DIPP pushes for 11-fold hike in FY15 budget for Delhi-Mumbai Industrial Corridor

In what could give a big push to urbanisation and infrastructure creation, two of the BJP’s chief electoral promises, the Narendra Modi government may increase this fiscal’s budget outlay for the prestigious Delhi-Mumbai Industrial Corridor (DMIC) manifold.

Dissatisfied with the 2014-15 interim budget estimate of just R693 crore for DMIC, the Department of Industrial Policy and Promotion (DIPP) has urged the finance ministry to raise the outlay to R7,478 crore in the forthcoming regular Budget to develop trunk infrastructure for the five smart industrial cities and six other projects planned in the initial phase of the mega public-private partnership project.

The DIPP is the nodal body for the DMIC project, principally an India-Japan venture. It is expected to generate investments of up to $90 billion.

The five cities include
Ahmedabad-Dholera Special Investment Region (SIR) in Gujarat
Shendra-Bidkin Industrial Park city near Aurangabad in Maharashtra
Global City in Gurgaon in Haryana
Integrated Industrial Township in Greater Noida
Integrated Industrial Township Vikram Udyogpuri near Ujjain in Madhya Pradesh

Official sources told FE. They said the required land for these cities has already been acquired. 
 
Interim budget 2014-15 had allocated R693 crore to the DMIC Project Implementation Trust (the nodal body for the project’s funding). This included R643 crore as grants

to the trust and R50 crore for an exhibition-cum convention centre in New Delhi as part of the project. In 2012-13, the actual plan allocation for the trust was R411.4 crore. The 2013-14 Budget had a plan allocation of R507.8 crore to the trust


The revised plan allocation to the trust in 2013-14 was Rs 303.81 crore.
Of the Rs 7,478 crore now being sought for this fiscal, Rs 3,000 crore each is to be used for development of the first phase of the Shendra-Bidkin Industrial Park and “activation area” in the Ahmedabad-Dholera SIR, the sources said. In the ‘activation area’, the plan is to build state-of-the-art infrastructure to “activate local commerce, enhance foreign investments and attain sustainable development”, they added.

Around Rs 750 crore has been sought for the Global City in Gurgaon, while Rs 617 crore will be needed for the development of Integrated Industrial Township in Greater Noida and Rs 59.5 crore for the Madhya Pradesh Vikramaditya Knowledge City, part of the project planned in Ujjain.
Elaborating on the plans, the sources said leveraging the Rs 617 crore meant for the Greater Noida township alone is estimated to help get funding of up to Rs 33,000 crore, adding that similarly the total outlay sought of Rs 7,478 crore can be leveraged to get huge finances for the townships envisaged, leading to massive employment.


The DMIC Trust, which manages the funds, already has with it Rs 621 crore, the sources said, adding that an additional Rs 7,478 crore is needed to meet the total funding requirement of Rs 8,099 crore to create the trunk infrastructure projects for a total of 11 projects including the five townships being built in the current phase of DMIC.

The six projects additional to the townships to benefit from the proposed budget outlay are:

Integrated Multi-Modal Logistic Hub (IMLH) in Rewari (Haryana) (Rs 450-crore)
Development of DMIC Development Corporation’s Neemrana Solar Power in Rajasthan (Rs 22.3-crore)
Pithampur Jal Prabandhan in Madhya Pradesh (Rs 21-crore)
Logistic Data Bank (Rs 37.2-crore)
Rail line between Bhimnath and Dholera (Rs 24-crore)
Desalination water project at Dahej in Gujarat (Rs 117-crore)


India and Japan had agreed on a $9-billion fund with equal contribution from both sides as initial investment in DMIC. The Indian government’s contribution is in the form of budgetary grant, while Japan is to give a combination of untied loans in the form of official development assistance and tied aid through special terms of economic partnership (STEP) loans.

The Japanese government, in a bid to expedite the DMIC project, is learnt to have agreed to relax the conditions for its STEP loan following the finance ministry’s concerns that the clause specifying that 30% of goods and services for DMIC projects should be from Japanese companies would result in bids being not competitive. To ensure more non-Japanese firms bid for the project, it may be specified that 30% of goods and services could also be sourced from joint ventures in India in which Japanese companies have a shareholding of 10% or more.

The DMIC is to come up on both sides of the Western Dedicated Freight Corridor. It will pass through six states — Rajasthan, Gujarat, Maharashtra, Haryana, Uttar Pradesh and Madhya Pradesh.

The corridor’s development is expected to better the lives of around 180 million people including the creation of skilled workforce and generation of gainful employment to them, besides boosting manufacturing, revenues and growth. The DMIC project is a crucial link to the National Manufacturing Policy that aims to increase the share of manufacturing in the GDP to
help get funding of up to Rs 33,000 crore, adding that similarly the total outlay sought of Rs 7,478 crore can be leveraged to get huge finances for the townships envisaged, leading to massive employment.

India seeks Qatar investment for industrial corridor

MoS (commerce) E.M.S. Natchiappan lists Amritsar-Kolkata, Kochi-Chennai and Kolkata-Chennai corridors as investment avenues for Qatar 

 

New Delhi : India on Tuesday urged cash-rich Qatar to invest in India’s flagship $90 billion Delhi-Mumbai industrial corridor and other similar projects in the country. 

 

Speaking at an event organized by Confederation of Indian Industry (CII) in New Delhi, minister of state for commerce E.M.S. Natchiappan listed the Amritsar-Kolkata corridor, the proposed Kochi-Chennai and Kolkata-Chennai corridors as projects that could be attractive investment opportunities for Qatar. 

 

“For all these we will need huge investment,” the minister said. 

 

According to Indian officials, India has handed over a list of projects, specially in the oil and gas sector for possible investment to the Qatari side. They, however, declined to give further details. “We have sought investment in this area. Let’s see how the talks progress,” one of the officials said.

India is looking at attracting up to $1 trillion in investments from countries with surplus funds like Qatar and Saudi Arabia into various areas of infrastructure such as roads, ports and railways between 2012 and 2017.

 

Cabinet approves Amritsar-Kolkata Industrial Corridor project

The government today approved the Amritsar-Kolkata Industrial Corridor (AKIC) project, which seeks to boost the manufacturing sector in the country.

The project was proposed to be developed in a band of 150- 200 km on either side of Eastern Dedicated Freight Corridor in a phased manner.

The project is the second of its kind on the lines of the Delhi-Mumbai Industrial Corridor. It will be spread across 20 cities in seven states -- Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal.

A financial indicative commitment of about Rs 5,600 crore, spread over 15 years, by way of budgetary support from the central government has been estimated in the first pilot phase for setting up seven IMCs in the AKIC, it said.

"Phase-1 will be in the nature of a pilot project, during which at least one Integrated Manufacturing Cluster (IMC) of 10 square km each, in each of the seven states would be set up, as identified by state governments," an official statement said, adding, the Cabinet also approved setting up of AKIC Development Corporation (AKICDC).

The states would however, it said, be free to set up more than one IMC, if they choose to do so.

"Uttarakhand, being a hill state would be given flexibility with regard to the size of the cluster. Both brownfield as well as greenfield IMCs can be set up," it said.

About 40 per cent of the land in each cluster will be permanently earmarked for manufacturing and agro-processing, considering that substantial part of the area in these states, except Jharkhand, is under agriculture.

The clusters envisaged under the project would be entitled to all the benefits available under the National Manufacturing Policy (NMP) 2011.

It also said that for infrastructure development, a PPP mode would be encouraged.

"While viability gap funding would be available for infrastructure amenable to PPP, trunk infrastructure not amenable to PPP will be developed through grant-in-aid from the central government," the statement said.

Further, the government will provide interest subsidy to states for land acquisition, grant-in-aid for project development and master planning of clusters, set up AKICDC, provide external connectivity and all benefits under NMP.

The Cabinet also approved that AKICDC will be set up immediately with a total equity base of Rs 100 crore, with 49 per cent stake of the central government, with balance equity to be taken by stakeholder state Governments as per option and willingness, and HUDCO.

The central government will also provide Rs 100 crore as project development fund to AKICDC.