The Telegraph
Monday , June 30 , 2014
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Easy route for industry hub permits

New Delhi, June 29: The Narendra Modi-government is planning a single-window clearance cell for investors in the proposed mega industrial zones along the Delhi-Mumbai industrial corridor.

All central and state permits required by an investor will be approved at this one-stop facility, which will cut red tape and reduce delays in clearances.

The aim is to funnel foreign and Indian investments into the six industrial regions, to be set up at a cost of $90 billion.

The zones are expected to attract more than half of the foreign direct investment (FDI) into India. FDI inflows had dropped to $36.4 billion in 2013-14 from an all-time high of $46.6 billion in 2011-12.

The proposed industrial zones will be the basis of India’s National Manufacturing Policy.

The regions will have world-class infrastructure facilities and cover states and even groups of states — Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.

Several big Japanese groups such as Suzuki, Mitsubishi, Toshiba, Mitsui and Kansai are anchor clients of these zones.

The government wants to avoid land acquisition controversies, which engulfed special economic zones (SEZs), in these giant enclaves. The decision to buy land and set up industry within a zone will rest with companies.

Government officials consider these zones as a “better copy of the Chinese model”. China’s special economic zones comprise whole districts and in one case — Hainan — a whole province.

The National Manufacturing Policy is being reworked as the government feels the earlier stress on services has diluted the role of manufacturing, which is seen as a bigger creator of jobs. The goal is to step up the share of manufacturing to at least 25 per cent of GDP (gross domestic product) from 15 per cent.

A suggestion by the industry ministry to give these industrial enclaves the authority to waive all clearances, as in Chinese SEZs, had been turned down because of objections from other ministries and legal experts.

Plans are now afoot to give the single-window clearance at the central level to any business set up within the enclaves.

Currently, a business has to take an average 38 permissions from different agencies to set up a factory.

Officials said the idea of special investment regions had come from a group of non-resident Indian CEOs who had floated the concept in 2004 when the Manmohan Singh-government came to power.

However, the scheme with suitable modifications, will now be rolled out by the Modi government.

The proposal had faced political opposition when the previous Congress government tried to use it to set up a string of petrochemical and chemical investment regions — or chemical hubs — in coastal states.

The controversies over SEZs convinced the government that it should avoid land acquisition and giving special tax sops. The industry ministry, officials say, is still pushing for tax holidays to kickstart the regions.

“The real idea is to create zones that will house manufacturers who can feed off each other, share facilities and trim costs. The main giveaway from the government will be concentrated spending on world class infrastructure,” said officials.

The infrastructure will include full global connectivity such as international airports, sea and land ports, dedicated rail and highway corridors, networked cities and high-speed data access.

These facilities will make these areas attractive to investors, just as the development of southern China has made the economic region the most sought after investment destination in the world.