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Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC)

Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC). Department of Industrial Policy & Promotion Government of India. Introduction. Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) proposed using Eastern Dedicated Freight Corridor (EDFC) as the backbone.

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Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC)

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  1. Amritsar-Delhi-KolkataIndustrial Corridor (ADKIC) Department of Industrial Policy & Promotion Government of India

  2. Introduction • Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) proposed using Eastern Dedicated Freight Corridor (EDFC) as the backbone. • EDFC traverses 1839 km in 6 States of Punjab, Haryana, UP, Bihar, Jharkhand & West Bengal. ADKIC will include Uttarakhandalso. • ADKIC will cover 20 cities in these seven States.

  3. Inter-Ministerial Group • Inter-Ministerial Group constituted in June 2013 comprising key Central Ministries/Authorities: • Secretary, DIPPChairman • Secretary, Planning Commission • Secretary, DEA • Secretary, Ministry of Urban Development • Secretary, Ministry of Road Transport & Highways • Secretary, Ministry of Shipping • Chairman, Railway Board • Chairman, Inland Waterways Authority of India

  4. Inter-Ministerial Group (contd…) • Terms of Reference • Assess the feasibility of setting up ADKIC. • Recommend structural & financial arrangements for its operationalization. • IMG held three meetings. States also consulted. Final Report sent to PMO on 30.7.13.

  5. Need for ADKIC • Growth is necessary for: • Inclusion; • Imperative for providing jobs; and • Addressing Trade Deficit. • “Manufacturing has to be the backbone of our growth strategy over the next decade…. If we have to grow at 8-9% in the future, this has to come through sustained growth in manufacturing, particularly labour-intensive manufacturing. Manufacturing & manufacturing alone can absorb all those who need better livelihood opportunities.” (PM’s address). .

  6. Adkic: concept • ADKIC to be developed using EDFC as backbone in a band of 150-200 kms on either side of EDFC, in a phased manner • In Phase-1, one Integrated Manufacturing Cluster (IMC) of 10 sqKm each to be developed in each of 7 States. • 40% land in IMC to be permanently earmarked for manufacturing and agro processing. • IMC could be greenfield or brownfield with an Anchor Industry in each cluster. • PPP mode will be encouraged for development of infrastructure. Non-PPP able trunk infrastructure to be developed through grant-in-aid. • Clusters to be organised in a way so as to take advantage of National Manufacturing Policy (NMP), 2011

  7. Rationale for ADKIC: Growth • Since 2004-05, periods of high GDP growth coincided with periods of high manufacturing growth.

  8. Rationale for ADKIC: Employment • To harness demographic dividend by providing quality jobs. Agriculture can not be expected to provide more jobs whereas service sector has low employment generation.

  9. Rationale for ADKIC: Trade balance • Trade deficit high at $73.4 billion (April-August, 2013-14). Export growth is best promoted by export of manufacturing goods particularly hi-tech goods. Internationally countries with high trade surplus are also countries having robust manufacturing base.

  10. Rationale for ADKIC: Share of Manufacturing in State GDP • Contribution of Manufacturing to State GDP (2011-12)

  11. Objectives of ADKIC • Optimise present economic & employment potential of the region. • Stimulate investments particularly in manufacturing & export oriented units. • Promote overall economic development of the area through creation of high standard infrastructure & an enabling pro-business environment. • Leverage Highway System & National Waterway (NW)-I.

  12. Adkic: Approach • Implementation in a phased manner as region primarily agricultural & thickly populated. • Cluster approach to be followed. In Phase-1, each State to set up at least one Integrated Manufacturing Cluster (IMC). • Anchor industry to be promoted in each Cluster. • Clusters to be connected to junction points on EDFC/river ports.

  13. Problems Being Faced By Manufacturing • Land • Labour • Capital • Environment Clearances • Infrastructure • Skill Development • Business Environment.

  14. Addressing The Challenges: Land • Considering high cost involved, interest subvention of 4%, over a period of 15 years, proposed on loans that may be taken by State Governments for land acquisition, subject to a ceiling of Rs. 20 crore per cluster, per annum. • Interest subvention to be available for land to be acquired within one year of grant of in-principle approval for clusters. • Final approval for cluster to be considered after SPV obtains possession of at least 75% of the land for cluster.

  15. Addressing The Challenges: Land (contd…) • Land to be vested with SPV (Implementing Agency) in which State Government will have majority stake. • Resettlement & Rehabilitation to be undertaken by States in terms of provisions of Land Acquisition Act.

  16. Addressing The Challenges: Labour • Powers of inspection & enforcement of labour laws to be delegated to CEO of SPV who shall be a Government official. • Common and simplified formats applicable for 13 central labourrelated laws have been developed. • Exit policy: proposal to insert new section 25FFF(1C) in Industrial Disputes Act extending provisions available to ‘mining’ to manufacturing sector – final decision to be taken by MoLE. • Low cost housing for workers in clusters proposed with focus on use of public transport.

  17. Addressing The Challenges: capital • Relief from Capital Gains Tax on sale of plant & machinery of a unit located in IMC in case of re-investment within a period of three years for purchase of new plant & machinery in any IMC. • Relief on sale of residential property for reinvestment in equity of a new start-up SME manufacturing unit for purchase of new plant and machinery. • Tax pass through for venture capital funds focusing on SME in manufacturing.

  18. Addressing The Challenges: capital (contd…) • Investment by insurance companies in Venture Capital Funds with a focus on SMEs in the manufacturing sector. • Creation of a separate fund with SIDBI using the shortfalls against MSE credit targets for commercial banks. • Stock exchange for SMEs- 2 SME exchanges launched in Mumbai.

  19. Addressing The Challenges: Environment • IMC to be granted highest inter-se priority for Environment Impact Assessment (EIA). • Individual units within IMC to be exempted from public hearing once IMC is cleared. • Full delegation of powers under Air Act, Water Act and Environment Protection Act (EPA) to officers of SPCB deputed to a IMC. • Combined application form and a common register for consents and authorizations under Air Act, Water Act and the EP Act. • Advisory issued by MoEF to States for third party inspection, combined consent authorization, designated officers be applicable for IMC.

  20. Addressing The Challenges: Infrastructure Development External • Connectivity to be provided by: Railway, Inland Waterway, MoRT&H. • Power: State Governments to facilitate creation of captive power plants by private players with full authority for generation, transmission & distribution; & allow open access to units as per regulations of SERC. • Water: State Governments to allocate surface water from viable sources for IMC. IMC to be enabled to have/own facilities for tapping/extraction, treatment and distribution of water.

  21. Addressing The Challenges: Infrastructure Development (Contd…) Internal • For development of trunk infrastructure grant of Rs. 40 lakhs per hectare proposed with incentive of additional Rs.10 lakhs per hectare for completion within 3 years. • Viability gap funding would be available for infrastructure activity under PPP. • States expected to provide necessary spurs in road infrastructure.

  22. Addressing The Challenges: Skill Development • In a IMC, the SPV to undertake skill up gradation in co-ordination with National Skill Development Corporation (NSDC). • A weighted standard deduction of 150% of the expenditure (other than land or building) incurred on PPP projects for skill development in manufacturing sector in separate facilities in coordination with NSDC. • Funding the cost of placement cells in an ITI set up in IMC for the first five years. • Viability Gap Funding (VGF) to Polytechnics and SPV for covering the capital costs.

  23. Addressing The Challenges: Business environment • Implementing Agency to be empowered as per law, to exercise planning, development and municipal functions within the clusters. CEO of SPV to be a Government official. • State Governments to facilitate single window clearances for all State level & below clearances related to setting up of IMC. Rajasthan, Andhra Pradesh and Tamil Nadu have already set up such a facility.

  24. Addressing The Challenges: Business environment (contd…) • ADKICDC to: • Get Perspective Plans & Master Plans prepared and identify & develop projects. • Arrange for professional inputs for risk management, project structuring, project appraisal. • Bid process management and project management. • Act as the Project Development Partner or Knowledge Partner to all SPVs and State Government agencies.

  25. Feasibility of ADKIC • Prima facie ADKIC will be feasible if development of supporting infrastructure in catchment area proceeds as planned, States meet commitments & financial & structural arrangements recommended by IMG are accepted & implemented. • State Government will undertake feasibility study for each proposed cluster before final approval is accorded. • Perspective Plan for the area under ADKIC would be included as part of World Bank Study, already underway.

  26. Institutional Structure for ADKIC

  27. Institutional Structure at Centre Level • An Apex Monitoring Authority, under Union Minister for Commerce & Industry, for overall guidance, planning & approvals, setting up of timelines for implementation & monitoring. • An Inter-Ministerial Group chaired by SIPP to appraise proposals for grant of in-principle approval & final approval for Clusters & NIMZs. • A Dedicated Agency (DA) to be set up by Government of India as a corporate entity, on lines of Delhi Mumbai Industrial Corridor Development Corporation i.e. ADKICDC.

  28. Institutional Structure at State level • At State level, a dedicated cell to be set up under Chief Secretary/ Industrial Development Commissioner. • At Cluster level, a Nodal Agency to be set up by State Governments for administration of clusters- preferably an SPV or existing State Institution. • Implementing Agencies to be empowered to exercise planning, development & municipal functions. • CEO of SPV to be Government Official.

  29. Approval Process for IMC • Two-Stage process: • “In principle” approval - Inter-Ministerial Group under Secretary DIPP recommends & CIM approves. • “ Final approval” - after SPV obtains 75% land for IMC & fulfils other conditions. Inter-ministerial Group appraises, CIM and FM recommend, CCEA approves.

  30. Financial Arrangements for ADKIC

  31. Financial Implication: Phase-1 For 7 IMCs of 10 sq km each: A. Central assistance to State Governments • Interest subsidy (at 4% on loans for land acquisition ): Rs. 2100 crore. • Grant for trunk infrastructure development (Rs. 40 lakh per hectare with Rs. 10 lakhs per hectare for timely completion) : Rs. 3500 crore. B. ADKIC Development Corporation • GoI’sshare in ADKICDC (upto 49%): Rs. 49 crore. • Initial grant to ADKICDC for project development: Rs. 100 crore. Total maximum financial commitment of Central Government in 1st Phase:Rs. 5749 crore, over 15 years for 7 IMCs, one in each State.

  32. Other Financial Implications • Financial Implication for External Connectivity in ADKIC to be separately accounted for by the sponsoring agencies (ref. slide 19). • For infrastructure activity under PPP, viability gap funding would be available. • All incentives available under various Central and State Schemes to converge in IMCs.

  33. Year-wise Requirement of Funds • ADKICDC: • Equity Requirement (2013-14): uptoRs. 49 crore (total equity of Rs.100 crore). • Project Development Fund (Rs. 100 crore): • 2013-14: Rs. 10 crore • 2014-15: Rs. 40 crore • 2015-16: Rs. 50 crore • Infrastructure development: Fund requirement from 2014-15 over next 3 to 5 years. • Interest Subsidy on loans for land acquisition: Fund requirement from 2014-15 over next 15 years. • External connectivity demand to start from 2014-15. Financial Requirement in 2013-14 would be Rs. 59 crore

  34. Role of Government of India • Set up ADKICDC (Amritsar-Delhi-Kolkata Industrial Corridor Development Corporation). • Provide Grant-in-aid for project development, master planning of IMCs & non-PPP infrastructure. • Provide interest subsidy for long term loans for land acquisition taken from financial institutions. • Provide Viability Gap Funding for PPP Projects. • Extend all benefits & incentives under National Manufacturing Policy & other applicable Central Government Schemes.

  35. Role of Government of India (Contd…) • Promote domestic and global investments in Clusters along with State Government. • Nominate (by Ministry of HRD) a National level Technical Institution (IITs/NITs) for technology partnership in every cluster. • External Connectivity. • Provide tool room in every Cluster. • Grant ‘in-principle’ & final approval for clusters.

  36. Role of State Governments • Provide land for development of Clusters. • Bear cost of resettlement & rehabilitation package for owners of acquired lands, if any. • Facilitate creation of captive power plants by private players with full authority for generation, transmission & distribution; allow open access to units as per regulations of SERC. • Facilitate availability of water in IMC for industrial & housing activities.

  37. Role of State Governments (Contd...) • Facilitate single window clearances for all State level & below clearances related to setting up of IMC. • Identify & facilitate anchor industries in IMC. • Ensure benefits of pecuniary externalities flow equitably to State Government, SPVs, Clusters.

  38. Role of SPV • Master planning of cluster. • Preparation of a strategy for development of the cluster & an action plan for self-regulation. • Selection of Developer/Co-developers for development & maintenance of infrastructure internal to the cluster. • Formulation of rules and procedures for development, operation, regulation and management of cluster. • Obtaining prior environmental clearance. • Promotion of investment both foreign & domestic, in the cluster.

  39. Role of SPV (Contd….) • Instituting arrangement with State Government for levy of user or service charges or fees or rent for use of infrastructure/properties in the cluster. • Implementation of Resettlement & Rehabilitation package. • Providing built up work places & low cost housing for new units & their workers. • State Government to have majority share in SPV & balance could be held by Central Government, Financial Institutions, Industrial Stakeholders etc.

  40. Way forward • Obtain in-principle approval of Union Cabinet on approach to ADKIC including proposal for formation of ADKICDC by 30.10.2013. • Set up dedicated cell in State Governments by 30.10.2013. • State Governments to submit proposals for in-principle approval to GoI by 31.12.2013. • Formation of Cluster SPV by 28.2.2014. • Set up ADKICDC by 31.12.2013. • Commitment of Funds for the project.

  41. Thank You

  42. LUDHIANA PUNJAB AMBALA UTTARAKHAND LEGEND SAHARANPUR TIBET EXISTING LINE DFC LINE (PARALLEL) (EXISTING STNS. HARYANA MEERUT APL-3 HAPUR NEPAL KHURJA ALIGARH HATHRAS TUNDLA UTTAR PRADESH RAJASTHAN ETAWAH BHAUPUR APL-1 KANPUR PREMPUR BIHAR ALLAHABAD NEW GANJKHWAJA MUGHALSARAI NEW KARWANDIYA BANGLADESH APL-2 SONNAGAR PPP Railway Funded JHARKHAND MADHYA PRADESH WEST BENGAL CHHATISGARH DANKUNI Back

  43. National Waterway-1 Back

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