Union Budget 2024 has a plan to develop twelve new industrial parks under the National Industrial Corridor Development programme
- These parks will be equipped with complete infrastructure and ‘plug and play’ parks will be sanctioned in or near 100 cities
About Industrial Park
- An industrial park is an area specifically zoned and planned for industrial development.
- Example: Dholera SEZ, Gujarat; Adani Mundra Special Economic Zone etc.
Significance of Industrial Park
- Industrial parks create job opportunities and encourage shared use of infrastructure, boosting productivity and competitiveness. They attract Foreign Direct Investment and stimulate growth in manufacturing activities.
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Plug and Play Industrial Parks:
- In the context of industrial development, “plug and play” refers to ready-to-use industrial parks that come equipped with essential infrastructure such as buildings, power, water, sewage connectivity, and road access.
- These parks are designed to attract investments by providing a high-quality, sustainable environment for industries.
- These parks boost manufacturing by providing complete infrastructure, allowing businesses to set up quickly without extensive setup time or extra investment in basic facilities.
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- Some of the benefits of industrial parks include integrated infrastructure, cost savings, and localised environmental controls.
- Overall, they contribute to regional economic development by stimulating local industries and creating a conducive environment for business expansion.
National Industrial Corridor Development Programme
- About: The National Industrial Corridor Development Programme is Centre’s infrastructure programme to new industrial cities as “Smart Cities”, equipped with new technologies.
- This programme aims to develop a series of industrial corridors across the country to promote manufacturing and create job opportunities.
- These corridors are intended to act as a catalyst for the development of manufacturing and service sectors, thereby generating employment opportunities and boosting economic growth.
- Examples: The oldest such corridors are Delhi Mumbai Industrial Corridor (DMIC) and Western Dedicated Freight Corridor, which are India’s transportation backbone.
- Funding: Government of India, through National Industrial Corridor Development & Implementation Trust (NICDIT), provides funds as equity/debt for the development of world-class trunk infrastructure.
- The NICDIT is a government agency responsible for coordinating and monitoring the development of industrial corridors in India.
- It aims to establish greenfield smart industrial cities with sustainable, plug-and-play, and ICT-enabled utilities.
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About Industrial Park Rating System (IPRS)
- The Industrial Park Rating System (IPRS) is an initiative aimed at enhancing industrial competitiveness in India.
- Background: IPRS was launched as part of the Atmanirbhar Bharat Abhiyan (Self-Reliant India Campaign) to promote local economic growth and attract investments in the manufacturing sector.
- Nodal Agency: The Department for Promotion of Industry and Internal Trade (DPIIT) is the nodal department responsible for the Industrial Park Rating System.
- Aim: The IPRS framework focuses on identifying enablers necessary for the development of industrial infrastructure across nominated parks in the country.
- Assessment Parameters: IPRS evaluates industrial parks based on four pillars:
- Internal Infrastructure and Utilities
- External Infrastructure and Connectivity
- Business Services and Facilities
- Environment and Safety Management
- These pillars are assessed across different parameters, which were finalised in collaboration with DPIIT and other stakeholders.
- Additionally, there are supplementary questions to gain insights into readiness and preparedness.
Challenges in the Implementation of Industrial Park
- Infrastructure Development: Industrial parks aim to align infrastructure provision with agglomeration economies to boost industrial growth. However, achieving this balance can be challenging.
- Regulatory Hurdles: Navigating bureaucratic procedures and regulatory requirements can delay the establishment and operation of industrial parks.
- Understanding the local political economy is one of the challenges for the implementation of Industrial Parks
- Land Acquisition: Acquiring suitable land for industrial parks can be challenging due to the need to negotiate with landowners, address property disputes, and manage environmental and legal concerns, which can hinder the development process.
- Negative Spillovers: Sometimes, industrial parks generate negative spillover effects. These could include environmental pollution, traffic congestion, or strain on local resources.
- Skill Shortages: Attracting and retaining a skilled workforce may be difficult, impacting the productivity and growth of businesses within the park.
- Underutilization: Some industrial parks remain underutilised due to various reasons—lack of demand, inadequate marketing, or unfavourable business conditions.
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Conclusion
The 2024 Budget’s initiative to develop industrial parks aims to boost regional growth, attract investment, and enhance manufacturing capabilities. To succeed, focused efforts are needed in infrastructure development and regulatory streamlining to maximise the benefits of this expansion.
July 25, 2024
