were 

prepared and submitted to Audit/Office of 

the Controller General of Accounts as per 

the prescribed time schedule. 

Payment of salaries and other related 

claims of the staff and personnel of the 

Ministry and those of attached and 

subordinate offices were attended to 

promptly. Pension payment authorities for 

revision of pensionary benefits to the 

pensioners were also issued promptly as 

per instructions issued by Department of 

Pensions and Pensioners Welfare from time 

to time. 

The Internal Audit Wing inspected 34 

offices from 1 April 2006 to 30 November 

2006. IAW has also conducted pre-audit 

of subsidiary claim of N.E. Region. 

‘COMPACT’ software has been 

introduced in the Pay and Accounts Offices 

to integrate payment and accounting 

function. COMPACT is a multi-user 

software for use at the Pay & Accounts 

Office level that has replaced IMPROVE 

software. This new software has been 

developed with a view to computerise the 

work in all the Pay & Accounts Offices. This 

software has the following features. 

i. Pre-Check (Integrated payment and 

accounting functions and Automatic 

Cheque Printing), 

ii. 

iii. 

Electronic Bank Reconciliation, 

General Provident Fund, 

93


iv. 

Compilation of Accounts, 

v. Settlement of Pension Cases, and 

vi. 

Expenditure vs Budget Control. 

All the Pay and Accounts offices are 

running this software successfully and 

monthly accounts are extracted as and 

when required. A website of the 

Organisation is also being set up to improve 

transparency and efficiency. 


Council (NMCC) 

NMCC was set up in September 2004 

to function as inter-disciplinary and 

autonomous body to serve as a policy 

forum for credible and coherent policy 

initiatives in manufacturing sector. The 

main objective of the NMCC is to energise 

and sustain the growth of manufacturing 

industries in the country and also help in 

implementation of policy strategy. 

The NMCC has prepared “The 

National Strategy for Manufacturing” 

targeting an average growth rate of 12 to 

14 per cent. The strategy paper has been 

adopted by the Government for 


Government has constituted a High 

Level Committee on Manufacturing (HLCM) 

under the Chairmanship of the Prime 

Minister for resolving policy issues that 

may arise in the operationalisation of the 

plans for the growth of various sub-sectors 

of manufacturing. The first meeting of the 

HLCM was held on 4 th August 2006. The 

sectors that have been given priority are 

textiles and garments, food & agro 

processing, leather and footwear, IT 

hardware and electronics, skills 

development, problems of small & medium 

industries including cluster development. 

With a view to facilitate the 

functioning of the HLCM, an Empowered 

Sub-Committee (ESC) has been constituted 

under the Chairmanship of the Chairman 

NMCC. Three meetings of the Sub- 

Committee have been held so far. The 

status of the manufacture of Advanced 

Technology Products (ATPs) in India was 

reviewed in the first meeting of the ESC of 

the HLCM held on 26.10.2006. 

The NMCC has finalised a five-year 


Programme (NMCP) and sent to the 

Ministry of Small Scale Industries for 

getting necessary approvals required for its 

implementation. Ten schemes have been 

drawn up in the Programme. 

NMCC and Microsoft Corporation 

India Private Limited have launched a 

collaboration for competitiveness 

enhancement programme for small and 

medium enterprises in Indian 

manufacturing sector. 

94


9 

TRAINING, RESEARCH AND DESIGN 

INSTITUTES 

Central Manufacturing 

Technology Institute, Bangalore 

Central Manufacturing Technology 

Institute (CMTI), a premier R&D 

organisation in the field of manufacturing 

technology, was established in the year 

1962 as an autonomous body, registered 

as a Society. CMTI plays an important 

role in the application of manufacturing 

technology and supports the engineering 

industry through value-added services 

and product development activities. 

Notable Achievements 

1.0 Design & Development 

v 

v 

Several high value and high-tech 

projects from SMEs, private sector & 

strategic sectors taken-up during the 

previous year are progressing and are 

in various stages of completion. 

A larger version of a ‘Multi-station 

High Tension Stud Tensioning 

Equipment’ has been designed, 

developed and commissioned at site. 

It has dealt with several 

technological challenges during this year, 

involving design and development, 

quality assurance and manufacturing 

engineering applications for high 

precision components. The Institute has 

bagged orders worth about Rs. 28 crore 

during the year bringing the total 

executable order value to about Rs. 38 

crores. The Institute is providing highend 

technical support to SMEs, 

Automobile sector as well as strategic 

sectors. 

v 

v 

v 

Several different hydraulically 

operated Special Tooling Equipment 

have also been developed and 

installed at site. 

Piston Ring Grinding Machines: two 

units have been developed and 

commissioned for an auto component 

manufacturer to meet their 

indigenisation and productivity 

enhancement programme. 

A high precision Computer Numerical 

Control (CNC) Titling Rotary Table for 

95


use on vertical machining centers and 

CNC milling machines has been 

developed as an import substitution 

and would be available to the industry 

for commercial production 

v A Laboratory refiner used in paper 

& pulp industry has been upgraded 

with Programmable Logical Control 

(PLC) and Personal Computer (PC ) 

based controls. This is a vital 

equipment in refining the process 

requirement to achieve required 

quality of paper. 

2.0 Technology Development 

v 

v 

Technology for manufacturing several 

complex components, using 

Computer-Aided Designing/ 

Computer-Aided Manufacturing 

(CAD/CAM) and CNC facilities has 

been developed. 

Precision miniature ball screws and 

flexures for aerospace application: 

vital components of strategic 

importance, which call for high 

technology inputs, are being supplied 

regularly. The technology is available 

for commercialization. 

v Technology for manufacture, 

assembly & testing of airborne quality 

hydraulic system filters for aircrafts 

has been established. 

v 

About 15 aircraft sets, consisting of 

120 units, are being realised to 

encourage limited series production. 

v 

R&D investigations in the area of 

Rapid Prototyping & Tooling for 

different materials like 20 micron size 

Steel Powder are in progress. 

3.0 Development of Test Systems & 

Testing Support to Industry 

v 

v 

v 

The Institiute has developed several 

unique test systems for qualification 

testing of Aerospace and Automobile 

components and sub-systems. 

These systems are regularly used for 

evaluation of pumps / actuators from 

the regular production line for 

customers. 

Hydraulic laboratory, Metallurgical 

laboratory and Chemical laboratory 

provided various laboratory services 

to SMEs in the respective fields in 

about 1200 instances. 

4.0 Quality Assurance And Laboratory 

Accreditation Activities 

A National initiative on proficiency 

testing and inter laboratory evaluation for 

laboratory quality systems has been 

actively designed and executed by CMTI for 

the National Board for Accreditation of 

Laboratories (NABL). 

5.0 Technology Transfer Initiatives 

The National Information Centre for 

Machine Tools and Production Engineering 

(NICMAP) has been promoting the 

membership of the Institute and providing 

96


various information services to the 

industry. 

5.1 Training – 

v 

v 

The Institute has conducted 

various training programmes in 

different areas of Manufacturing 

technology, Precision 

Engineering, Metrology & 

Calibration, CAD / CAM / CNC, 

Mechatronics & Automation, 

Micro Engineering & Nano 

Technology, Nano Machining, 

Geometrical Dimensioning & 

Tolerancing, etc. for participants 

from Indian industries. 

Customised Corporate Training 

Programmes have been 

conducted in Maintenance 

Management, Cost Estimation, 

Calibration, Geometrical 

Dimensioning & Tolerancing, 

etc. for Anand Group, Transcal, 

Liquid Propulsion System 

Centre (LPSC), Bharat Earth 

Movers Limited (BEML), etc. and 

guidance has been provided to 

several engineering students in 

their project work. 

5.2 Technical information services 

v 

78 technical enquiries on 

bibliographic product data and 

patent information were 

attended to. 

v The monthly publication 

Manufacturing Technology 

v 

Today, features technical papers 

from Academia, Institutions. 

Industry, National & 

International events and other 

information. 

CMTI’s Machine Tool Design 

Hand Book is a valuable 

reference source which has been 

reprinted 27 times and is 

continuously updated. 

5.3 Outreach Programmes 

v 

v 

Implementation support for 

‘common cause’ initiatives at the 

national level to assist the 

manufacturing industries / 

clusters to become competitive 

is continuing. 

The regional centre of the institute 

at Rajkot has been augmented 

with latest equipment for 

calibration of measuring 

equipment and CNC machines. 

v Equipment procured for 

upgradation of the facilities at 

the Institute for Machine Tool 

Technology (IMTT), Batala, have 

been commissioned. 

v 

The institute has signed MOUs 

with Scientific Instruments & 

Electrical Appliances Cluster at 

Ambala, Auto Clusters at 

Pitampur, Vijayawada, Hubli- 

Dharwad Valve Cluster for 

providing technology 

consultancy. Technical Support 

97


Conclusion 

v 

v 

under the MOU for Pune Auto 

Cluster is in progress. 

CMTI has assimilated several 

technologies, which are unique. 

Visits by business delegations, 

industries, R&D organizations, 

educational & technical institutions 

are a regular feature for the 

Institute. 

Central Pulp & Paper Research 

Institute, Saharanpur 

The Central Pulp & Paper Research 

Institute (CPPRI), Saharanpur is a registered 

body under the Societies Registration Act, 

1860 and has its headquarters at 

Saharanpur (UP). The Institute was set up 

in November 1980 as a nodal centre for 

carrying out research in the field of pulp 

and paper and helping the Indian paper 

industry to meet its R&D needs. 

Image Analyzer with Customized Software for 

Quantification of Stickies & Hot melts installed 

at CPPRI 

The management of the institute vests 

with the Council of Association, which 

includes representatives of the Paper 

Industry, Government, Scientific and 

Research Institutions, etc. Planning and 

monitoring of research and developmental 

programmes are undertaken by the 

Research Advisory Committee of the 

Institute. 

The Institute focuses on R&D 

activities while addressing the key issues 

relating to Indian paper industry such as 

raw material and process research, energy 

& environmental management, quality 

improvement, water conservation and 

information dissemination through the 

financial support from the Plan and Non- 

Plan funded schemes. 

Notable Activites and Achievements 

during the year. 

v 

During the period under report, 

CPPRI continued to enhance its 

interaction with the Indian paper 

industry by organising interaction 

meets/workshops/seminar/ 

exhibitions, mill visits, training 

programmes and inviting guest 

lectures. Its international 

collaboration with various important 

bodies such as STFI, Sweden; IJSG/ 

UNIDO, Japan International 

Coordination Agency (JICA), Japan; 

CTP, France has also increased and 

it continued its trend of providing 

consultancy at an international level 

to countries like Myanmar, 

Bangladesh and Thailand. 

98


v 

v 

v 

v 

Besides, R&D programmes, CPPRI 

continued rendering its services to 

statutory organisations like Bureau 

of Indian Standards (BIS), Bureau of 

Energy Efficiency (BEE) and Central 

Pollution Control Board (CPCB), etc. 

in formulation of paper quality, 

energy & environmental standards & 

bench marking of input norms for 

paper industry 

As many as 59 pulp and paper mills 

were visited by the Scientists in 

connection with consultancy and 

sponsored research project. 

2,464 samples of pulp, paper, raw 

material, black liquor, etc. received 

from paper mills, Government 

agencies, consulting organisations, 

etc. were evaluated. 

More than 30 articles and 35 reports 

were published in the national and 

international journals and 3 patents 

were filed in the area of raw material 

and process research and 

environment improvement. 

v 

v 

Government agencies, financial 

institutions, traders, exporters, 

importers, equipment & chemical 

manufacturers and the academia in 

India and abroad. 

Infrastructure facilities were updated 

in the area of Physical Chemistry, 

Pulping & Bleaching; Stock 

Preparation, Papermaking and 

Chemical Recovery, Energy 

Management, Biotechnology and 

Effluent Treatment. The Laboratory 

facilities were upgraded by procuring 

11 new equipments in the above 

areas. Under the project 

infrastructure for electrical / 

mechanical systems & maintenance 

of R&D, facilities at CPPRI were 

created and upgraded. Library 

building and Information Service 

Centre for Indian Paper Industry was 

constructed. 

The Institute has developed the 

following technologies which are 

under various stages of transfer/ 


v 

v 

Nearly 300 technical personnel 

participated in 25 training 

programmes conducted on mills sites 

as well as at CPPRI’s premises at 

Saharanpur UP. 

The Institute has published a 

comprehensive report on Statistics of 

the Indian pulp, paper and newsprint 

industry in two volumes, which has 

proved to be an effective resource 

material for policy makers, 

l 

l 

l 

l 

l 

De-pithing of bagasse by Disc 

milling 

High alpha cellulose pulp from 

bagasse 

Enzymatic pre-bleaching of 

pulps 

Electro flocculation process for 

colour removal 

Improved newsprint from waste 

papers 

99


l 

Oxidative de-inking technology 

for quality upgradation of 

indigenously recovered papers 

The institute maintained its status of 

being an ISO 9001:2000 to continue to 

ensure high quality of technical and 

consultancy services. 

During the year 2005-2006 the total 

receipts of the institute were Rs. 941.16 

lakh and the total expenditure was 

Rs. 645.15 lakh, including capital 

expenditure of 122.35 lakh. This year, 

the Institute has generated an internal 

revenue of Rs.157.32 lakh. 

Indian Rubber Manufacturers 

Research Association, Thane 

The Indian Rubber Manufacturers 

Research Association (IRMRA) was 

established as a co-operative research 

association with autonomous status in 

1959 with the aim and objectives of 

promoting and undertaking basic and 

applied research with regard to rubber and 

allied products. The institution is an active 

member of Bureau of Indian Standards 

(BIS) and has been accredited by NABL 

(ISO-17025-2005). Its management system 

is certified for compliance of International 

Quality Standared ISO-9001:2000. It is 

also recognised by world renowned 

laboratory like UL (Underwriters 

Laboratory), USA. 

IRMRA is established with broad-based 

aims and objectives, viz., to provide 

assistance to industry in testing, 

investigation, analysis, technical 

consultancy and guidance; to undertake 

short and long-term research and 

development assignments as required by 

the industry; to disseminate and provide 

updated information in the form of 

technical consultancy, training, organising 

and participating in seminars, conferences, 

workshops, etc. 

IRMRA has excellent facilities for 

organising technical training courses 

conducted by qualified and experienced 

scientists. Its scheme of training the 

industry personnel has borne good results. 

IRMRA has completed many research and 

development assignments, which include: 

l 

l 

l 

l 

l 

l 

l 

Development of Rubber Booting 

for Bhabha Atomic Research 

Centre 

Development of Seals for Door 

& Hatches for Navy, Defence 

Development of Pneumatic 

Mount for Naval requirement 

Utilisation of Waste Tyre as 

Chunk Rubber composite 

Digital Video Content course 

Development of Thermoplastic 

Elastomer 

Utilisation of Electron Beam in 

Rubber Fibre Composite 

especially for Tyres 

l Development of Rubber 

Compound as well as process 

parameter suitable for injection 

moulding for rubber coating of 

Diamond Tools Cutting Wire 

100


l 

l 

l 

l 

Development of PU compound 

for shaping of floor tiles 

Development of PU Rubber 

Bellow (Robotic Manipulator) 

Development of Rubberised 

Cork Gasket 

Development of Rubber Bush for 

automobile 

l Development of Vibration 

Absorption Rubber Mount and 

Rubber Pad 

l 

l 

l 

l 

l 

Development of Steel Composite 

Gasket 

Development of Compoundbased 

on Silicon Rubber, Nitrile 

Rubber and Acrylic Rubber 

Development of Metal to Nitrile 

Rubber bonded gasket 

Development of Sponge Rubber 

Roller 

Development of Fluorocarbon 

Rubber-based Seals for nuclear 

application 

l 

l 

l 

l 

l 

l 

l 

l 

l 

l 

l 

Development of various types of 

critical rubber components 

Development of sponge rubber 

for Nuclear Reactor Door 

Development of Die cleaning 

compound 

Development of Nano fillers 

(inorganic) and its use in rubber 

compounds 

Rubber Engineering-designing 

of rubber products and their 

dies 

Development of compatibilisation 

of crumb rubber with 

Bitumen for road application 

Bio-degradation of rubber 

vulcanisate 

Waste utilisation of Lignin from 

paper industries 

Radiation compatibilisation of 

NR-EPDM blends 

Devulcanisation of Butyl Tube 

Utilisation of waste coir pith in 

rubber products as low cost fillers 

l 

l 

Development of EPDM rubber 

O-ring 

Development of seals for nuclear 

reactor 

l Development of rubber 

compound for further 

improvement of acoustic 

properties 

l Development of rubber 

compound for Bogie Wheel 

l 

Development of Cork Gasket 

IRMRA’s scientists have submitted 

the following proposals for Patents: 

l 

l 

l 

Utilisation of waste tyre as 

Chunk Rubber Composite for 

Road Pavement and civil 

construction. 

Devulcanisation of Butyl tube at 

ambient temperature. 

Synthesis of Nano-mineral fillers 

by the reaction in lather phase 

interaction. 

101


l Synthesis of rubber 

encapsulated nano clay in 

powder form by precipitation 

technique. 

l 

Synthesis and isolation of metalnano 

particles by Electrodeposting 

method 

IRMRA has ventured into new 

diversified areas such as setting up of 

Rubber Engineering Section, Nano 

Technology Lab, Rubber Consultancy 

Clinic and exploring the possibility of 

development of Rubber Dam for the first 

time in the Country. UL (Underwriters 

Laboratory), USA has also recognised 

IRMRA as a quality certifying agency for 

rubber components exported to USA and 

entered into MOU with IRMRA. 

The organisation’s focus in the next 

decade on SMART Rubber Research is based 

on the fact that the convergence of Frontier 

Technologies especially in areas such as 

Nano materials, processes coupled with 

sound research skills and discipline will yield 

substantial benefits not only for IRMRA but 

also to the Industry that it is designed to serve 

both here and increasingly in the coming 

years on the international arena. 

National Council for Cement and 

Building Materials 

National Council for Cement and 

Building Materials (NCB) is a cooperative 

research organisation registered as a 

Society under the Societies Registration 

Act, 1860. The Council provides scientific, 

technological and industrial services 

support to the cement, related building 

materials and construction industries and 

carries on its activities through its units 

located at Ballabgarh, Delhi, Hyderabad, 

Ahmedabad and Bhubaneswar. 

NCB’s activities are channelised 

through the following six Programme 

Centres: 

l Cement Research and 

Independent Testing 

l 

l 

l 

l 

l 

Mining, Environment, Plant 

Engineering and Operation 

Construction Development and 

Research 

Industrial Information Services 

Continuing Education Services 

Quality Management, Standards 

and Calibration Services 

Some of the major activities during 

the year 2006-07 have been given here: 

1 Cement Research and Independent 

Testing 

A study under project on maximizing 

the usage of local laterite, a low cost 

material, in cement raw mix has 

established that local laterite could be used 

upto 5.3 per cent in the manufacture of 

OPC. Another project on raw mix design 

for a Greenfield cement project, established 

that using either 100 per cent pet coke or 

a 70:30 ratio blend of petcoke and lignite, 

optimum raw mix could be obtained using 

95-99 per cent limestone in the raw mix. 

It was also possible to utilise upto 3.5 per 

cent limestone reject in the raw mix. 

102


Studies were initiated on the 

development of composite cements for 

Indian market. Composite cements were 

prepared using clinker-flyash-slaggypsum, 

clinker-flyash-limestone-gypsum 

and clinker-slag-limestone-gypsum 

combinations. 

Studies on development of 

technologies for the manufacture of 

sintered aggregate for construction have 

established that fly ash (upto 60%) 

alongwith some other suitable industrial 

waste can be gainfully utilised in making 

sintered aggregate to be used for 

construction purpose. The various 

characteristics such as soundness, impact 

value, abrasion value, water of absorption, 

elongation index, flakiness index of the 

developed sintered aggregates have been 

evaluated and found to be in the desirable 

range. The aggregate shall now be used in 

concrete and the performance shall be 

evaluated. 

Diagnostic studies were carried out 

on kiln shell corrosion in a cement plant 

to overcome/ reduce kiln shell corrosion. 

Studies on maximising the use of fly 

ash in the manufacture of cement, 

concrete and other building materials have 

established that utilisation level of flyash, 

after processing, can be enhanced upto 

40 per cent in the manufacture of PPC. 

Similarly, the physical characteristics of 

coarse fly ash samples received from 

Reliance Energy Ltd. and NTPC, Tanda 

were improved on their processing. A 

study on maximizing utilization of fly ash 

in PPC has shown possibility of using 27 

per cent fly ash in place of 22 per cent for 

a major cement plant. 

Investigations carried out at NCB 

have indicated increased scope of 

utilisation of industrial wastes/ by 

products such as lead-zinc slag (5.5% in 

OPC and 40% in PSC) and marble slurry 

as raw mix component (around 20%) in the 

manufacture of cement. Investigations on 

utilisation of spent pot lining, a waste from 

aluminium industry, as a mineraliser in the 

manufacture of cement is in progress. 

About 6500 samples of cement 

pozzolana, clinker, raw materials, coal 

bricks water aggregate, admixture slag, 

mortar, concrete paver blocks, refractory, 

silica fume etc. were tested during the 

current year. 

2 Mining, Environment, Plant 

Engineering & Operation 

Preliminary investigations for 

technical viability of beneficiation for 

limestone on laboratory scale were carried 

out for two cement plants and those for 

another plant are in progress. 

Studies on Life Cycle Assessment (LCA) 

for cement sector were continued. Four major 

cement plants were evaluated in terms of 

environmental parameters like global 

warming potential, acidification potential, 

resource conservation and land use. It has 

taken an integrated view of the process 

parameters encompassing various inputs 

like raw materials, thermal and electrical 

energy and output during emissions and the 

production of cement. Suggestions for 

103


further environmental improvements were 

given for sustainable global needs. 

Ten Rapid EIA/EMP studies for 

expansion projects of cement plants, mines 

and captive power plants were carried out. 

NO x 

and SO 2 

emission levels of 

various cement plants were analyzed jointly 

by NCB and CPCB. Best available 

technologies for the reduction of SO 2 

and 

NO x 

which are being adopted in developed 

countries, are being evaluated to find 

suitability to the Indian condition. 

Utilisation of hazardous combustible 

wastes (HCW) like used tyres and ETP 

sludge in cement manufacture was studied. 

A feasibility study was carried out for 

a Thermal Power Station (DTPS) to set up 

the grinding facility to pulverise the coarse 

flyash to convert the same into acceptable 

market product. Report covering detailed 

characterization of coarse flyash, technical 

concept of the proposed plan for grinding 

system and its capital cost was prepared. 

A diagnostic study was carried out to 

identify the causes attributing to severe 

corrosion problem in kiln shell. The 

samples of various input raw materials, fuel 

and product clinker as well as quality of 

water were characterised for deleterious 

components. The operational practices of 

the kiln and variation in operating and 

process parameters including shell 

temperature profile aggravating the 

corrosion problem were monitored. 

Remedial measures would be suggested to 

reduce the tendency of corrosion. 

Pre-feasibility study of using oily sand 

and bottom sludge from the refinery as 

supplementary fuel to coal in cement 

manufacture is being pursued. 

Energy audit studies were carried out 

in 6 cement plants covering 7 kiln streams. 

The specific recommendations towards 

energy conservation were formulated 

covering short, medium and long-term action 

plans. Potential savings ranging from 23 to 

70 kCal/kg clinker and 2.75 to 5.39 kWh/t 

cement were identified. The equivalent 

potential cost savings ranged between Rs. 

205 lakh to Rs. 895 lakh per annum. 

Studies related to implementation of 

Energy Conservation Act, 2001 in Indian 

cement industry under the aegis of Bureau 

of Energy Efficiency (BEE) are in progress. 

Hot Kiln Alignment and shell profile 

studies for five kilns were carried out. Also 

Compressed Air Audit was carried out for 

5 cement plants. The specific 

recommendations towards energy 

consumptions were given. Potential 

savings ranging from 20 KW to 230 KW 

were identified. 

Detailed Project Reports for capacity 

enhancement of three plants and setting 

up of a new clinkerisation unit of 5000 tpd 

capacity were prepared. The stress was on 

high operational and energy efficiency and 

low emissions. 

Techno Economic Feasibility studies 

for setting up a 2 million tonne per annum 

clinkerisation plant, a 2 lakh tonne per 

annum white cement plant, a 50 tonne 

104


per hour cement grinding unit and a 600 

tonne per day cement plant are in 

progress. 

3 Construction Development and 

Research 

The major achievements of the Centre 

are as follows: 

v Technical audit and quality 

assurance services for reconstruction 

of houses in Gujarat. 

v 

v 

Technical Audit/Quality Assurance 

for Retrofitting of Public buildings in 

Gujarat. 

Design, detailed engineering, project 

management and consultancy for 

reconstruction of schools in Gujarat. 

v 

v 

v 

v 

v 

v 

Mix Design for Roller-Compacted 

concrete for Concrete Dam. 

Structural Design check for concrete 

structures. 

In-situ testing of concrete structures 

for assessment of quality and distress 

evaluation for different projects. 

Studies on durability of concrete made 

with flyash based Portland pozzolana 

cements in comparison to concrete 

made with ordinary Portland cements. 

Third party quality audit/ checking 

for various constructions of Municipal 

Corporation of Delhi. 

Effect of higher SO 3 

content in cement 

on durability of concrete. 

v 

v 

Quality assurance services through 

Mobile Testing Laboratories for 

Rehabilitation of Minor Irrigation 

Tanks in Karnataka. 

Evaluation of concrete aggregates for 

alkali-aggregate reactivity and other 

properties for hydroelectric projects, 

thermal power plants and other 

projects. 

v 

v 

v 

Instrumentation and testing on 

demonstration stretches for concrete 

rural roads. 

Condition survey and periodical 

supervision for repair/ rehabilitation 

of concrete silos. 

Consultancy services for construction 

of auditorium buildings for HUDA. 

v 

v 

v 

Evaluation of chemical and mineral 

admixtures for concrete. 

Mix Designs of concrete for various 

types of mixes for different projects. 

Validation of concrete Mix Design for 

M80 Grade of Concrete. 

v Third Party Monitoring and 

Evaluation for Minor Irrigation and 

Lift Irrigation works in AP. 

4 Industrial Information Services 

An interactive bibliographic database 

of over 33,700 records is maintained for 

105


search by scientists and engineers, besides 

about 45,801 documents in the library. 

Library Automation System (Libsys) has 

been commissioned. 

NCB participated in Cement Expo 

2006 during 1-3 November 2006 in Mumbai 

and created awareness about NCB’s 

technologies and services to the industry. 

Internet has been streamlined and 

Intranet site has been kept updated. 

NCB newsletter (Quarterly) was 

brought out regularly. 

5 Continuing Education Services 

One long term course, 17 short term 

courses, nine Special Group Training 

Programmes, three Simulator-Based 

Courses, five Technology Awareness 

Programmes and five Contact Training 

Programmes have been completed. 

Fifteen short-term Training Courses, 

three Technology Awareness Programmes 

and three Simulator Based Courses are 

scheduled to be organised till 31 March 

2007. Also, a few more special programmes 

on different topics covering cement 

concrete and construction technology 

related areas and contact training 

programmes are expected to be organised 

upto 31 March 2007. 

6 Quality Management, Standards 

and Calibration Services 

v 

2064 vials of standard Reference 

Materials and 669 sets of standard 

Lime supplied upto 31 October 2006; 

2500 vials and 800 sets are likely to 

be supplied by 31 March 2007. 

v 850 equipment calibrated up to 30 

November 2006, 1300 equipment are 

likely to be calibrated by 31 March 

2007. Calibration facilities in the 

fields of Pressure, Thermal, 

Dimension and Revolution are 

accredited by NABL. 

v 

Assessment of testing laboratories for 

ten plants of a leading cement 

producing group. 

v Assistance for getting NABL 

accreditation is being provided for six 

plant Laboratories 

v 

v 

v 

v 

Documentation for 3 plants nearing 

completion. 

Quality Monitoring services for one 

cement plant completed. 

Assessment of two coal testing 

laboratories of two thermal power 

plants. 

Development of SRMs for Calibration 

of XRF for five plants 

Development Council for Cement 

Industry 

For the development of the Cement 

Industry, a Development Council for 

Cement Industry has been set up U/s 6 of 

the Industries (Development & Regulation) 

Act, 1951. The activities of Council are 

106


funded through Cess collected from the 

cement manufacturers in terms of the 

Cement Cess Rules, 1993. The Council 

promotes the development of the Cement 

Industry by providing funds for 

developmental projects in the following 

main areas: 

i. Base Level activities of NCCBM and 

R&D projects initiated by it for the 

development of the cement industry. 

ii. 

iii. 

iv. 

Projects for improvement of the 

productivity of the industry by 

reducing cost. 

Projects for optimum utilisation of 

raw materials. 

Projects for modernisation of cement 

plants. 

v. Projects for improvement of 

environment. 

vi. 

vii. 

viii. 

ix. 

Projects for standardisation and 

quality control Programmes. 

Projects for development of bulk 

supply and distribution of cement. 

Projects for training and upgradation 

of the skill of the personnel in the 

cement industry. 

Projects for development of National 

Data Bank and information Services. 

During 2006-07, the council received 

an allocation of Rs.3.50 crore for making 

expenditure on the above activities. During 

the year, it funded base level activities and 

4 R&D projects of NCCBM. 

The Council is headed by the 

President, Cement Manufacturers’ 

Association and has 24 members. Meetings 

to review the execution of projects funded 

through Cess fund are held periodically. 

The Council also deliberates upon issues 

related to development of Cement Industry. 

National Institute of Design, 

Ahmedabad 

The National Institute of Design (NID), 

Ahmedabad was set up in 1961 as an 

autonomous institution for design 

development, applied research, training, 

design consultancy services and outreach 

services. NID has been recognised as a 

Scientific and Industrial Research 

Organisation by the Department of Science 

& Technology, Government of India. NID is 

registered as a “Society” under the Societies 

Registration Act and as a “Public Trust” 

under the Bombay Public Trust Act and 

functions as an autonomous body under the 

aegis of this Department. 

The professional education 

programmes of the Institute operate 

through four main faculty streams and a 

common interdisciplinary stream namely 

the Industrial Design Faculty, 

Communication Design Faculty, Textile 

and Apparel Design Faculty, Exhibition 

Design Faculty and the Interdisciplinary 

Design Studies Faculty. 

Regular and continuing activities 

during the year 2006-07 are as under: 

107


Professional Education Programme 

The Institute offers Professional 

Educational Programmes resulting in 

Under-Graduate (UG) diploma (GDPD) (4- 

year programme) and at Post-Graduate (PG) 

diploma (PGDPD) (2-2½ year programme) in 

several design domain such as product 

design, textile design, furniture & interior 

design, ceramic & glass design, apparel 

design and merchandising, graphic design, 

animation design, film & video 

communication, exhibition design, new 

media, toy design & development, lifestyle 

accessory design, software & user interface 

design, information and digital design, 

strategic design management and 

transportation & automobile design. Two 

PGDPD programmes in (i) Retail Experience, 

and (ii) Digital Experience are proposed to 

commence from the academic year 2007-08 

from NID’s R&D Campus at Bangalore. The 

intake of UG students increased from 60 to 

75. Seventy-five candidates in GDPD and 152 

candidates in PGDPD joined the education 

programme in June 2006. As against 55 in 

2001, 73 in 2002, 83 in 2003, 88 in 2004 

and 128 in 2005, 222 students have been 

conferred diploma during 27th Annual 

Convocation held on 7th December 2006. 

Outreach Programmes 

The Institute conducts Outreach 

Programmes for crafts and other needy 

sectors in government and nongovernmental 

organizations for design 

intervention. The major intervention during 

2006-07 has been completing designing and 

publication of a national Directory, 

Handbook of Handicrafts. Some of the major 

programmes undertaken by Outreach 

Programmes during the year 2006-07 are: 

Design Intervention in Handloom Clusters 

in Tamil Nadu and Kerala, design 

intervention programmes in Leather for 

Central Leather Research Institute (CLRI) 

and in Jute for National Council for Jute 

Diversification (NCJD); Communication 

Campaign programme for Strategic 

Behaviour Change on Disability Prevention 

for Handicap International; setting up an 

International Centre for Indian Crafts 

Design at Ahmedabad; initiative for setting 

up an NID Centre/Campus at Shillong 

specifically meant for the North Eastern 

States; and setting up of Handicrafts Centre 

for Jharkhand Handicraft. 

Industry Programmes & Projects 

Industry Programmes & Projects are 

undertaken to meet specific requirements 

of Industry for design awareness and 

application. Short-term training 

programmes, workshops, seminars and 

design-clinics for product development are 

conducted at NID as well as in the field 

through NID’s Centres and Satellites at New 

Delhi, Bangalore, Hyderabad and Chennai. 

Industry Programmes and Projects 

undertaken/in progress/proposed during 

2006-07 include 29 On-Campus/Off- 

Campus/ International programmes 

covering 650 working professionals from 

different industry segments. 

Design Consultancy Service 

Under the Integrated Design Services 

umbrella, NID has stepped up its Design 

Consultancy Services to various industry 

108


segments, Government and Non- 

Government agencies. Major projects 

completed included design of Toll Plaza and 

Apparel for National Highways Authority 

of India, Modernization of District 

Industries Centres Baroda Centre, etc. 

Research and Publications 

Under Research and Design 

Development programmes, NID undertakes 

design development of products as well as 

projects to explore fresh areas for design 

application which can be later incorporated 

into training and design consultancy 

services. With Ford Foundation’s and 

Industry’s support, NID commenced 

Academic Research Chairs in the area of 

Textile & Apparel Design Technology and 

Product Innovation and Development of ITrelated 

Design Innovations, Application, 

Information and Digital Design, Software 

& User Interface Design, development of 

fonts for Indian scripts, Sustainable 

Transportation Design etc. are currently 

going on. Publication programmes aim at 

strengthening the design education 

resources and building knowledge base for 

the growing design service industry. During 

2006-07 several research monographs and 

publications have been planned. 

Integrated Design Services (IDS) 

NID services the design intervention 

needs of corporates, design awareness and 

intervention for specific industry segments, 

and socially relevant areas and consultancy 

requirements of industry and public sector 

organisations, through, (a) Outreach Design, 

(b) Industry Programmes and Projects, (c) 

Design Consultancy Services under the IDS 

Umbrella, in Faculties of Industrial Design, 

Communication Design and Textile and 

Apparel Design, including multidisciplinary 

projects. Certain projects are carefully 

selected to provide professional situations 

which serve to train students as well as to 

develop the faculty through exposure and 

experience. Earnings from such client service 

projects form part of NID’s non-plan 

expenditure budget. 

Significant Events 

i. An International Centre for Indian 

Crafts Design has been set up at NID 

Main Campus at Ahmedabad for 

research into crafts and culture as 

foundation of modern Industrial/ 

Communication design as well as 

training the craftsmen and artisans 

in various skill and methodology of 

crafts and also upgrading their 

competencies and market relevance. 

National Institute of Design, R&D Campus, 

Banglore 

ii. 

The two Academic Chair-holders 

(John Bissell Chair for Research in 

109


iii. 

iv 

Textile and Apparel Design 

Technology and OP Jindal Stainless 

Chair for Research in the area of 

Product Innovation) are currently 

continuing their research in 

respective areas. 

The Foundation Stone for the PG 

campus at Gandhinagar was laid on 

4 April 2006 by the Hon’ble Union 

Minister of Commerce & Industry, 

Shri Kamal Nath in the presence of 

Hon’ble Union Minister of Textiles, 

Shri Shankarsinh Vaghela and other 

dignitaries. 

The first Design Research and 

Development Campus of NID in 

Bangalore was formally inaugurated 

on 31 March 2006 and activities 

commenced. 

National Productivity Council 

The National Productivity Council 

(NPC) was established in 1958 as an 

autonomous body under the Societies 

Registration Act by the Government of 

India. At the apex level, NPC has its 

Council which is headed by the Union 

Minister of Commerce & Industry as its 

President and the Governing Body which 

is headed by the Secretary, Department of 

Industrial Policy & Promotion as its 

Chairman. It has a tripartite character, 

wherein Government, Industry and Labour 

are equally represented. 

The corporate office of NPC is at New 

Delhi. NPC has 13 Regional Professional 

Management Groups (RPMGs), located at 

important State capitals/industrial centres 

and one training institute namely Dr. 

Ambedkar Institute of Productivity (AIP) at 

Chennai. 

NPC undertakes management and 

technological consultancy, training and 

information services in various productivity 

subjects for the benefit of its clients. The 

specialised productivity functions dealt by 

NPC are process management, environment 

management, technology management, 

energy management, human resource 

management, agriculture and agri-business, 

information technology, etc. NPC also 

networks with over 20 Local Productivity 

Councils situated in the country to spread 

the message of productivity and 

dissemination at grass rootlevel. 

NPC is the implementing organisation 

for the Government of India for Programmes 

of Tokyo (Japan) based Asian Productivity 

Organisation (APO)–an inter-governmental 

body for promotion of productivity in the 

Asia-Pacific region of which the Government 

of India is a founder member. 

NPC’s Activities : Highlights 

During the period the major activities 

of NPC were in the following fields: 

Energy Management 

In partnership with the European 

Union, a project for capacity building of 

State Designated agencies under Energy 

Conservation Act, 2001 is being carried out 

on all India basis. Training Programmes on 

Energy Audit and Management are 

conducted for Institute of Productivity and 

Human Resource Development (IPHRD), 

110


Tehran, in which about 250 participants 

have been trained so far. 

Agri Business 

Evaluation by NPC of the Scheme of 

Precision Farming Development Centres 

under the Department of Horticulture, 

Ministry of Agriculture was carried out. 

Based on NPC’s evaluation, the Scheme has 

been enlarged manifold under microirrigation 

project. 

Process Management 

Assistance for ISO:9001-2000 

certification is being provided to a number 

of important institutions. Process 

Improvement study has been implemented 

for Director General – Supplies and 

Disposal (DGS&D) and Indian Trade 

Promotion Organisation (ITPO), New Delhi. 

Information Technology 

On behalf of the Department of 

Administrative Reforms & Public 

Grievances, NPC formulated and executed 

the ‘Scheme of e-Governance Award’ 

including the selection of the awardees. 

For the Department of Information 

Technology, the feasibility study for four- 

Mission Mode Projects (MMP), as part of 

National e-Governance Plan (NeGP) was 

carried out. 

Environment Management 

Emission and/or Discharge 

Standards on behalf of the Central 

Pollution Control Board are being 

formulated by NPC. Preparation of Detailed 

Project Reports (DPRs) on Municipal Solid 

Waste Management System for various 

Urban Local Bodies in more than 10 states, 

is being undertaken. 

International Programmes 

During the year, following 

international programmes have been 

conducted by NPC in association with the 

APO: 

l 

l 

l 

Workshop on “Productivity 

Improvement through 

Application of Knowledge 

Management for Rural Industry 

Development” from 3-7 July 

2006 at Hyderabad 

Symposium of “Intellectual 

Property Rights” from 26-29 

September 2006 at New Delhi 

Seminar on “Quality Management 

in Food processing and 

Small and Medium Enterprises 

with Special Focus on Meat 

processing” from 10-16 October 

2006 at Hyderabad 

l Seminar on “Commercial 

Dispute Processing” from 21-24 

November 2006 at New Delhi 

Quality Council of India 

The Quality Council of India (QCI) 

has been set up by Government of India 

as an autonomous body registered under 

the Societies Registration Act. The main 

objectives of QCI are to promote, guide 

and implement a national quality 

initiative for building confidence in 

Indian products and services and to 

improve competitiveness of Indian 

111


industry, raise quality consciousness in 

the country through National Quality 

Campaigns, establish National 

Accreditation Boards for (i) certifying 

products and quality management 

systems, (ii) registration of quality 

management personnel and training 

organizations, and (iii) Testing and 

Calibration Laboratories, encourage and 

facilitate development of third party 

certification facilities, testing, calibration 

facilities and laboratories, encourage 

industrial/applied research and 

development in the field of quality. 

Quality Council of India has 31 

members with equal representation from 

Government, industry and other 

stakeholders. 

National Accreditation Board for 

Certification Bodies (NABCB) 

The Board offers accreditation to the 

certification bodies for the Quality 

Management Systems (ISO 9000) and for 

the Environmental Management Systems 

(ISO 14000). The accreditations offered by 

NABCB are according to the international 

standards ISO/IEC Guide 62 for Quality 

Management Systems (QMS) and ISO/IEC 

Guide 66 for Environmental Management 

Systems (EMS). 

The Board is a member of 

International Accreditation Forum (IAF) 

and Pacific Accreditation Cooperation 

(PAC). IAF is an association of the 

accreditation bodies of different countries 

of the world and PAC is the association 

of the accreditation bodies of the Asia 

Pacific economies. Membership of these 

organizations has helped in achieving the 

status of Multilateral Arrangement (MLA) 

of mutual recognition of the 

accreditations granted by NABCB by 

other members of IAF & PAC who are 

signatories to the MLA. 

NABCB signed the MLA for Quality 

Management Systems with PAC in August 

2002 and with IAF in September 2002. 

NABCB operates in accordance with ISO/ 

IEC 17011:2004 and underwent a peer 

assessment in February 2006. The 

assessment covered the QMS and EMS 

accreditation schemes. 

The accreditation activities of NABCB 

have continued to grow and as on date, it 

has granted accreditation to 28 

Certification Bodies (CBs) for QMS and 10 

CBs for EMS. In addition, it has 

applications from 9 CBs for QMS, 7 CBs 

for EMS and 4 CBs for Food Safety 

Management Systems. 

The National Registration Board 

for Personnel and Training 

(NRBPT) 

NRBPT was established to offer 

registration services to auditors and 

training course providers in the conformity 

assessment area in line with international 

requirements for the benefit of the industry. 

With the growing needs of the industry for 

an effective mechanism of personnel and 

training verification in various sectors, 

NRBPT has been expanding its services to 

cater to this need of the industry. At present 

it is offering following registration services: 

112


Registration of Auditors 

l 

Quality Management Systems 

(QMS- ISO 9000) 

l 

Environment, Occupational 

Health & Safety (EHS) legislation 

Internal Auditor Training 

Course 

l 

Environmental Management 

Systems (EMS – ISO 14001) 

l 

Awareness Course : Laboratory 

Accreditation (17025), Hospital 

Accreditation (NABH standards) 

Registration of Consultants 

l 

l 

l 

l 

QMS 

EMS 

Occupational Health and Safety 

Hazard Analysis Critical Control 

System 

l Individual Consultants & 

Consultant Organizations for 

Hospitals (NABH) 

Registration of Training Courses 

l 

Lead Auditor Training Courses: 

Quality Management Systems 

(QMS-ISO 9000), Environmental 

Management Systems (EMS- ISO 

14001), Occupational Health & 

Safety Management Systems, 

Information Security Management 

Systems (ISO/IEC 27001), Food 

Safety Management systems 

(ISO/IEC 22000) 

l Internal Auditor Training 

Courses: Quality Management 

Systems (QMS-ISO 9000), 

Environmental Management 

Systems (EMS-ISO 14001), 

Laboratory Accreditation (ISO 

17025), Hospital Accreditation 

(NABH standards) 

l 

Diploma in Export Management 

(4 months) 

NRBPT is a member of International 

Personnel Certification Association (IPC) 

formerly International Auditor and 

Training Certification Association (IATCA). 

Director, NRBPT is on the Board of 

Directors of IPC and represents views of 

developing economies. 

NRBPT has a bilateral agreement 

with IRCA (International Register of 

Certificated Auditors, UK) wherein both 

the organisations cooperate by offering 

dual auditor training course certification 

and by accepting certificates from each 

other’s certified training courses for 

auditor certification. More than 140 

auditors are registered with NRBPT. In 

addition to this, 15 training courses and 

46 consultants are also registered with 

NRBPT for this year. 

The National Accreditation Board 

for Hospitals and Healthcare 

Providers (NABH) 

National Accreditation Board for 

Hospitals & Healthcare Providers (NABH) 

has been set up in year 2005-06 to 

establish and operate accreditation 

programme for healthcare organizations. 

113


The Board is structured to cater to the 

much desired needs of the consumers and 

to set benchmarks for progress of health 

industry. The Board while being supported 

by all stakeholders including industry, 

consumers and government, has full 

functional autonomy in its operation. 

Applications from 24 hospitals have 

been received and many more are in the 

process of making application. 

Two hospitals have been accredited 

in the month of October 2006, namely, B. 

M. Birla Heart and Research Centre, 

Kolkata and MIMS Hospital, Calicut. 

The National Accreditation Board 

for Testing and Calibration 

Laboratories (NABL) 

This Board was earlier operating as 

part of Department of Science and 

Technology. Since 1998 this Board has 

been registered as an autonomous body 

under Department of Science & 

Technology. In times to come, it would be 

a part of QCI as per the cabinet decision of 

February 1996 in regard to establishment 

of QCI. NABL offers accreditation to the 

Testing and Calibration Laboratories and 

Medical Laboratories in accordance with 

the international standard ISO/IEC 17025 

and ISO 15,189, respectively. 

NABL has signed the Mutual 

Recognition Arrangement (MRA) with Asia 

Pacific Laboratory Accreditation 

Cooperation (APLAC) and with 

International Laboratory Accreditation 

Cooperation (ILAC) in October/November 

2000. This MRA signing means that the 

test reports issued by the Laboratories 

accredited by NABL will be recognised by 

the countries signatories to the MRA. 

NABL has granted accreditation to the 

laboratories covering 641 disciplines in 

testing and 218 disciplines in calibration 

and maintains an effective surveillance 

system in accordance with the 

international standard to ensure that the 

accredited laboratories continue to 

demonstrate their compliance to ISO/IEC 

17025 and ISO 15189. 

Activities other than accreditation 

The other activities of Quality Council 

of India for spreading awareness and to 

provide unbiased information being carried 

out are as under. 

National Quality Campaign (NQC) 

The National Board for Quality 

Promotion (NBQP) spreads awareness on 

the need of quality of the products and 

services in the industry and consumers 

as part of the National Quality Campaign. 

The Campaign focuses on the industry 

and also looks at other key areas including 

health, education, public services etc. This 

has been mainly achieved by conducting 

various programmes with Council 

Members and other stakeholders like 

ASSOCHAM, CII, FICCI, BIS, STQC, ISI, 

NPL, Small Scale Industries Associations, 

etc. QCI over a period of time, has been 

able to establish effective networking with 

its members and other stakeholders, 

which helps ascertain the requirements 

114


of particular sectors, thereby making the 

programmes effective in their reach. A 

number of awareness programmes with 

various Institutions and Associations on 

the importance of Quality Management 

Systems, Environmental Management 

Systems, TQM Tools, Statistical tools etc 

were conducted. Safety being a matter of 

paramount concern in all industrial 

situations was also promoted through 

supporting seminars done by Safety and 

Quality Forum, Institution of Engineers. 

Four programmes were conducted in 

different regions which were attended by 

executives from around the country. New 

schemes of accreditation and registration 

of personnel and training courses, 

important constituents in the area of 

conformity assessment, are being 

regularly promoted through the print 

media and through presentations in the 

programmes jointly conducted with 

various organizations. A national level 

Quality Conclave is scheduled to be held 

in February, 2007. QCI has sponsored 

more than 8 training programmes 

conducted by STQC, ETDC, FICCI and CII. 

Quality Information and Enquiry 

Services (QIES) 

QCI provides responses to the queries 

received on the implementation of the 

quality and related standards either 

directly or through its website 

(www.qcin.org) . 

The quarterly newsletter “Crest” is 

being brought out regularly and the same 

has been very much appreciated by the 

industry. 26 issues of the Crest have been 

published till October 2006. 

115


10 

INTERNATIONAL COOPERATION AND 

UNIDO 

International Cooperation Division of 

this Department continued to make efforts 

to increase economic cooperation with the 

developing as well as developed countries 

for mutual benefits through different fora 

such as Joint Commissions/Joint 

Committees, other bilateral channels like 

interaction with the delegations visiting the 

country and organising visits abroad for 

discussions on issues of mutual interest 

The Minister of State for Industry, Dr Ashwani Kumar delivering the keynote address at the session 

on “India-A Design and Engineering and Manufacturing Destination: Advantage India” at the 3rd 

Indo-US Economic Summit, in New Delhi 

116


and business/investment meets between 

Indian and foreign entrepreneurs to 

stimulate foreign investment into India. 

This Division participated in discussions 

covering industrial cooperation organised 

by other Ministries and Departments of 

Government of India and participated in 

the Joint Business Council meetings. 

In view of the importance being 

attached to cooperation and technological 

interface among Small and Medium 

Enterprises (SMEs) at the global level, this 

Division proposed industrial cooperation 

agreements, business and trade meets, 

based on the potentialities and mutual 

complementaries for industrial and 

economic cooperation between various 

countries. 

This Division acts as the nodal point 

for the following Joint Commissions/Inter- 

Governmental Commissions. 

i. The Indo-Swedish Joint Commission 

for Economic, Industrial, Technical 

and Scientific Cooperation. 

ii. 

The Indo-Libyan Joint Commission 

for Economic, Industrial, Scientific 

and Technical cooperation. 

iii. The Indo-Hungarian Joint 

Commission for Economic, Scientific 

and Technical Cooperation. 

iv. 

The Indo-Belarus Joint Commission 

for Economic, Industrial, Scientific 

and Technical Cooperation. 

v. The Indo-Polish Joint Commission for 

Economic, Trade, Scientific and 

Technical Cooperation 

Commerce and Industry Minister is 

the Co-Chairman of these Joint 

Commissions. 

During the year 2006-07, following 

events have taken place 

The 3 rd session of the Indo-Belarus Joint 

Commission Meeting was held in Minsk, 

Belarus from 11-13 July, 2006. The Indian 

delegation was headed by Dr. Ashwani 

Kumar, Minister of State for Industry and 

the Belarusian delegation was headed by 

Mr. Anatoly Rusetski, Industry Minister of 

Belarus. A protocol aimed at strengthening 

the bilateral relations in the areas of trade, 

investment, culture, science & technology, 

healthcare, tourism, aviation, education, etc 

was signed at the end of the meeting. 


Promotion partnered with Government 

Agencies besides FICCI, CII, IIF and IITC 

on the following events: 

I. India Week, Poland, May 2006 

II. Made in India Show, China, 

September 2006 

III. 

IV. 

India Economic Summit, November 

2006 

India Arab World CEOs Summit, 

December 2006 

V. 5 th Manufacturing Summit, December 

2006 

117


VI. Partnership Summit, January 2007 

India Week Poland 

With the objective of further 

improving the India-Poland diplomatic 

relations, a 4-day long event India Week 

Poland 2006 was organised by the Indian 

Embassy, Poland, supported by the 


Promotion. 

The event included a business 

seminar, meeting of Indo-Polish Business 

Council, launch of the Indo-Polish 

Chamber of Commerce in Poland, 

organisation of a (i) textile/ fashion show, 

(ii) an Indian photographic/ tourism 

exhibition, and (iii) an Indian dance show 

and reception of journalists/ businessmen. 

Made in India Show, China 

In its continued efforts to promote 

exports and build a strong image of India 

overseas, the Confederation of Indian 

Industry, in association with Department 

of Industrial Policy and Promotion and 

Embassy of India, China, organized the 

4 th Made in India Show in China from 8-11 

September 2006 at Beijing, China. This 

event was organised as part of the India- 

China Friendship year 2006. 

The Made in India Show was a 

reflection of the growing technological 

The Union Minister for Commerce and Industry, Shri Kamal Nath and the Chinese Minister of 

Commerce, Mr. Bo Zilai exchanging signed documents in the presence of the Prime Minister, Dr 

Manmohan Singh and the President of the People’s Repubilc of China, Mr Hu Jintao, in New Delhi 

118


sensitivity among the industry in India and 

its ability to share its capability with the 

world, especially China. The exhibition 

helped India to present the willingness of 

Indian industrialists to accommodate the 

ever increasing specialised demand of 

China. 

Over 60 participants from a cross 

section of industries participated in the 

show. The exhibition showcased industry’s 

quality goods, services and technologies. 

The participants included public and 

private enterprises like – Suzlon Energy, 

Haldia Petrochemicals, Fashion 

Technology Park, NIIT, State Bank of India, 

TCS, WBIDS, Madhya Pradesh Laghu 

Udyog Nigam, BEML, NTPC among others 

-on one platform, and helped build 

industrial and trade partnerships and 

paved the way for opening new export / 

import markets for entrepreneurs. 

The show was inaugurated on 

8 th September 2006 jointly by the Vice 

Minister for Science & Technology, 

Government of China, Mr. Cheng Jin Pei 

and Minister of Science & Technology and 

Earth Sciences, Government of India, 

Mr. Kapil Sibal. 

Global Free Trade Zone Summit 

and Exhibition 

The Department part financed Global 

Free Trade Zone Exhibition and Summit – 

2006 organised by India International 

Trade Centre from 1-4 November 2006 at 

World Trade Centre, Mumbai. The 

exhibition focused on Free Trade Zones, 

The Union Minister for Commerce and Industry, Shri Kamal Nath addressing the Plenary Session of 

the India Economic Summit in New Delhi 

119


Export-Oriented Zones, Special Economic 

Zones, Information Technology Parks, 

Biotechnology Parks, Free Warehousing 

Zones, Industrial Parks and Research 

Parks, Investment Centres, Trade 

Exchanges, Knowledge Centre Parks, 

Media Cities, Free Port Zones, Clusters and 

various Product-Specific Free Zones. 

India Economic Summit 

The Department collaborated with CII 

and World Economic Forum as Summit 

Partner in organising the 22 nd India 

Economic Summit from 26-28 November 

2006 at New Delhi. The summit has been 

an effective platform to raise and debate 

issues, both from domestic and 

international perspective, in forming 

partnerships and in catalysing India’s 

Economic advancement. Over 600 

business and government leaders from 

India and abroad along with other key 

stakeholders participated to debate 

important issues relevant to the country’s 

growth agenda. This year’s edition of the 

India Economic Summit explored in depth 

the many facets of the country’s economy 

to identify the opportunities and challenges 

facing the business, apart from the new 

focus on the exciting opportunities offered 

by Indian States and the impact of global 

risks on the Indian economy. 

During the year, dignitaries from 

friendly countries and international 

agencies called on Hon’ble Commerce and 

Industry Minister, MOS (C&I) and Secretary 

(IPP) and held useful discussions on 

various areas of industrial cooperation. 

These include: 

v 

v 

v 

v 

v 

v 

v 

v 

v 

v 

v 

v 

v 

v 

v 

v 

Ms Collete Mathur, Director, World 

Economic Forum(WEF) 

Friends of India Group from 

European Union 

Mr. Sam Kutesa, Uganda Foreign 

Affairs Minister 

Mr. Rachid Talbi El, Morocco Minister 

of Economic Affairs 

Dr. Kinga Gonez, Hungarian Foreign 

Minister 

Mr. Dag Terje Andersan, Norway 

Minister 

Mr. Od Eriksan, Norway Minister of 

Trade and Industry 

Slovakia Minister for Economy 

Mr. David Malone, High Commissioner 

of Canada 

Mr. Deepak Obhroy, Parliamentary 

Secretary to Minister of Foreign 

Affairs of Canada 

Mr. Kaliopate Tavola, Fiji Minister for 

Foreign Affairs and External Trade 

Mr. Michael Johauns, Secretary US 

Department of Agriculture 

Mr.Ian Macfarlane, Australian 

Minister for Industry, Tourism and 

Resources 

Mr. Takumi Nemoto, Special Advisor 

to Prime Minister of Japan 

Mr. Ronaldo Somers, Leader, USIBC 

delegation 

Ms. Karien Van Gennip, Netherland 

Minister for Foreign Trade. 

120


United Nations Industrial 

Development Organisation 

(UNIDO) 

The United Nations Industrial 

Development Organization (UNIDO) based 

in Vienna, Austria was established in 1966. 

In 1985, UNIDO became a specialised 

agency of the United Nations to promote 

industrial development and cooperation at 

the global, regional, national and sectoral 

levels. India has been an active member of 

the Organization since its inception. 

Aims and Objectives 

UNIDO is committed to the promotion 

and industrialisation of the developing 

countries in order to ensure sustained 

socio-economic growth. In its role as a 

global forum, UNIDO generates and 

disseminates knowledge relating to 

industrial matters and provides a platform 

to the private sector, civil society 

organisations and the policy-making 

community in general to enhance 

cooperation, establish dialogue and develop 

partnerships. 

In pursuance of this goal and in 

response to the changing demands of the 

international community, UNIDO 

concentrates its work programme to 

achieve the following major development 

objectives which are of direct interest to 

the developing countries: 

v 

Equitable development through 

industrial development; 

v International cooperation in 

investment and technology; 

v 

Development of human resources for 

industry; and 

v Environmentally sustainable 

industrial development 

Organisation and its bodies 

The Organisation is headed by a 

Director General. The main policy making 

organs of the UNIDO are: 

v 

v 

v 

General Conference; 

Industrial Development Board; and 

Programme & Budget Committee. 

The General Conference consists of 

representatives of all 171 Member-States 

and holds a regular session every two years. 

The Industrial Development Board (IDB) 

comprises of 53 members of the 

Organisation elected by the General 

Conference, and has a term of four years. 

The Programme and Budget Committee 

(PBC) consists of 27 members of the 

Organisation elected by the General 

Conference for a period of two years. 

India’s Contribution 

v 

Industrial and technological growth 

and competitiveness; 

India, a founding member of UNIDO, 

is both a recipient and a contributor to its 

121


multifaceted industrial and cooperation 

programmes. India makes an annual 

contribution to UNIDO and for the year 2006- 

2007 it has been assessed @ 0.613 per cent 

(approximately Rs.3.0 crore) and also, a 

voluntary contribution of around Rs.6 crore 

each year to UNIDO’s Industrial Development 

Fund (IDF) which is mainly utilised for 

implementing UNIDO projects in India as well 

as extending technical assistance from India 

to other developing countries. 

The details of India’s voluntary 

contribution to UNIDO’s Industrial 

Development Fund are given in Table 10.1. 

Country Service Framework 

UNIDO has a Regional Office in New 

Delhi which also serves Bangladesh, Sri 

Lanka, Nepal, Bhutan and Maldives. A 

Country Service Framework (CSF) for 

UNIDO activities in India is presently in 

operation. CSF lays greater emphasis on 

time-bound preparation of projects, their 

evaluation and monitoring at regular 

intervals. It aims at synergising UNIDO’s 

activities along with other agencies and 

organisations working in India so as to 

ensure maximum development impact. 

The overall development goals of the 

Country Service Framework are poverty 

alleviation and environmental 

sustainability. CSF identifies the following 

four major components for operation; 

v 

v 

Strengthening the competitiveness of 

small and medium enterprises 

through technology-led interventions; 

Promoting foreign direct investment; 

v Promoting cleaner and 

environmentally friendly technologies 

and policies; and 

v 

Alleviating poverty and promoting 

industrial growth in less developed 

areas. 

The UNIDO-India CSF became 

operational from January 2002 for a 

Table 10.1 

(In US$ million) 

Year Special Purpose General Purpose Total 

2001-02 1.100 0.100 1.200 

(Rs.5,88,00,000) 

2002-03 1.100 0.100 1.200 

(Rs.5,88,00,000) 

2003-04 1.060 0.100 1.160 

(Rs.5,33,60,000) 

2004-05 1.440 0.100 1.540 

(Rs.6,70,29,850) 

2005-06 1.211 0.100 1.311 

(Rs.5,83,68,505) 

122


period of 5 years. The CSF was expected 

to ensure effective and efficient 

utilisation of resources in the 

implementation of UNIDO projects in 

India. During the period under report, 

an independent evaluation of the 

UNIDO-India CSF was conducted from 

2-20 November 2006. The UNIDO 

Representative in India was closely 

associated with the mission. This 

evaluation is expected to determine in a 

systematic and objective manner the 

relevance, efficiency, achievements and 

sustainability of the CSF. 

Specifically, the independent 

evaluation of the CSF in India is to enable 

the Government, UNIDO and the donors 

to: 

v Assess the efficiency of the 

implementation: quantity, quality, 

cost and timeliness of UNIDO and 

counterpart inputs and activities; 

v 

Assess the outputs produced and 

outcomes achieved as compared to 

those planned and to verify prospects 

for development impact and 

sustainability; and 

visits for detailed interaction with 

stakeholders. 

Projects/ Activities in India 

A number of projects have been taken 

up in India with the assistance from the 

voluntary contributions made to the 

Industrial Development Fund, bilateral and 

multilateral assistance through UNIDO, 

Montreal Protocol and Global Environment 

Facility (GEF) assistance. Presently, there 

are about 39 UNIDO programmes/projects 

going on in India with a total budget of 

around US$ 34 million. UNIDO has 

successfully implemented over 277 projects 

in India with a total budget of US$ 134 

million in the last four decades. 

Government of India and UNIDO have 

jointly set up International Centre for 

Advancement of Manufacturing Technology 

(ICAMT) at Bangalore to provide advanced 

manufacturing technologies to small and 

medium enterprises in developing countries 

and improve their competitiveness. 

v 

Provide an analytical basis and 

recommendations for the focus and 

(re) design for a possible continuation 

of the programme. 

A total of 15 projects have been 

identified for evaluation. The mission had 

meetings with key Governments / 

Departments/ Institutions and made field 

The village girls near Konark, Orissa are being 

trained on stone carving through a UNIDO cluster 

Development Project. 

123


v Inter-Regional Programme on 

Capacity Building for Transfer of 

Energy-Efficient and Eco-Friendly 

Technologies and Promotion of Local 

Investments in the areas of Materials 

Based on Local Resources for Low 

Cost Housing in Africa, Asia and Latin 

America; 

Women weavers at Chanderi in Madhya Pradesh 

are participating in the Literacy classes through 

UNIDO’s Cluster Development Programme. 

Some of the important projects 

approved are: 

v 

v 

v 

v 

Establishment of UNIDO South- 

South Centre for Industrial 

Cooperation. 

UNIDO Public Private Partnership 

Programme in the Automotive 

Component Sector; 

Market access and trade facilitation 

support for Asian Least Developed 

Countries (LDCs), through 

strengthening of institutional and 

National capacities related to 

Standards, Meterology, Testing and 

Quality (SMTQ); 

Towards Millenium Development 

Goals (MDG): A South-South 

response to Poverty Alleviation 

(facilitating new enterprises creation 

and enhancing competitiveness of 

SMEs in developing countries); 

v 

v 

v 

Consolidated Project for SME 

Development in India through 

Establishment of Mutual Credit 

Guarantee Schemes, Cluster 

Twinning and Foreign Investment and 

Technology Promotion; 

Promoting Energy efficiency in hand 

tool small scale sector; 

National Programme to Support Energy 

Efficiency Technologies and Quality 

Standards in Ceramics SSI Units. 

Guidelines for Preparation of 

UNIDO-Assisted Project Proposals 

and Recruitment of Staff for the 

UNIDO Projects/ Programmes in 

India 

In order to ensure the optimum 

benefits from the UNIDO-assisted projects 

in India, the Department has framed and 

issued guidelines for preparation of 

proposals for UNIDO-assisted projects/ 

programmes in India. The focus of UNIDO 

assistance would be on technology 

upgradation in the identified/ select 

industry sectors, where UNIDO has core 

competence. 

124


v Strengthening the competitiveness of 

small and medium enterprises 

through technology-led intervention; 

v Promoting foreign direct investment; 

v Promoting cleaner and environmentally 

friendly technologies; and 

v Alleviating poverty and promoting 

industrial growth in less developed 

areas with focus on employment 

generation. 

Guidelines include minimum cost of 

the project; cap of 50 per cent contribution 

from India’s IDF; cap of 30 per cent on 

soft component in the project; inclusion 

of staff requirement in the project 

document itself etc. 

Visit of Director General, UNIDO 

to India 

The new Director General, UNIDO, 

Dr. Kandeh K. Yumkella, immediately 

after assumption of office, made a visit 

to India in March 2006. During his visit 

he met the Prime Minister of India, 

Commerce and Industry Minister and the 

Deputy Chairman, Planning Commission. 

He also visited some of the UNIDO 

projects in Bangalore, dedicated hi-tech 

machines for R&D at Central Institute of 

Machine Tools, Bangalore and 

The Union Minister for Commerce and Industry, Shri Kamal Nath with Dr. Kandeh K. Yumkella, Director 

General, UNIDO at the launch ceremony of the UNIDO Centre for South-South Cooperation in New Delhi 

125


inaugurated the R&D Campus of National 

Institute of Design in Bangalore. 

India’s Participation in the UNIDO 

Meetings 

India has been actively participating 

in the important meetings organised by 

UNIDO. Two sessions of the Industrial 

Development Board and one session of 

Programme and Budget Committee of 

UNIDO were held in the year 2006. During 

the period under report, UNIDO has 

celebrated its 40th Anniversary on 28 

November, 2006. Secretary (IPP) 

participated in the panel discussions of this 

event and also the 32nd Session of 

Industrial Development Board on 29th 

November 2006. 

Launch of UNIDO Centre for South- 

South Industrial Cooperation 

The UNIDO Centre for South-South 

Industrial Cooperation, a first of its kind in 

the world, was launched in New Delhi on 15 

February 2007 by the Hon’ble Minister of 

Commerce and Industry and the Director 

General, UNIDO. The proposed Centre will 

act as a platform for facilitating investment 

and manufacturing trade partnership among 

developing countries and to map the potential 

for and operational modalities of industrially 

more developed countries with benefit 

accruing to other developing countries in 

general and least developed countries in 

particular in a mutually advantageous 

partnership framework. 

126


11 

REPRESENTATION OF SCHEDULED CASTES/ 

SCHEDULED TRIBES/OBCS/EX-SERVICEMEN AND 

PHYSICALLY DISABLED PERSONS IN SERVICE 

Representation of Scheduled 

Castes/Scheduled Tribes/OBCs 

In order to ensure implementation of 

the instructions issued from time to time 

relating to reservations for SCs/STs/OBCs 

in Government service, a SC/ST Cell has 

been created in the Department under a 

Liaison Officer of the rank of Director. The 

Cell is entrusted with the job of monitoring 

the implementation of the instructions of 

the Government on the reservation of SC/ 

STs in the Department and in various 

attached/subordinate offices, inspection of 

reservation rosters, ensuring submission 

of regular returns to the Department of 

Personnel & Training, examining the dereservation 

proposals of reserved 

vacancies, submission of information to 

National Commission for Scheduled 

Castes/Scheduled Tribes and looking into 

grievances of SC/ST employees. 

The Department also issues periodic 

directions to the administrative sections as 

well as the appointing authorities under 

its control to ensure proper implementation 

of the directives on reservation for members 

of the Scheduled Castes/Scheduled 

Tribes/OBCs/Ex-servicemen and 

Physically Disabled Persons. This 

Department is also taking measures to give 

special consideration to minorities in 

recruitment under Prime Minister’s new 

15-Point Programme for the welfare of 

minorities. 

Representation of Persons with 

Disabilities in Services 


Promotion has been making vigorous 

efforts to implement the provisions of 

“Persons with Disabilities Act, 1995” in 

order to ensure reservation for physically 

handicapped persons. 

The break up of number of persons with 

disabilities and ex-servicemen working in the 


and its attached/subordinate offices and 

autonomous bodies is given in Table 11.1 

Table 11.1 

S.No. Category Sanctioned No. of Physically No. of 

of Post strength Handicapped Persons Ex-Servicemen 

1. A 1169 4 – 

2. B 860 6 5 

3. C 1873 39 27 

4. D 1143 25 12 

127

12WOMEN WELFARE ACTIVITIES 


The principle of gender equality is 

enshrined in the Indian Constitution in its 

Preamble, Fundamental Duties and 

Directive Principles. The Constitution not 

only grants equality to women, but also 

empowers the State to adopt measures of 

positive discrimination in favour of women. 

Within the framework of a democratic polity, 

our laws, developmental policies, plans and 

programmes have aimed at advancement of 

women in different spheres. 

In consonance with the guidelines of 

the Supreme Court and the code of conduct 

drafted by the National Commission for 

Women, the Department has a Complaints 

Committee headed by a senior lady officer. 

The constitution and objectives of the 

Complaints Committee have been 

intimated to all sections in this 

Department. All the attached/subordinate 

offices and autonomous organisations 

under the Department have also such 

committees for ensuring prompt action on 

any complaint of sexual harassment at 

work place. 

The Department follows all the 

guidelines of the Government in this matter 

and all possible efforts have been made to 

create healthy and congenial atmosphere 

so that women employees can perform their 

duties with honour, dignity and without 

fear. A meeting of the Complaints 

Committee in the Department was held in 

October 2006 wherein it was decided that 

the members of the Committee would 

remain vigilant in their respective 

Departments/Offices and provide all 

possible assistance to women employees 

and may bring such cases to the notice of 

the Committee, if any. The suggestions 

from women employees are also invited 

from time to time for improvement in their 

working conditions. 

128


13USE OF OFFICIAL LANGUAGE 

Hindi in Devnagari script is the 

Official Language of the Union of India and 

the Government’s policy aims at 

progressive use of Hindi in official work. 

Effective steps were taken during the year 

in the Department of Industrial Policy and 

Promotion to ensure compliance of the 

Official Language Policy of the Government, 

as also to implement the Annual 

Programme issued by the Department of 

Official Language and comply with the 

orders of the President on 

recommendations of the Committee of 

Parliament on Official Language. 

Consequently, there has been constant 

progress in use of Official Language in 

official work in the Department. 

Compliance of Section 3(3) of the 

Official Language Act, 1963 

All documents, such as resolutions, 

general orders, rules, licenses falling 

under Section 3(3) of the Official 

Language Act, and all papers laid on the 

Table of the Houses of Parliament were 

issued bilingually, i.e., in Hindi and 

English. 

Replies to Hindi Letters 

All letters received in Hindi were 

replied to in Hindi. 

Correspondence in Hindi 

Letters to State Governments, Union 

Territories and their offices as well as the 

offices of the Central Government, located 

in region ‘A’ and ‘B’ were issued in Hindi to 

the extent possible. Similarly, efforts were 

also made to send letters in Hindi to Central 

Government offices located in region ‘C’ as 

per targets laid down in the Annual 

Programme. 61 per cent, 51 per cent and 34 

per cent of correspondence was done in Hindi 

with Region ‘A’, ’B’ and ‘C’, respectively, 

during the year (upto December 2006). 

Sections Specified for Working in 

Hindi 

Out of a total of 53 sections in the 

Department notified for doing cent per cent 

work in Hindi, 17 are carrying out this 

mandate satisfactorily. 

129


Monitoring and Inspections 

In order to ensure compliance of the 

Official Language Policy, monitoring is done 

through review of quarterly progress reports 

in the meetings of the Official Language 

Implementation Committee. During the 

year, 35 Sections in the Department and 

the Offices located in Kolkata, Guwahati, 

Bangalore, Cochin, Chennai, Hyderabad, 

Asansol, Nagpur, Bhandara, Hazari Bagh, 

Saharanpur and Bhopal have been 

inspected with a view to ensure the 

progressive use of Hindi and compliance of 

Official Language Policy of the Government. 

Hindi Training 

Priority is being given to the work of 

imparting training in Hindi in the 

Department. A large number of officials of 

the Department have already been trained 

in Hindi typing and Hindi stenography. In 

order to impart training immediately to the 

remaining employees, an action plan has 

been formulated. The facility of providing 

training in Hindi, including typing and 

shorthand under Hindi Teaching Scheme is 

available in Udyog Bhawan premises itself. 

Mechanical Aids 

As per provisions of the Official 

Language Act, bilingual mechanical facilities 

have been provided on mechanical 

equipments in the Department. Facility to 

work in Hindi is available on 160 computers. 

Hindi Advisory Committee 

To review the use of Hindi in the 

Department and to advise on progressive 

use of Hindi, a Hindi Advisory Committee 

exists in the Department. Term of this 

Committee lapsed on 31.8.2003. The 

reconstitution of new committee is under 

process. 

A departmental Official Language 

Implementation Committee under the 

chairmanship of Joint Secretary (in-charge, 

Hindi) in the Department has already been 

constituted. Meetings of this committee 

were held regularly in every quarter and 

important decisions were taken regarding 

use of Hindi in official work. Necessary 

follow-up action was also taken to ensure 

compliance to these decisions. 

Hindi Fortnight 

“Hindi Fortnight” was celebrated in 

the Department from 14 to 28 September 

2006. 

Messages of the Hon’ble Home 

Minister, Cabinet Secretary and Secretary 

(IPP) were circulated to the officers/ 

employees in the Department and to the 

attached and subordinate offices under the 

Department, for information and 

compliance. 

During the Hindi Fortnight, 

celebrations, competitions in Hindi typing, 

essay writing, noting and drafting etc. were 

held. Seven competitions in Hindi were 

organized during this period to encourage 

and motivate the employees for doing their 

official work in Hindi. A large number of 

officers and employees participated in these 

Competitions with great enthusiasm. Prize 

distribution ceremony was organised on 

130


24 November 2006 and 73 Prizes were 

distributed to the winners of competitions. 

Use of Hindi in Attached and 


There are three attached and two 

subordinate offices under the Department. 

The attached offices are: Office of the 

Economic Adviser, Udyog Bhawan; Tariff 

Commission, New Delhi and Office of the 

Salt Commissioner, Jaipur. The 

subordinate offices are Petroleum & 

Explosive Safety Organisation, Nagpur and 

Controller General of Patents, Designs and 

Trade Marks, Trade Mark Registry, 

Mumbai. In Addiion to these attached and 

Subordinate Offices there are eight 

organisations in the Department. 

The progress in the use of Official 

Language in these offices is reviewed 

through the quarterly progress reports 

submitted by them to this Department at 

the end of each quarter. With a view to 

ensure use of Hindi and compliance of the 

official language policy, timely inspections 

have been carried out. To accelerate the 

pace of use of Hindi, necessary 

instructions issued by Department of 

Official Language were also circulated to 

these offices. 

The attached and subordinate offices 

continued their endeavour towards 

ensuring effective implementation of 

various provisions of Official Language Act 

and Rules to promote and progressively 

propagate the use of official Language in 

their day-to-day working. Their 

correspondences in Hindi with offices 

located in ‘A’, ‘B’ and ‘C’ regions were found 

to be satisfactory. 

Like previous years, this year also a 

Hindi Week/Pakhwara (Fortnight) was 

organised during the month of September 

2006 in all the aforesaid offices. Wideranging 

Competitions encompassing 

noting, drafting, dictation, typing etc. were 

organised during the week/fortnight. 

Winners were awarded prizes. 

131


14VIGILANCE ACTIVITIES 

The Vigilance Unit of the Department 

is headed by a Chief Vigilance Officer (CVO) 

of the rank of Joint Secretary who is 

appointed on the advice of the Central 

Vigilance Commission. The Chief Vigilance 

Officer is the nodal point in the vigilance 

set up of the Department and is entrusted 

with the following responsibilities: 

v 

v 

v 

v 

Identification of sensitive areas prone 

to malpractices and taking preventive 

measures to ensure integrity and 

efficiency in the functioning of the 

Department; 

Taking suitable action to achieve the 

targets fixed by the Department of 

Personnel and Training on anticorruption 

measures; 

Scrutiny of complaints and initiation 

of appropriate investigation 

measures; 

Inspection and follow-up action on 

the same; 

v Furnishing comments of the 

Department to the Central Vigilance 

v 

Commission on the investigation 

reports of the Central Bureau of 

Investigation; 

Taking appropriate action in respect 

of departmental proceedings. 

There is no full time Chief Vigilance 

Officer for attached and subordinate 

offices as these are small organisations. 

Vigilance activities of these offices are 

being looked after by their Divisional 

Heads. The overall responsibility of 

vigilance activities of these offices, 

however, rests with the Chief Vigilance 

Officer of the Department of Industrial 

Policy and Promotion. 

Preventive vigilance continues to 

receive priority attention with primary 

emphasis on identification of areas 

sensitive or prone to malpractices and 

temptation. The guidelines/instructions 

issued from time to time by the Department 

of Personnel and Training and Central 

Vigilance Commission in this regard are 

followed. Action taken includes the 

following: 

132


i. The areas of sensitive nature have 

been identified in the Department and 

surveillance is kept thereon. 

ii. 

iii. 

Regular and surprise inspections to 

check security have been carried out 

in the Department throughout the 

year. Security measures have been 

strengthened appropriately. 

Steps to put an end to the practice of 

professional liaison-man approaching 

various officers in the Department 

have been taken and a fresh list of 

iv. 

unwanted liaison-man has been 

prepared. 

Vigilance Awareness Week was 

observed from 6.11.2006 to 

10.11.2006 to create awareness 

amongst officers and staff. 

During the year 2006-07, in all 

eighteen complaints were received in the 

Department upto 30th December 2006. Of 

these, six complaints were disposed of. 

Remaining twelve complaints were under 

investigation/examination. 

133

15 

GENDER 

BUDGETING 



and Promotion initiated the exercise of 

Gender Budgeting in 2006, in order to 

advocate for, and support the 

engendering of economic governance with 

the interior objective to increase and 

highlight participation of women. A 

gender analysis was undertaken in this 

financial year also to enhance the 

outcomes of critical programmes to 

ensure accountability and transparency 

so as to promote equity in Government 

policy and implementation. Apart from 

making its policy commitments to 

women, through this initiative, the 

Department also aims for a more peopleoriented 

development strategy and 

equitable allocation of resources. 

An analysis of the budgetary 

allocations has been done through a gender 

perspective so as to translate gender 

commitments into budgetary 

commitments. This, in turn, is hoped, to 

ensure effective targeting of public 

spending and improve the access of 

women to national resources. 

Accordingly, the Schemes and 

Programmes of the Department of 

Industrial Policy and Promotion were 

analysed from the gender perspective by 

dividing them into the following three 

categories: 

i. Women-centric programmes/ 

schemes and pro-women allocation; 

ii. 

iii. 

Schemes/programmes that have a 

significant (over 30 %) allocation for 

women; and 

Schemes/programmes that cannot 

have gender-sensitive elements. 

The Schemes being implemented by 

the Department, can be categorized 

broadly into: Subsidy Schemes; Schemes 

for Strengthening Industrial 

Infrastructure and Technology 

Upgradation; and Special Package for 

North East and and other States. These 

are schemes which fall into the third 

category, as by their very nature, they are 

gender neutral. 

134


16 

CITIZENS’ 

CHARTER 

Mission Statement 

v 

We shall work consciously and 

dedicatedly for positioning India 

amongst the top industrial countries 

of the world in a relatively shorter time 

frame. 

v We shall create enormous 

opportunities for investment in 

sustainable industrial activities and 

open up employment avenues for 

enhancing the quality of life of the 

common man. 

v 

We shall achieve excellence in 

formulating balanced industrial 

policies and expeditiously implement 

them for the maximum good of the 

people of India. Our guiding 

principles in realising these lofty goals 

will be through judicious resource 

utilisation, improvement in 

productivity, dispersal of industries, 

development of backward areas, and 

more importantly, blossoming of 

entrepreneurial talents. 

Our Values 

We shall consciously and diligently 

uphold the values of integrity, transparency 

and accountability in our day-to-day public 

dealings. 

To add value to our services and to 

pace up the process of decision-making and 

its timely implementation, we shall adopt 

modern management systems and 

practices. 

Our Commitment 

While discharging our duty, we shall: 

v Continuously consult the 

stakeholders and other interest 

groups in reviewing the policies and 

procedures to reflect their views, 

perceptions and concerns on the 

policy document. 

v 

Consider the stakeholders and 

interest groups as partner in progress 

and accord them respect and 

cordiality, encourage them to come 

135


v 

v 

out with innovative concepts and 

procedures to provide for crossfertilisation 

of ideas that help overall 

promotion of industrial development. 

Endeavour to create more effective 

channels of communication and 

forums for interface with the 

stakeholders and other interests 

groups through e-governance, which 

require large-scale computerisation 

and automation in our functioning. 

Maintain the confidentiality of the 

personal and business information 

disclosed to us. 

In the event of an inevitable delay due 

to technical reasons or matter being sub 

judice, the reasons for the delay shall be 

communicated. 

Standards for Industrial Approval 

To facilitate speedy industrial 

approvals, we shall: 

v 

Continue to acknowledge on-the-spot 

the applications for Industrial 

Entrepreneurs’ Memorandum/ 

Industrial License/Foreign 

Collaborations. 

v 

Stand committed to simplifying 

procedures for industrial approvals 

and keep only minimum controls that 

are considered critically essential. 

v 

Take a decision within 14 working 

days on the receipt of a completed 

application under automatic route for 

foreign collaborations. 

v 

Place in the public domain all changes 

in law and procedures through 

appropriate media channels as and 

when they are finalized. 

Standards for General Procedures 

Our guiding principles will be: Quick 

disposal of cases and redressal of 

grievances. 

Towards this, we shall: 

Continue to issue on-the-spot written 

acknowledgments to all queries and 

applications. 

Respond to all queries within 15 

working days of receipt of the enquiry. 

v 

v 

v 

Continue to decide on applications for 

Letters of Intent/Industrial License, 

foreign collaboration and investment 

within six weeks from the receipt of 

the completed applications. 

Issue duty concession/project import 

facilities within four weeks from the 

receipt of the completed applications. 

Forward our recommendations to 

other departments/ministries within 

four weeks from the receipt of 

completed requests/applications 

from the concerned Department, 

applicant or redress-seeker, wherever 

the disposal of case requires our 

recommendation. 

136


v 

Provide an opportunity for personal 

hearing, with an officer of appropriate 

rank in the Department in case it is 

necessary. 

Continue to inform the applicant / 

petitioner the reasons for the rejection of 

their applications and provide opportunity 

for appeal. 

Responsibilities of the Users 

To serve our stakeholders in a resultoriented 

manner, we will create structures 

for regular two-way communication to 

assess their problems and to evolve quick 

solutions. Towards this, we urge industrial 

units to send monthly production returns 

regularly to facilitate national planning of 

industrial activities. 

Other information like status of 

implementation of their project till it 

commences production and suggestions for 

improvement of services are also equally 

important. These valuable feedbacks from 

the stakeholders and other interest groups 

will help us to take timely action and move 

up in the service value chain. 

Service audit 

We shall periodically audit the quality 

of our services based on stringent 

benchmarks and standards set, both at the 

unit and national levels. We will also hold 

independent surveys to capture the 

stakeholders’ perceptions and assessment 

of the quality of our services. The results 

of these surveys will be placed in the public 

domain. 

Helpline 

Please visit our Information and 

Facilitation Counter (IFC) or the Public 

Relation Office, at Udyog Bhavan, New 

Delhi, Department of Industrial Policy and 

Promotion, Ministry of Commerce and 

Industry (Near Gate No. 11 Tel 011- 

23063088). Receipt of all applications can 

be obtained from the IFC office. 

Our Cell for Investment Promotion 

and Infrastructure Development will 

provide information, guidance and escort 

services on investment promotion and 

infrastructure development. 

Printed publications of the 

Department can be obtained from the 

outlets of the Controller of Publications. 

Please also visit our website (http:// 

dipp.nic.in) for the latest information 

through which the Proforma for making 

applications for IEM, LOI, foreign 

collaboration etc. can also be downloaded. 

Grievance Redressal 

We attach great importance to 

redressal of grievances of the stakeholders 

for the overall promotion of industrial 

development. Therefore, a demanding time 

frame for quick disposal of your ‘wish list’ 

has been laid down. That includes 

resolving the issues within 14 working 

days of its receipt. In case of inevitable 

delay, the reasons for the delay, the time 

required for redressal of the complaint etc. 

will be intimated to the complainant. 

Your ‘wish list’ can be sent to us over 

the phone, by mail, fax or upon personal 

137


visit. Your first contact point is IFC. You 

can approach the Grievance Officer in the 

Department (Shri N.N. Prasad, Joint 

Secretary, Tel No. 23061714, E-Mail: 

nareshnp@ub.nic.in) if the issue is not 

resolved at the IFC. 

Additional Secretary and Financial 

Adviser in the Ministry of Commerce and 

Industry has been appointed as the 

Business Ombudsman to look into the 

complaints relating to delays in clearance 

of projects/approvals. 

138


USEFUL ADDRESSES 

DESIGNATION 

ADDRESSES 

Public Relations Entrepreneurship 

Officer Assistance Unit, Tel: 011-23063088 

Near Gate No. 11, EPABX: 011-23063321 

Udyog Bhavan Extn. 2237 

New Delhi 

Grievance Officer Department of Industrial Tel: 011-23061714 

and Policy & Promotion, Fax: 011-23063656 

Joint Secretary Ministry of Commerce & E-mail:nareshnp@ub.nic.in 

Industry, Room No. 126-A 

Udyog Bhavan, 

New Delhi 

Business Department of Industrial Tel: 011-23062756 

Ombudsperson’ and Policy & Promotion, Fax: 011-230662101 

Additional Secretary & Ministry of Commerce & E-mail: n.gokulram@ub.nic.in 

Financial Adviser Industry, Room No. 244, 

Udyog Bhavan, New Delhi 

Visit Website of the Department 

www.dipp.nic.in 

139


ANNEXURE 

MOST RECENT OBSERVATION OF C&AG PARAS IN RESPECT OF 

DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION 

There is no most recent and important audit observation pending against 

C&AG, Department of Industrial Policy & Promotion. 

140


ORGANISATIONAL CHART OF THE DEPARTMENT OF 

INDUSTRIAL POLICY & PROMOTION 

APPENDIX - I 

141


APPENDIX - II 

OFFICES / ORGANISATIONS UNDER THE DEPARTMENT OF 

INDUSTRIAL POLICY AND PROMOTION, NEW DELHI 

Attached Offices 

1. Office of the Salt Commissioner, Jaipur 

2. Office of the Economic Adviser, New Delhi 

3. The Tariff Commission, New Delhi 


1. Petroleum & Explosives Safety Organisation, Nagpur 

2. Office of the Controller General of Patents, Designs and Trade Marks, Mumbai 

Other Organisations / Grantee Institutions 

1. Central Manufacturing Technology Institute, Bangalore. 

2. Central Pulp & Paper Research Institute, Saharanpur 

3. Indian Rubber Manufacturers Research Association, Thane 

4. National Council for Cement & Building Material, Ballabgarh 

5. National Institute of Design, Ahmedabad 

6. National Manufacturing Competitiveness Council (NMCC), New Delhi 

7. National Productivity Council, New Delhi 

8. Quality Council of India, New Delhi 

142


APPENDIX – III 

LIST OF INDUSTRIES RESERVED FOR THE PUBLIC SECTOR 

1. Atomic energy. 

2. The substances specified in the schedule to the Notification No. S.O. 212(E), dated 

the 15th March 1995 of the Department of Atomic Energy, Government of India. 

3. Railway transport. 

LIST OF INDUSTRIES FOR WHICH INDUSTRIAL 

LIECENSING IS COMPULSORY 

APPENDIX - IV 

1. Distillation and brewing of alcoholic drinks. 

2. Cigars and cigarettes of tobacco and manufactured tobacco substitutes. 

3. Electronic Aerospace and defence equipment: all types. 

4. Industrial explosives including detonating fuses, safety fuses, gun powder, 

nitrocellulose and matches. 

5. Specified hazardous chemicals i.e. (i) Hydrocyanic acid and its derivatives, 

(ii) Phosgene and its derivatives, and (iii) Isocyanates & di-isocyanates of 

hydrocarbon, not elsewhere specified ( example, Methyl isocyanate). 

143


APPENDIX–V 

YEARWISE AND STATEWISE DISTRIBUTION OF IEMs FILED 

TILL 31.12.2006 

Aug 91 to Jan01 to Jan02 to Jan 03 to Jan 04 to Jan 05 to Jan06 to 

Dec 00 Dec 01 Dec02 Dec 03 Dec 04 Dec 05 Dec 06 

State/UT Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv 

(Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) 

ANDHRA PRADESH 2646 59045 246 46422 286 9189 250 16298 370 12116 412 15391 601 43455 

ARUNACHAL PRADESH 3 40 1 27 5 85 6 68 3 28 10 49 6 130 

ASSAM 108 3596 71 1413 48 246 46 410 58 207 79 977 50 1969 

BIHAR 130 2983 7 23 1 0 2 5 13 99 12 410 79 8580 

CHHATTISGARH 475 24002 45 2268 73 10605 198 13614 404 38638 284 41832 217 107899 

DELHI 460 6450 0 0 9 39 7 2 9 30 5 13 8 129 

GOA 357 5028 60 1058 48 643 30 395 26 197 46 351 24 300 

GUJARAT 5464 146458 279 11033 293 10308 395 22781 547 28475 750 79548 568 66109 

HARYANA 2512 27691 140 742 204 866 148 1009 221 8998 209 5863 237 16269 

HIMACHAL PRADESH 381 8466 25 446 15 443 52 928 95 1855 119 3235 106 2103 

JAMMU & KASHMIR 76 591 6 141 49 349 64 1083 90 1596 150 2677 93 2197 

JHARKHAND 312 10367 14 63 16 284 49 1296 88 10258 179 28415 98 33649 

KARNATAKA 1514 39679 174 4080 154 2150 169 6508 200 17991 244 13813 312 71813 

KERALA 426 7462 26 497 11 31 20 224 22 184 31 553 43 470 

MADHYA PRADESH 1812 39855 81 761 61 1197 71 1273 109 7584 171 19212 186 10971 

MAHARASHTRA 8337 197903 633 7522 653 24051 635 6174 687 9091 724 20274 861 38122 

MANIPUR 0 0 0 0 1 3 0 0 1 0 1 7 0 0 

MEGHALAYA 36 372 49 331 35 731 34 211 23 74 37 458 17 1482 

NAGALAND 5 158 1 49 1 1 2 16010 4 26 0 0 0 0 

ORISSA 289 20125 39 1289 39 1971 142 12984 220 42368 208 41838 107 69409 

PUNJAB 1968 36963 86 1226 85 10748 91 1278 132 3805 177 5098 189 10536 

RAJASTHAN 2113 35173 107 2253 121 1905 147 739 174 1690 171 5406 181 7496 

SIKKIM 11 28 0 0 0 0 2 18 3 209 7 75 11 1331 

TAMIL NADU 3631 54564 225 1948 201 2585 232 1895 341 54380 534 8782 724 19522 

TRIPURA 5 1041 9 789 6 49 4 4 4 159 3 92 0 0 

UTTAR PRADESH 3702 63693 230 2222 240 1743 254 1997 425 14234 690 33332 560 38811 

UTTARAKHAND 265 5047 21 553 19 314 110 946 166 2663 343 5209 467 13756 

WEST BENGAL 1816 30094 203 1587 294 7862 426 7244 441 7621 412 18512 295 15261 

ANDAMAN & NICOBAR 9 332 0 0 0 0 0 0 0 0 0 0 1 30 

CHANDIGARH 30 433 7 25 0 0 0 0 2 1 0 0 5 234 

DADRA & NAGAR HAVELI 1255 17434 112 2109 118 2024 176 2625 139 1995 77 1216 110 3967 

DAMAN & DIU 586 3726 44 151 51 294 70 372 58 304 77 905 51 1431 

LAKSHADWEEP 1 4 0 0 0 0 0 0 0 0 0 0 0 0 

PONDICHERY 424 5905 40 206 35 575 43 221 43 193 41 413 53 840 

TOTAL 41159 854708 2981 91234 3172 91291 3875 118612 5118 267069 6203 353956 6260 588271 

144


APPENDIX–VI 

YEARWISE SCHEDULED INDUSTRYWISE DISTRIBUTION OF IEMs 

FILED TILL 31.12.2006 

Aug 91 to Jan01 to Jan02 to Jan 03 to Jan 04 to Jan 05 to Jan06 to 

Dec 00 Dec 01 Dec02 Dec 03 Dec 04 Dec 05 Dec 06 

Schedulded Industry Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv Nos Prop.Inv 

(Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) 

Metallurgical Industries 6487 139016 326 4601 349 15574 755 27196 1262 87060 1247 101730 841 144128 

Fuels 226 15653 19 41257 27 22785 34 10853 36 56695 58 25432 32 23782 

Boilers&Steam Gen.Plants 3 28 0 0 1 0 2 6 3 66 1 7 8 342 

Prime Movers 518 5780 52 151 70 782 47 351 108 1758 139 5138 170 3766 

Electrical Equipments 2562 44386 193 5399 153 5392 243 25166 317 41827 384 75466 366 150844 

Telecommunications 1116 28889 22 355 45 429 19 76 44 1903 34 1181 56 2975 

Transportation Industry 619 20330 29 479 26 280 54 2065 86 1243 75 2059 123 10688 

Industrial Machinery 974 15197 84 780 67 2895 59 453 104 1713 152 1803 142 1662 

Machine Tools 148 1376 11 233 16 60 9 22 4 9 10 54 12 95 

Agricultural Machinery 54 1754 6 35 11 539 6 193 3 262 18 105 18 850 

Earth Moving Machinery 56 1072 2 0 0 0 0 0 2 2 6 64 6 90 

Misc.Mechanical & Engg.Ind 956 14665 122 662 160 1963 189 939 234 2580 279 3265 284 4531 

Comm/Office/Hhold equpts 212 3599 6 507 5 6 11 313 15 44 13 133 12 45 

Medical and Surgical Inst 25 519 5 38 8 9 6 39 11 23 12 48 7 15 

Industrial Instruments 29 117 1 0 0 0 1 0 6 79 1 14 3 5 

Scientific Instruments 260 3816 11 308 8 17 14 105 10 49 10 62 10 7 

Math,Survey,Drawing Inst. 4 4 0 0 0 0 0 0 1 110 0 0 0 0 

Fertilizers 371 21370 71 270 45 166 56 1200 54 1753 86 659 59 391 

Chemicals(Except Fertilizers) 6535 150599 228 1829 235 6285 314 7643 419 12985 475 24245 403 38582 

Photographic raw film/Paper 122 1136 0 0 0 0 0 0 0 0 0 0 0 0 

Dye Stuffs 21 194 9 112 2 1 5 0 5 8 8 125 14 430 

Drugs and Pharmaceuticals 956 9840 139 767 116 798 130 1082 175 2016 206 2205 220 4290 

Textiles 5962 108641 398 3536 463 3482 500 2928 525 8053 815 21605 1080 26325 

Paper and Pulp 1525 35984 77 1083 70 2029 67 12409 85 1869 141 5473 135 8199 

Sugar 1192 24036 165 5029 89 2994 45 1639 176 12582 517 36064 540 58295 

Fermentation Industries 115 1280 191 5598 242 2707 231 2271 143 2050 83 2888 178 8008 

Food Processing Industry 2195 30243 96 1102 146 571 273 1581 238 2043 241 2977 264 3302 

Vegetable Oil & Vanaspathi 2032 17508 98 631 94 580 90 1305 157 1429 141 1057 110 1248 

Soaps, Cosmetics and Toiletries 228 2491 35 867 44 484 55 729 59 786 48 1034 68 1719 

Rubber Goods 486 10769 20 352 26 241 41 573 43 785 65 1102 52 2403 

Leather 125 1118 7 22 20 41 47 152 25 109 54 209 46 148 

Glue and Gelatin 48 336 4 17 2 168 1 3 6 228 7 82 6 31 

Glass 187 6272 12 103 13 333 20 86 43 2257 43 692 32 2179 

Ceramics 284 3226 23 377 14 508 44 486 35 550 55 1316 65 1087 

Cement and Gypsum 957 61811 68 4156 44 1813 50 2481 81 5482 106 9792 172 39140 

Timber Products 81 1613 8 27 6 23 10 82 4 14 9 163 0 0 

Defence Industries 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

Misc.Industry 316 1860 53 321 65 196 55 166 84 446 61 1117 69 1115 

Others 3172 68180 390 10230 490 17140 392 14019 515 16201 603 24590 657 47554 

Total 41159 854708 2981 91234 3172 91291 3875 118612 5118 267069 6203 353956 6260 588271 

145


STATEWISE DETAILS OF IEMs IMPLEMENTED FROM 

AUGUST 1991 T0 DECEMBER 2006 BASED ON 

PART B OF IEM FORM FILED BY ENTREPRENEURS 

APPENDIX –VII 

S.No. State/UT No.of IEMs Investment (Rs.Crore) Employment 

(Numbers) 

1 Andhra Pradesh 509 14557 58045 

2 Arunachal Pradesh 3 9 319 

3 Assam 79 1284 7206 

4 Bihar 7 65 768 

5 Chhattisgarh 60 1295 11027 

6 Delhi 46 635 4576 

7 Goa 100 819 13236 

8 Gujarat 1125 70586 157094 

9 Haryana 395 16856 62624 

10 Himachal Pradesh 58 1297 8012 

11 Jammu & Kashmir 14 1068 19797 

12 Jharkhand 58 1946 9590 

13 Karnataka 184 9009 28972 

14 Kerala 79 1017 11689 

15 Madhya Pradesh 304 8645 69775 

16 Maharashtra 961 29106 161246 

17 Manipur 1 13 385 

18 Meghalaya 17 58 951 

19 Mizoram 0 0 0 

20 Nagaland 0 0 0 

21 Orissa 52 1843 9367 

22 Punjab 284 6039 71116 

23 Rajasthan 375 12916 79782 

24 Sikkim 2 15 69 

25 Tamil Nadu 438 9638 58562 

26 Tripura 5 72 217 

27 Uttar Pradesh 508 19441 79735 

28 Uttarakhand 43 384 4933 

29 West Bengal 475 28963 81917 

30 Andaman & Nicobar Islands 0 0 0 

31 Chandigarh 4 258 1165 

32 Dadra & Nagar Haveli 81 1336 8664 

33 Daman & Diu 87 2270 5836 

34 Lakshadweep 0 0 0 

35 Puduchery 43 314 4551 

Total 6397 241756 1031246 

146


INDUSTRIAL INVESTMENT PROPOSALS(STATEWISE) 

AUGUST 1991- DECEMBER 2006 

APPENDIX–VIII 

IEM+LOI+DIL INDUSTRIAL ENTREPRENEUR LETTERS OF INTENT (LOIs)+DIRECT 

MEMORANDUM (IEMs) 

INDUSTRIAL LICENCES(DILs) 

Name of the Total % age Nos % age Proposed % age Proposed % age No % age Proposed % age Propose % age 

State/UTs Inv. on Invest. Emp. Gran- Invest. Emp. 

(Rs. Cr) Filed (Rs. Cr) Emp. (Nos) ted (Rs. Cr) (Nos) 

Gujarat 386085 15.52 8296 12.06 364712 15.42 1395654 10.56 458 10.82 21373 17.50 74263 8.19 

Maharashtra 321795 12.94 12531 18.22 303143 12.82 2081886 15.75 582 13.75 18652 15.27 132398 14.60 

Chhattisgarh 239415 9.63 1694 2.46 238850 10.10 369188 2.79 31 0.73 565 0.46 3816 0.42 

Andhra Pradesh 215030 8.65 4809 6.99 201916 8.54 825363 6.25 484 11.42 131142 10.73 85825 9.47 

Orissa 195438 7.86 1044 1.52 189994 8.03 283746 2.15 37 0.87 5444 4.46 11882 1.31 

Uttar Pradesh 166377 6.69 2768 8.87 156034 6.60 496648 3.76 261 6.61 10343 8.47 75321 8.31 

Karnataka 165814 6.67 6101 4.03 156032 6.60 1462838 11.07 360 8.50 9782 8.01 101152 11.16 

Tamil Nadu 156510 6.29 5890 8.87 143676 6.07 1771494 13.41 817 19.30 12383 10.51 144517 15.94 

West Bengal 92336 3.71 3887 8.57 88181 3.73 654388 4.95 101 2.39 4155 3.40 20706 2.28 

Jharkhand 84695 3.41 756 1.10 84332 3.57 197835 1.50 16 0.38 363 0.30 2118 0.23 

Madhya Pradesh 84024 3.38 2491 3.62 80853 3.42 494971 3.75 144 3.40 3171 2.60 30282 3.34 

Punjab 76087 3.06 2728 3.97 69653 2.95 605496 4.58 242 5.72 6433 5.27 75433 8.32 

Haryana 65799 2.65 3670 5.34 61428 2.60 555862 4.21 240 5.67 4371 3.58 64239 7.08 

Rajasthan 56294 2.26 3014 4.38 54662 2.31 537958 4.07 98 2.31 1632 1.34 15480 1.71 

Dadra & Nagar Haveli 31690 1.27 1988 2.89 31372 1.33 219276 1.86 37 0.87 318 0.26 3994 0.44 

Uttarakhand 28752 1.16 1391 2.02 28488 1.20 224068 1.70 28 0.66 264 0.22 7713 0.85 

Himachal Pradesh 17964 0.72 793 1.15 17476 0.74 149132 1.13 35 0.83 488 0.40 6232 0.69 

Nagaland 16244 0.65 13 0.02 16244 0.69 301852 2.28 1 0.02 0 0.00 0 0.00 

Bihar 13562 0.55 244 0.35 12100 0.51 46234 0.35 33 0.78 1462 1.20 13674 1.51 

Kerala 12287 0.49 579 0.84 9421 0.40 93349 0.71 74 1.75 2866 2.35 14755 1.63 

Assam 11253 0.45 460 0.67 8818 0.37 56196 0.43 13 0.31 2435 1.99 4606 0.51 

Puduchery 9566 0.38 679 0.99 8262 0.35 68071 0.52 19 0.45 1304 1.07 2894 0.32 

Jammu & Kashmir 8710 0.35 528 0.77 8634 0.37 87238 0.66 7 0.17 76 0.06 2074 0.23 

Goa 8140 0.33 591 0.86 7972 0.34 65186 0.49 37 0.87 168 0.14 3526 0.39 

Daman & Diu 7283 0.29 937 1.36 7183 0.30 72880 0.55 25 0.59 100 0.08 3605 0.40 

Delhi 6693 0.27 498 0.72 6663 0.28 50879 0.39 21 0.50 30 0.02 1652 0.18 

Meghalaya 3757 0.15 231 0.34 3750 0.16 21114 0.16 3 0.07 7 0.01 207 0.02 

Tripura 2134 0.09 31 0.05 2134 0.09 3661 0.03 0 0.00 0 0.00 0 0.00 

Sikkim 1666 0.07 34 0.05 1661 0.07 4454 0.03 1 0.02 5 0.00 204 0.02 

Chandigarh 693 0.03 44 0.06 693 0.03 7734 0.06 1 0.02 0 0.00 9 0.00 

Arunachal Pradesh 428 0.02 34 0.05 427 0.02 5684 0.04 4 0.09 1 0.00 522 0.06 

Andaman & Nicobar 362 0.01 10 0.01 362 0.02 2646 0.02 0 0.00 0 0.00 0 0.00 

Manipur 10 0.00 3 0.00 10 0.00 888 0.01 0 0.00 0 0.00 0 0.00 

Lakshadweep 4 0.00 1 0.00 4 0.00 278 0.00 0 0.00 0 0.00 0 0.00 

Mizoram 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 

Location in more 

than One State 406 0.02 0 0.00 0 0.00 0 0.00 24 0.57 406 0.33 3617 0.40 

Total 2487303 100.00 68768 100.00 2365141 100.00 13214147 100.00 4234 100.00 122162 100.00 906716 100.00 

Note:Figures of 3 New States includes those units located in districts originally falling within the respective parent states. 

147


INDUSTRIAL INVESTMENT PROPOSALS (SECTORWISE) 

AUGUST 1991-DECEMBER 006 

APPENDIX–IX 

IEM+LOI+DIL INDUSTRIAL ENTREPRENEUR LETTERS OF INTENT (LOIs)+DIRECT 

MEMORANDUM (IEMs) 

INDUSTRIAL LICENCES(DILs) 

Sch. Ind No. Total % age Nos % age Proposed % age Proposed % age No % age Proposed % age Propose % age 

and Name Inv. on Invest. Emp. Gran- Invest. Emp. 

(Rs. Cr) Filed (Rs. Cr) Emp. (Nos) ted (Rs. Cr) (Nos) 

01 Metallurgical Industries 520876 21.94 11269 16.39 519305 21.96 2066961 15.64 94 2.22 1571 1.29 15264 1.69 

05 Electrical Equpts 349175 14.04 4219 6.14 348480 14.73 706787 5.35 90 2.13 695 0.57 25333 2.79 

19 Chemicals(Except Fertilizers) 276315 11.11 8609 12.52 242168 10.24 1049018 7.94 514 12.14 34145 27.95 71711 7.93 

02 Fuels 224091 9.01 432 0.63 196457 8.31 115248 0.87 141 3.33 27634 22.62 32282 3.56 

23 Textiles 185493 7.46 9744 14.17 174586 7.38 2980536 22.56 1038 24.52 10907 8.93 239359 26.40 

25 Sugar 154106 6.20 2724 3.96 140639 5.95 952642 7.21 414 9.78 13467 11.02 208614 23.01 

35 Cement and Gypsum 125673 5.05 1479 2.15 124766 5.28 303394 2.30 37 0.87 907 0.74 7464 0.82 

24 Paper and Pulp 70392 2.83 2101 3.06 67046 2.83 465476 3.52 63 1.49 3346 2.74 26880 2.96 

27 Food Processing Industry 44113 1.77 3444 5.01 41814 1.77 889143 6.73 89 2.10 2299 1.88 7886 0.87 

07 Transportation 43258 1.74 1012 1.47 37144 1.57 283749 2.15 97 2.29 6114 5.00 36978 4.08 

06 Telecommunications 36491 1.47 1336 1.94 35808 1.51 230838 1.75 49 1.16 683 0.56 14287 1.58 

12 Misc.Mechanical & Engg.Ind 28948 1.16 2226 3.24 28610 1.21 217475 1.65 41 0.97 338 0.28 7196 0.79 

22 Drugs and Pharmaceuticals 26829 1.08 1942 2.82 20998 0.89 196006 1.48 752 17.76 5831 4.77 69921 7.71 

08 Industrial Machinery 26598 1.07 1582 2.30 24503 1.04 184888 1.40 73 1.72 2095 1.71 9147 1.01 

18 Fertilizers 26057 1.05 1182 1.72 24786 1.05 118798 0.90 223 5.27 1271 1.04 32949 3.63 

26 Fermentation Industries 25809 1.04 742 1.08 25809 1.09 109841 0.83 0 0.00 0 0.00 0 0.00 

28 Vegetable Oil & Vanaspathi 23854 0.96 2722 3.96 23758 1.00 273286 2.07 21 0.50 96 0.08 2023 0.22 

04 Prime Movers 17726 0.71 1042 1.61 17726 0.75 162750 1.23 0 0.00 0 0.00 0 0.00 

30 Rubber Goods 16416 0.66 733 1.07 16225 0.69 187242 1.42 25 0.59 191 0.16 5810 0.64 

33 Glass 12001 0.48 351 0.51 11922 0.50 66146 0.50 7 0.17 79 0.06 1046 0.12 

29 Soaps, Cosmetics and Toiletries 8244 0.33 537 0.78 8110 0.34 95091 0.72 24 0.57 134 0.11 3524 0.39 

34 Ceramics 7558 0.30 520 0.76 7459 0.32 65294 0.49 17 0.40 99 0.08 876 0.10 

38 Misc.Industry 7304 0.29 704 1.02 5221 0.22 64434 0.49 71 1.68 2083 1.71 12362 1.36 

13 Comm/Office/Hhold equpts 4723 0.19 324 0.47 1799 0.08 56823 0.43 201 4.75 2924 2.39 48137 5.31 

31 Leather 4707 0.19 274 0.40 4647 0.20 51931 0.39 20 0.47 60 0.05 3100 .34 

16 Scientific Instruments 4364 0.18 323 0.47 4364 0.18 59006 0.45 0 0.00 0 0.00 0 0.00 

10 Agricultural machinery 3790 0.15 116 0.17 3738 0.16 21666 0.16 5 0.12 52 0.04 5191 0.57 

37 Defence Industries 3603 0.15 0 0.00 0 0.00 0 0.00 50 1.18 3603 2.95 5502 0.61 

36 Timber Products 2895 0.12 118 0.17 1922 0.08 21854 0.17 37 0.87 973 0.80 7343 0.81 

09 Machine Tools 2317 0.09 210 0.31 1848 0.08 33357 0.25 26 0.64 468 0.38 3679 0.41 

11 Earth Moving Machinery 1230 0.05 72 0.10 1228 0.05 16782 0.13 1 0.02 2 0.00 0 0.00 

20 Photographic raw film/Paper 1137 0.05 122 0.18 1136 0.05 10160 0.08 1 0.02 1 0.00 55 0.01 

21 Dye Stuffs 921 0.04 64 0.09 870 0.04 6200 0.05 5 0.12 51 0.04 1307 0.14 

32 Glue and Gelatin 865 0.04 74 0.11 865 0.04 8715 0.07 0 0.00 0 0.00 0 0.00 

14 Medical and Surgical Inst 715 0.03 74 0.11 691 0.03 10354 0.08 3 0.07 24 0.02 418 0.05 

03 Boilers&Steam Gen.Plants 449 0.02 18 0.03 449 0.02 3006 0.02 0 0.00 0 0.00 0 0.00 

15 Industrial Instruments 232 0.01 41 0.06 215 0.01 9455 0.07 4 0.09 17 0.01 1072 0.12 

17 Math,Survey,Drawing Inst. 114 0.00 5 0.01 114 0.00 2006 0.02 0 0.00 0 0.00 0 0.00 

Others (Non-Scheduled 

Industries/Services) 197914 7.96 6192 9.04 197914 8.37 1117789 8.46 0 0.00 0 0.00 0 0.00 

Total 2487303 100.00 68768 100.00 2365141 100.00 13214147 100.00 4234 100.00 122162 100.00 906716 100.00 

148


APPENDIX–X 

SECTOR-WISE BREAK-UP OF FOREIGN TECHNOLOGY COLLABORATIONS 

(COVERING BOTH AUTOMATIC AND GOVERNMENT ROUTE) 

SINCE AUGUST 1991 TO DECEMBER, 2006. 

Name of the Sector No. of No. of Total Sectoral 

Approval by Approval by Percentage 

RBI SIA+FIPB 

Electrical Equipments 

(Including S/W & Elec.) 811 441 1252 16.0 

Industrial Machinery 623 246 869 11.1 

Chemicals (Other than Fertilizers) 451 430 881 11.3 

Transport Industries 

(including automobiles) 400 323 723 9.3 

Miscellaneous Mechanical 

& Engineering 267 171 438 5.6 

Metallurgical Industries 217 152 369 4.7 

Fuels (including Power & 

Oil refineries) 56 270 326 4.2 

Drugs and Pharmaceuticals 197 70 267 3.4 

Hotel & Tourism 42 200 242 3.1 

Textiles 75 95 170 2.2 

Food Processing Industries 93 72 165 2.1 

Telecommunications 52 82 134 1.7 

Industrial instruments 91 29 120 1.5 

Miscellaneous and 

other industries 1205 654 1859 23.8 

Total 4580* 3235 7813 100 

* This does not include the foreign technology collaborations filed with the RBI under 

the automatic route from October, 2004 onwards. 

149


LIST OF GROWTH CENTRES 

Sl.No. Name of the Growth Centre District 

ANDHRA PRADESH 

1. Hindupur Anantpur 

2. Jedchrela Mehboobnagar 

3. Bobbili Vizianagaram 

4. Ongole Prakasam 

ARUNACHAL PRADESH 

5. Niklok-Ngorlung East Siang 

ASSAM 

6. Matia Goalpara 

7. Chariduar Sonitpur 

8. Chaygaon-Patgaon Kamrup 

BIHAR 

9. Begusarai Begusarai 

10. Bhagalpur Bhagalpur 

11. Chhapra Chhapra 

12. Darbhanga Darbhanga 

13. Muzaffarpur Muzaffarpur 

CHHATTISGARH 

14. Borai Durg 

15. Siltara Raipur 

GOA 

16. Electronic- City Verna-Plateau 

GUJARAT 

17. Gandhidham Kutch 

18. Palanpur Banaskantha 

19. Vagra Bharauch 

HARYANA 

20. Bawal Rewari 

21. Saha Ambala 

HIMACHAL PRADESH 

22. Kangra Kangra 

APPENDIX–XI 

150



JAMMU & KASHMIR 

23. Lassipora Pulwama 

24. Samba Jammu 

JHARKHAND 

25. Hazaribagh Hazaribagh 

KARNATAKA 

26. Dharwad Dharwad 

27. Raichur Raichur 

28 Hassan Hassan 

KERALA 

29. Kannur-Kozhikode Kannur-Kozhikode 

30. Alappuza-Malappuram Alappuza-Malappuram 

MADHYA PRADESH 

31. Chainpura Guna 

32. Ghirongi Bhind 

33. Kheda Dhar 

34. Satlapur Raisen 

MAHARASHTRA 

35. Akola Akola 

36. Chandrapur Chandrapur 

37. Dhule Dhule 

38. Nanded Nanded 

39. Ratnagiri Ratnagiri 

MANIPUR 

40. Lamlai- Napet Imphal 

MEGHALAYA 

41. Mendhipattar East Garo Hills 

MIZORAM 

42. Luangmual Aizawl 

NAGALAND 

43. Ganeshnagar Kohima 

ORISSA 

44. Chhatrapur Ganjam 

45. Kalinganagar –Duburi Cuttack 

151



46. Jharsuguda Jharsuguda 

47. Kesinga Kalahandi 

PUDUCHERY 

48. Polagam-Karaikal Karaikal 

PUNJAB 

49. Bathinda Bathinda 

50. Pathankot Gurdaspur 

RAJASTHAN 

51. Abu-Road Sirohi 

52. Bhilwara Bhilwara 

53. Khara Bikaner 

54. Dholpur Dholpur 

55. Jhalawar Jhalawar 

SIKKIM 

56. Salghari-Samlik Marchak 

TAMILNADU 

57. Erode Periyar 

58. Oragadam Kancheepuram 

59. Tirunelveli – Tirunelveli- 

(Gangai Kondan) 

Kattabomman 

TRIPURA 

60. Bodhjangnagar West Tripura 

UTTRAKHAND 

61. Siggadi Pauri -Garhwal 

UTTAR PRADESH 

62. Bijauli Jhansi 

63. Jamaur Shahjahanpur 

64. Pakbara Moradabad 

65. Dibiapur Auraiya 

66. Jainpur Kanpur Dehat 

67. Satharia Jaunpur 

68. Shajanwa Gorakhpur 

WEST BENGAL 

69. Bolpur Birbhum 

70. Jalpaiguri Jalpaiguri 

71. Malda Malda 

152


APPENDIX–XII 

FULL CENTRAL ASSISTANCE HAS BEEN RELEASED FOR THE 

FOLLOWING 27 GROWTH CENTERS : 


CHHATTISGARH 

1 Borai Durg 

2 Siltara Raipur 

GOA 

3 Electronic- City Verna-Plateau 

GUJARAT 

4 Vagra Bharauch 

HARYANA 

5 Bawal Rewari 

JAMMU & KASHMIR 

6 Samba Jammu 

KARNATAKA 

7 Dharwad Dharwad 

8 Raichur Raichur 

9 Hassan Hassan 

KERALA 

10 Kannur-Kozhikode Kannur-Kozhikode 

11 Alappuza-Malappuram Alappuza-Malappuram 

MADHYA PRADESH 

12 Ghirongi Bhind 

13 Kheda Dhar 

14 Satlapur Raisen 

MAHARASHTRA 

15 Akola Akola 

16 Nanded Nanded 

153



NAGALAND 

17 Ganeshnagar Kohima 

ORISSA 

18 Kalinganagar –Duburi Cuttack 

PUNJAB 

19 Bathinda Bathinda 

20 Pathankot Gurdaspur 

RAJASTHAN 

21 Abu-Road Sirohi 

22 Dholpur Dholpur 

TAMILNADU 

23 Erode Periyar 

TRIPURA 

24 Bodhjangnagar West Tripura 

UTTAR PRADESH 

25 Pakbara Moradabad 

26 Jainpur Kanpur Dehat 

27 Shajanwa Gorakhpur 

154


PRODUCTION FIGURES FOR INDUSTRIES (2005-06 & 2006-07) 

APPENDIX-XIII 

2005-06 2006-07 

S. Name of the Accounting No. of Actual No. of Production 

No. Industry unit units Production units (Estimated) 

I. CEMENT INDUSTRY 

Million Tonnes 129 large 147.81 129 large 162.00 

plants + about 

plants + more 

300 mini than 206 mini 

cement plants 

cement plants 

II CERAMIC INDUSTRY 

1. Ceramic Tiles 16 + 200 196.5 Million16 + 200 N.A. 

SSI units Sq. Mtr. SSI units 

2. Potteryware M.T. 16 + 1200 39,400 16 +1200 N.A. 

SSI units 

SSI units 

3. Sanitaryware M.T. 7 + 200 2,75,400 7 + 200 N.A. 

SSI units 

SSI units 

III ELECTRICAL COMPONENTS AND CONSUMER DURABLES 

1 Refrigerators & Rs. lakhs 8 6351.20 8 5397.90 

Air Conditioning 

plants 

2. Cooling Towers Rs. lakhs 2 20538.00 2 19646.00 

3. Refrigerators 

(Domestic) Th. Nos. 13 5158.70 13 4490.31 

4. Cranes Tonnes 17 11445.00 17 12716.00 

5. Lifts Numbers 3 7086.00 3 5226.00 

6. Power Driven 

Pumps Th. Nos. 49 718.30 49 615.87 

7. Electric Motors Lakh H.P. 27 104.60 27 85.20 

8. Electric Fans 

(all kinds) Lakh Nos. 14 69.30 14 53.74 

9. Power Capacitors KVAR 6 9892892.00 6 7282261.00 

10. ACSR/AA 

conductors Tonnes 14 28057.00 14 21691.00 

11. Winding Wires Tonnes 12 24413.00 12 19003.00 

12 Dry Cells Million Nos. 12 2678.90 12 1950.73 

13. GLS Lamps Million Nos. 18 481.90 18 352.76 

14. Fluorescent Tubes Lakh Nos 19 2018.50 19 1563.23 

15. Electrolytic 

Capacitors Mill.Nos. 10 944.60 10 679.88 

155


2005-06 2006-07 

S. Name of the Accounting No. of Actual No. of Production 

No. Industry unit units Production units (Estimated) 

16. Switchgear 

(Circuit Breakers) Nos. 17032004.00 14174673.00 

17. Air & Gas 

Compressors Numbers 15 114715.00 15 77137.00 

18. Protection System/ 

Switch Board/Switch 

Gear etc. Rs. thousand 15 2238905.00 15 3047269.00 

19. Washing /Laundry 

Machines etc. Numbers 14 1756626.00 14 1548430.00 

20. Insulated Cables & 

Wires of all kinds Core KM 15 896022.00 15 595897.00 

21. Lighting, Fitting & 

Fixtures Rs. Lakhs 2 4705.80 2 3503.22 

22. Electric Motors 

(phase one) Numbers 17 3197490.000 17 2527661.00 

IV EXPLOSIVE INDUSTRY 

1 Detonating Fuses Million Metres 22 205 23 161 

2 Detonators Millions 12 436 13 333 

3 Explosives Tonnes 62 448999 57 353586 

4 Safety Fuses Million 9 158 8 124 

156

Printed at : Aravali Printers & Publishers Pvt. Ltd.

P rin te dat : A ra va li P rin te rs & P ub lish e rs P v t. L td

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