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.
