Wednesday, February 20, 2008

Government Investment in Industrial Infrastructure Increases

by Phillip Horton

According to Kamal Nath, the Indian minister for Commerce and Industry, the government has invested funds amounting to rupees 14,000 crore in the building of industrial infrastructure. The investment comes under the industrial park scheme of the government of India. The minister provided this information while he was addressing his ministry at the Parliamentary Consultative Committee meeting last week. The minister also said in the meeting that the response for the scheme so far had been quite encouraging. Infrastructure developers who take advantage of the scheme qualify for exemption from income tax and this income tax exemption will be available for the developers for the ten years in a row out of total fifteen years.

The minister also said that the commerce and industry ministry is working towards improving its strategies in this regard and would come up with a more inclusive approach for developing the industrial infrastructure. Kamal Nath also added that the steps taken by the government so far to boost the development of industrial infrastructure such as the Industrial Infrastructure Upgradation Scheme or IIUS can be viewed as the successful and important government involvement.

The minister also pointed out the fact that as part of the IIUS’ infrastructure upgradation plans for the existing industrial clusters it has in hand as many as 25 projects which are being upgraded and out of these 25 projects five of the projects will soon be finished with upgradation work. The minister also hoped that the scheme will continue even in the 11th Five Year Plan with the needed changes; however the continuance of the scheme will also depend on its close evaluation. The participants at the meeting included Ram Singh Kaswan, Sudhangshu Seal, Shantaram Naik and others. Ashwani Kumar, the Minister of State for Industry along with Ajay Shankar, DIPP secretary, and G.K Pillai commerce secretary were also present at the meeting. Many members present at the meeting held that there more investment should go towards industrial infrastructure development so that a balanced industrial growth can be achieved, especially in the backward areas of the country.

Mr. Kamal Nath held that the main responsibility towards infrastructure development lies with the state governments and also the State Industrial Development Corporations. These entities should provide the essential infrastructure facilities to the industrial units by way of establishing industrial units in the self-sufficient geographical locations. Many of the state governments in India have established such industrial estates and there have been mixed results for such industrial estates in the different states of the nation.

The efforts that the state governments take are complemented by the central government by providing different schemes for developing the industrial infrastructure. One such initiative by the central government which the minister cited was that the central government created high impact and market driven nodes like the Integrated Investment Regions and industrial areas which will come up at the planned Delhi-Mumbai Rail Freight Corridor. The minister also added that these regions will be self sufficient industrial townships that will feature international standard infrastructure facilities.

 

 

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