The cabinet on Monday cleared the Amritsar-Kolkata Industrial Corridor (AKIC) in a band of 150-200 km on either side of the Eastern Dedicated Freight Corridor. The project, on the lines of the Delhi-Mumbai Industrial Corridor (DMIC), will boost manufacturing units and agro-processing plants in the region.
The Cabinet Committee on Economic Affairs approved a proposal for a $4.5-billion special loan from Japan for DMIC, said an official statement.
According to the Cabinet decision, an AKIC development corporation will be set up immediately, with an equity base of Rs 100 crore. While the Centre will hold 49 per cent stake in the entity, the rest will be owned by the state governments concerned and Housing and Urban Development Corporation. The Centre will provide a project development fund of Rs 100 crore to the corporation.
AKIC would be implemented in a phased manner and would comprise a belt of at least 550,000 square km across Punjab, Haryana, Uttarakhand, Uttar Pradesh, Bihar, Jharkhand and West Bengal, an official statement said.
The first phase of the project will be in a pilot project, during which at least one integrated manufacturing cluster of 10 sq km in each of the seven states will be set up. For this phase, financial commitment of about Rs 5,600 crore will be provided by the Centre, through budgetary support spread through 15 years.
The manufacturing clusters will be identified by the state governments. States will be free to set up more than one such cluster. At least 40 per cent of the land in each cluster will be permanently earmarked for manufacturing and agro-processing, as a substantial area in these states, except Jharkhand, is under agriculture.
The manufacturing clusters envisaged under the project will be entitled to all the benefits available under the National Manufacturing Policy, 2011, with some riders.
For infrastructure development, a public-private partnership mode will be encouraged. The Centre will provide interest subsidy to states for land acquisition, grant-in-aid for project development, master planning of the manufacturing clusters, etc. It will also help state governments promote global investment in these clusters.
State governments will be responsible for ensuring availability of land for the clusters, providing the road infrastructure required, facilitating generation, transmission and distribution of electricity, putting in place a single-window clearance mechanism, etc.
For coordination of projects and inter-state activity, a three-tier institutional structure at the central level will be set up. This will comprise an apex monitoring authority under the commerce & industry minister, an inter-ministerial group under the secretary in the Department of Industrial Policy and Promotion, and the AKIC development corporation.
For DMIC, funds will be provided by Japan International Cooperation Agency, through special terms for economic partnership (STEP) loans. The conditions for the loan say 30 per cent of the goods to be sourced from Japan can be procured from local companies in India in which Japanese companies hold equity of at least 10 per cent.
The official development assistance loan under the STEP scheme is available at interest of 0.1 per cent for a repayment period of 40 years. The scheme provides for a moratorium of 10 years.