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DIPP moots unified industrial corridor body
The Financial Express, 5 Sept 2014, New Delhi: The department of industrial policy and promotion (DIPP) will circulate a Cabinet note next week seeking the views of all ministries concerned on a proposal for a new law — the National Industrial Corridor Authority (NICA) Act — on the lines of the National Highways Authority of India (NHAI) Act.
The Pune-headquartered NICA was proposed in Budget 2014-15 by
finance minister Arun Jaitley to coordinate
the development of industrial/economic corridors. These include the Delhi-Mumbai Industrial Corridor (DMIC), Amritsar-Kolkata Industrial Corridor, Chennai-Bangalore Industrial Corridor, Bangalore-Mumbai Economic Corridor and the Vizag-Chennai corridor. DIPP is the nodal government body to formulate policies such corridors.
A separate legislation is to give certainty to foreign investors, including multilateral funding agencies such as the Asian Development Bank (backing the Vizag-Chennai corridor) and government agencies such as Japan Bank for International Cooperation and Japan International Cooperation Agency (supporting DMIC), official sources told FE. Many states have also supported the idea, they said, adding that NICA will have representatives from state governments, industry, funding agencies and central government ministries.
The proposed NICA will subsume the DMIC Project Implementation Trust and the DMIC Development Corporation (implementing the DMIC project) and the funds received by DMIC. The NICA will then have a common pool of funds to be allocated to different corridors as per their needs. Though the Budget proposed an initial corpus of only Rs 100 crore for NICA, this could be hiked to Rs 1,000 crore.
The proposed Act will define ‘industrial corridors’ for the first time (it has neither been defined under any Act nor in the Constitution of India) and will include it under the Union List of the Constitution through an amendment.
Sources said Prime Minister Narendra Modi had sought a central body for ease of doing business, better coordination for government approvals as well as funding and faster implementation. Modi was against multiplicity of authorities slowing down the projects.
The urgency for a new Act is also because in the next three to four years, many of these corridors will reach the implementation stage and finalisation of equities/grants/loans (currently feasibility studies and finalising of masterplan/blueprint is going on).
Japan had already announced an assistance of $4.5 billion for DMIC, while India was to pitch in with an equal amount for the project. This amount will soon be used for all the corridors and therefore there will be changes in the structure of DMIC Trust and DMICDC, the sources said, adding.