Course Outline: Industrial & Environmental Legislations

Course Outline: Industrial & Environmental Legislations Industrial Policy and Industrial Act, Registration of an industrial unit under Industrial Act, various approvals required for setting up an industrial unit, Gujarat Industrial policy & Incentive schemes(for individual unit, CETP/TSDF, clusters etc), SEZ Act and policy, CRZ, International conferences and Constitutional provisions, Water Act, Air Act, Environment Protection Act, Case studies, Environment Clearance, Hazardous Waste Management Rules, Plastic Rules, Noise Rules etc, Green/Red/Orange Industries, NOC exempted units, Legislation on Industrial Health and Safety.

Presentation on Industrial Policy & Act

Neeru Bansal 08 Jan , 09

Introduction : Industrial Units Industrial Units are of 2 types 

Manufacturing units Manufacturing any of the products.

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Service Sector: encompasses all industries except those in the goods-producing sector like agriculture, mining, construction and manufacturing. Services include transportation, communication, public utilities, wholesale and retail trade, finance, insurance, real estate, other personal and business services.

Introduction : Industrial Units Ancillary industrial Unit An industrial undertaking engaged in (i) manufacture of parts, components, sub-assemblies, tooling or intermediates; (ii) rendering of services, or supplying or rendering, not more than fifty per cent of its production or its total services, as the case may be, to other units for production of other articles. Factory: means any premises where manufacturing process is being carried on with the aid of power, provided that fifty or more workers are working without the aid of power, provided that one hundred or more workers are working

Introduction : Industrial Units National Industrial Classification: 

This is Harmonized Commodity description and Coding system

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A standard industrial classification is essential for developing a proper statistical system.

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It covers all sectors like agriculture, mining, manufacturing and service.

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It facilitates the use of data for national economic policy and

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for international comparisons 

e.g.260

Manufacture of knitted or crocheted textile products

Industrial Units : Classification (Service)

Plant & Machinery

Equipment

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Micro

< Rs. 25 lac

< Rs. 10 lac

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Small

Rs. 25 lac - Rs. 5 cr.

Rs. 10 lac - Rs. 2 cr.

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Medium

Rs. 5 cr.- Rs. 10 cr.

Rs. 2 cr.- Rs. 5 cr.

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Large Scale Unit Manufacturing units having investment of 10 crs and service sector having investment above 5 crs are known as large scale units.

Industrial Units : Parks Industrial Park : 

Industrial Park is an estate which is developed primarily for establishment of industrial units (manufacture /service)

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having basic infrastructure facilities like developed plot, internal roads, water distribution facilities, sewage, power distribution, communication facilities and such other facilities/services as may be required.

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and must have provision for the location of minimum 30 industrial/service units.

Mini Industrial Park: 

Mini Industrial Park is a Park having facilities as defined above.

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However, it must locate minimum 11 industrial units/service units.

Industrial Units : Parks Hi-tech Park: 

Hi-tech Park is an industrial park for specific activities like

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Bio-technology

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Pharmaceuticals and clinical testing

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Information Technology

Industrial Units : Parks Export Park: 

Export Park is an industrial park as defined above and developed specifically for

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promoting export oriented units as approved by Government of India under EOU scheme.

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In addition, the park must have specific facilities towards export promotion and export marketing.

Industrial Act : 1951 An Act to provide for Development & Regulation of industries Prior to 1991 : Licence Raj 

No person or authority other than Central Govt., could establish any new industrial undertaking, except under and in accordance with a licence issued in that behalf by the Central Govt.

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Provided that a Government other than Central Government may, with the previous permission of the Central Government, establish a new industrial undertaking.

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A licence or permission will specify conditions as to the location of the undertaking and minimum standards in respect of size to be provided therein as the Central Govt. may deem fit to impose.

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Even for adding a new product or enhancing production capacity, amendment in the license was required.

Industrial Act : Post 1991 Major changes in the industrial policy took place like 

Deregulating Indian industry;

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Allowing the industry freedom and flexibility in responding to market forces and

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Providing a policy regime that facilitates and fosters growth of Indian industry.

New Mantra Liberlization : Privatization : Globalization

Industrial Policy : Post 1991 Objectives of changes in Industrial Policy were – 

to maintain a sustained growth in productivity;

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to enhance gainful employment;

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to achieve optimal utilization of human resources;

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to attain international competitiveness and

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to transform India into a major partner and player in the global arena.

Industrial Policy : Post 1991

Liberalization of Industrial Licensing Policy Presently only 6 industries are under compulsory licensing mainly on account of environmental, safety & strategic considerations. Similarly, only 3 industries reserved for the public sector.

List of industries under compulsory licensing 1. Distillation and brewing of alcoholic drinks. 2. Cigars, cigarettes of tobacco & tobacco substitutes. 3. Electronic Aerospace and defence equipment: all types. 4. Industrial explosives including detonating fuses, safety fuses, gun powder etc. 5. Hazardous chemicals. 6. Drugs and Pharmaceuticals (according to modified Drug Policy issued in September, 1994).

Industrial Policy : Post 1991 List of industries reserved for Public Sector 

Atomic energy.

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Substances specified in the scheduled to the notification of the Government of India in the Department of Atomic Energy number S.O.212(E), dated the 15th March, 1995.

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Railway Transport

Industrial Policy : Post 1991 Simplification of Procedures 

Introduction of Industrial Entrepreneurs' Memorandum (IEM) Large Scale Industries not requiring compulsory licensing are to file an IEM to the Secretariat for Industrial Assistance (SIA). No industrial approval is required for such exempted industries. Amendments are also allowed to IEM proposals filed after 1.7.1998.

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Registration of Cottage/small/Medium Industries: These are now required to be registered with the District Industries centre of the State Government. (FORM DIC)

Industrial Policy : Post 1991 : Simplification of Procedures Policy for Small Scale Industries 

Encourage small scale sector in areas where there is technoeconomic justification for such an approach.

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Reservation / de-reservation of products is examined on a continual basis by an Advisory Committee.

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Currently 749 items are reserved for SSIs.

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All undertakings other than SSI engaged in manufacture of items reserved for SSI are required to obtain industrial licence and also undertake export obligation of 50% of annual production.

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This condition of licensing is not applicable for 100% EOUs, Export Processing Zone (EPZ) or SEZs.

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In addition, if equity holding from another company exceeds 24 % in the SSI, the unit loses its small scale status.

Industrial Policy : Post 1991 : Simplification of Procedures 

Non-Resident Indians Scheme General policy and facilities for Foreign Direct Investment as available to foreign investors/company are fully applicable to NRIs as well. In addition, Govt. has extended some concessions specially for NRIs & overseas corporate bodies having more than 60% stake by NRIs. These inter- alia includes (i) NRI/OCB investment in the real estate and housing sectors upto 100% and (ii) NRI/OCB investment in domestic airlines sector upto 100%. NRI/OCBs are also allowed to invest upto 100% equity on nonrepatriation basis in all activities except for a small negative list. Apart from this, NRI/OCBs are also allowed to invest on repatriation/non-repatriation under the portfolio investment scheme.

Industrial Policy : Post 1991 : Simplification of Procedures Policy for Foreign Direct Investment (FDI) 

Liberal & transparent foreign investment regime in place with most activities are opened to foreign investment on automatic route without any limit on the extent of foreign ownership.

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Some of the recent initiatives taken to further liberalize the FDI regime include opening up of sectors such as Insurance (upto 26%); development of integrated townships (upto 100%); defence industry (upto 26%); tea plantation (upto 100%) etc.

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The investment facilitation measures has been strengthened through Foreign Investment Implementation Authority.

Industrial Policy : Post 1991 : Simplification of Procedures Electronic Hardware Technology Park (EHTP)/ Software Technology Park (STP) scheme: 

This scheme is aimed at building up strong electronics industry and with a view to enhancing export.

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The inputs are allowed to be procured free of duties.

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The Directors of STPs have powers to approved fresh STP/EHTP proposals and also grant post-approval amendment 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.

Project start Ups

For starting an industrial project, an entrepreneur must normally follow the following process: 

Know the project or products to be manufactured

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Get a project profile which must provide brief information on the project or products to be manufactured

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Decide location where the entrepreneur is likely to put up the project

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Understand the procedures and formalities which are required to be completed before taking up the project for implementation

Approvals Required for establishing an Industrial Project (GUJARAT) Approval Type

Authority

Remarks

Industrial Approval 1 Entrepreneurship District Industries Memorandum (EM) Centre

For setting up SME Prescribed Application form

2 Industrial Secretariat For For setting up projects other than SME, Entrepreneurship Industrial and not included in compulsory licensing Memorandum(IEM Approval(SIA), New provision Delhi Application in prescribed form(IEM) Part I . Format of Follow-Up Report to be submitted Till Commencement of Production - Status of After Commencement of Production - Part-B

3 Letter of Intent(LOI)

Do

Projects requiring compulsory licensing Application in prescribed form

4 100% EOU & SEZ units

Development Application in prescribed form Commissioner, SEZ

Business Constitution Approval Type Authority 1 Registration as Firm

Registrar of Firms

Remarks Proprietory concerns or Partnership Firm

2 Private/Public Registrar of Company: Name Companies , approval and incorporation of the Company

Private Ltd. or Public Ltd. Company

3 Cooperative Society

For forming Cooperative Society

Registrar of Cooperatives

Land for project Approval Type

Authority

Remarks

1 Allotment of GIDC

Application in prescribed form

2 Allotment of District Collector

No prescribed application

plot/shed in Industrial Estate

Government land

3 Agricultural

Purchase through No prior permission require negotiation

4 NA

Collector/DDO

Land

Permission

Prescribed application form for deemed NA

Environment Clearance Approval Type

Authority

Remarks

1 No Objection  Gujarat Pollution Application in the prescribed form  Certificate Board by polluting industries like  chemicals,  pharmaceuticals, etc.  (other than 100 industries listed by  GPCB) 2 Environmental   Ministry of  Specific projects need prior  Clearance (EC) Environment and  environmental clearance from  Forest  MOEF/State level Environment  (MOEF)/SEIAA Impact Assessment Authority  (SEIAA) 3 Consent and  Authorization

G.P.C.B.

On completion of the project and  meeting the norms for disposal of  effluent, G.P.C.B. will issue consent  letter

Approval Type

Authority

Remarks

Construction of Building 1 Plan Approval in GIDC Industrial Estate

Application to Regional Manager, GIDC

2 Plan Approval in Local Authority other area

Application to concerned local authority, where site is selected

Water Requirement 1 In Industrial Estate

GIDC

Application to Regional Manager/ Executive Engineer of GIDC

2 River/Public service

Department of Narmada Application to Executive Engineer of & Water Resources, GoG concerned Irrigation scheme

Power Requirement 1 Power requirement

Gujarat Urja Vikas Nigam Application in prescribed form Ltd.-Distribution Co. or respective agencies

Approval Type

Authority

Remarks

Financial Requirement 1 Capital Issue

SEBI

Application in prescribed form to Security Exchange Board of India

2 Term Loan

Financial Institut Application in prescribed form ions or Bank alongwith detailed Project Report

3 Working Capital

Banks

Application to Branch Manager of a Commercial Bank •Under the 'Single Window Schem e', both term loan & working capital upto Rs 25 lacs is available

1 SME

DIC

EM Part II

2 Large Units

SIA

•LOI

Final Approval is to be converted into IL •IEM Part II in case of delicensed units

Approval Type Authority

Remarks

Registration of Establishment 1 Registration Local Authority/ Registration of an industrial unit under Shops & Municipal Corpor not covered under Factories Act Establishment ation Act 2 Registration as Chief Inspector Factory of Factories

Application in prescribed form under the Factories Act

Value Added Tax 1 VAT Registration

2 Central Sales Tax 3 Excise Registration

Commercial Tax Application for certificate of registr Officer ation under GVAT Act 2003. (In case off turnover above Rs. 5 lakhs having sales of above Rs. 10,000 vat applicable items.

IEM

DIC FORM