[aaykarbhavan] source Economic times
| Government extends validity of industrial licences to 7 years NEW DELHI: The government further extended the validity of industrial licencesto as much as seven years from three on Monday to encourage domestic manufacturing.
"As a measure of 'ease of doing business', henceforth, two extensions of two years each in the initial validity of three years of (an) industrial licence shall be allowed up to seven years," the department of industrial policy and promotion (DIPP) said in a notification.
In July, DIPP had extended the validity of an industrial licence to three years from two, as part of measures to cut red tape. The BJP government is working to promote India as a manufacturing hub, with Prime Minister Narendra Modi launching the 'Make In India' drive last month. Manufacturing contracted by 0.7% in 2013-14, but recovered to 3.5% in the first quarter of the fiscal.
DIPP on Monday also relaxed the stipulation on annual capacity for defence items for industrial licences to encourage more companies to enter the sector and allow manufacturers to scale up. Licensees will however have to submit half-yearly production returns to DIPP and the department of defense production (DoDP).
Licensees will be allowed to sell defense items to government entities under the control of ministry of home affairs, state governments, public sector units and other valid defence-licensed companies without prior DoDP approval. "However, for sale of the item to any other entity, the licensee shall take prior permission from DoDP," the notification said.
All applications related to DIPP will be processed within 90 days. In the case of defence manufacturing, the ministry of home affairs will give security clearance within three months, which will ensure faster clearances.
These announcements are part of government's plan to promote indigenisation of India's defence production and cut its large import bill on this count.
The foreign direct investment limit in the defence sector was raised to 49% from 26% in August by the Modi government. It also allowed more than one Indian company to hold a 51% share in a defence production company.
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A.Rengarajan
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