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To promote ease of doing business and growth of the sector, the draft rubber bill has proposed a series of steps, including replacement of periodic licensing with onetime registration, removal of permission requirement for possession of natural rubber and laying down clear procedures for inspection. The commerce ministry has put the draft Rubber (Promotion and Development) Bill, 2022, on its website for stakeholders' views and suggestions.
To promote ease of doing business and growth of the sector, the draft rubber bill has proposed a series of steps, including replacement of periodic licensing with one-time registration, removal of permission requirement for possession of natural rubber, and laying down clear procedures for inspection.
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The commerce ministry has proposed the repeal of decades-old laws on rubber and introduced new legislation that seeks to address the challenges faced by the sector and remove some of the archaic provisions of present law to create a conducive environment for businesses.
The ministry has put the draft Rubber (Promotion and Development) Bill, 2022, on its website for stakeholders’ views and suggestions.
Introducing a fresh law
In an office memorandum, the Department of Commerce has said it is proposing to repeal the Rubber Act 1947 and introduce a new law. Explaining the rationale behind the proposal to repeal the Rubber Act, the draft bill has said that in recent years, there have been widespread changes in the industrial and economic scenario, especially concerning development in rubber and allied sectors.
"Therefore, it has become imperative to remove archaic provisions, create an environment conducive for easy conduct of business, reorient functions of the (Rubber) Board with equal focus on upstream and downstream sectors and to contribute towards making world-class rubber industry," as per the draft Rubber (Promotion and Development) Bill.
What are the other clauses
The other new clauses proposed in the draft include removal of provisions relating to import and sale of natural rubber (NR) and its purchase in the domestic market by Rubber Board; specific provisions for developing and assisting new plantations and revising existing ones; norms to promote research, exports, human resource development, skill development in line with the needs of the industry; and replacing certain penal actions with a civil penalty.
The current law has certain archaic provisions including the requirement of periodic licences for large growers, dealers, processors, and manufacturers; possession of NR without licence invites forfeiture and prosecution; provision for import and sale of NR in the domestic market by the Rubber Board, and contravention of norms invite criminal liability with provisions of compounding.
Decades-old Rubber Act
An official said that the Rubber Act 1947 was enacted at a time when total NR production was 22,500 metric tonnes (MT) and the area under cultivation was 75,000 hectares. Today, total annual production is set to reach 8,00,000 MT in an area of 8,25,000 hectares.
There is a great need to increase the total area of production to reach self-sufficiency and minimise imports. There is also the requirement to support industries, particularly MSMEs, who are into making products in the non-tyre sector, the official said.
NR is one of the most versatile raw materials used in industry and finds a place in about 40,000 products worldwide. India is one of the few countries that produce and consume NR in large quantities.
Production and exports
Till December 2021 this fiscal, India’s NR import and export stood at 4,07,930 MT and 2,939 MT, respectively. During the period, the production stood at 5,60,000 MT and consumption at 9,17,000 MT.
In 2020-21, the country’s import and export was 4,10,478 MT and 11,343 MT, respectively. The production stood at 7,15,000 MT and consumption at 10,96,410 MT. Globally, India is placed at fifth position with regard to production and second in consumption.
There is a wide gap between production and consumption, which is leading to a huge surge in imports, besides a fall in new planting and replanting of rubber, the official added. The bill also seeks to make the Rubber Board act as a facilitator rather than the regulator of the sector, with more focus on market development and branding, quality and testing, research, value addition and export-oriented production.