Amritsar-Delhi-Kolkata Industrial Corridor : Neoliberal “development” in the Indian heartland

November 1, 2013

By Partho Sarathi Ray

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The Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) is till date possibly the largest project of the Government of India being proposed for what is being claimed as “industrial development” of the entire northern and eastern part of the country. Being called as the “Eastern Corridor.” The proposal is based on developing a 150-200 km wide “industrial corridor” using the Eastern Dedicated Freight Corridor (EDFC) of the Indian Railways, spanning from Ludhiana in Punjab to Dankuni in West Bengal, as the backbone, and covering seven states: Punjab, Haryana, Uttarakhand, UP, Bihar, Jharkhand and West Bengal.

The ADKIC is proposed to span on both sides of the EDFC, covering 20 cities in these seven states. This region is therefore also proposed to include the two national arteries, the National Highway 1 (GT Road) and the National Waterway 1 (Ganga-Bhagirathi-Hooghly). In the first phase, one Integrated Manufacturing Cluster (IMC) covering 10 sq km (1000 hectares or 2500 acres) is proposed to be set up in each of the seven states, which is then going to act as the anchor for the further development of the industrial corridor in that state. Although the plan is specifically to promote the development of the manufacturing sector industries, the plan document states that only 40% land in each IMC is to be earmarked for manufacturing and agro-processing industries, the rest 60% will most probably go for real estate development or IT/service sector industries. Public Private Partnership (PPP) mode will be followed for development of infrastructure in the IMCs. The IMCs will be under a Special Purpose Vehicle (SPV) in which the state government will be the majority stakeholder. Land acquisition will be done by the state governments and loans at a low interest rate for this purpose will be provided by the central government.

Therefore, what this proposal for the ADKIC entails is land acquisition on an unprecedented scale in the most densely populated and intensively cultivated region of the country, and handing over of national resources, in the form of land, railways, roadways and waterways, to private corporations on a truly massive scale. The scale that is being envisioned will make the SEZs seem like child’s play. And all of this planning, which is being done for a project that might fundamentally change the economy of the entire Indian heartland, affecting the lives and livelihoods of a majority of the country’s inhabitants, is being done in an atmosphere of secrecy, with no public consultations or discussions till date.

Already, in June 2013, an Inter-ministerial group (IMG) comprising of secretaries of departments of industrial policy and promotion (chairman), planning commission, external affairs, urban development, road transport and highways, ministry of shipping and the chairpersons of the Railway Board and Inland Waterways Authority of India had been formed. This group was designated to assess the feasibility of setting up the ADKIC and recommend structural and functional arrangements for its operationalization. It is significant to note that the IMG, which was created to study the feasibility of a project with the greatest possible impact on agriculture and the environment, did not have any representatives from the ministry of agriculture or from the ministry of environment and forests. The IMG held three meetings and also consulted and obtained feedback from the concerned state governments, which includes governments such as that of the Trinamool Congress in West Bengal, which is supposedly against land acquisition by the state. Based on these deliberations and consultations, the IMG has sent the final report to the PMO on 30th July, 2013, recommending the establishment of the ADKIC and providing details of its proposed structure and functionalization. Because this report somehow reached outside the corridors of power, we are able to know about the details of this humongous scheme.

The report first provides the rationale for developing the ADKIC, suggesting that high growth rate in the manufacturing sector coincided with high GDP growth rate, employment generation is not possible in agriculture and is limited in the services sector, India has a negative overall trade balance of 195 billion USD (import over exports) and of 8.2 billion USD in manufactured goods, and the share of manufacturing to the state GDP is quite low in the northern and eastern states, ranging from 26% in Uttarakhand to 5% in Bihar. These provides the rationale for developing the ADKIC with the stated objectives of stimulating investment, particularly in manufacturing and export-oriented units, developing employment and economic potential of the region through creation of “high standard infrastructure and an enabling pro-business environment” and also to leverage the existing highway and waterway systems. From these objectives, this seems to be a rehashing of the SEZ concept, just on a larger and more concentrated form, and envisaging, besides land, also the appropriation of waterway and roadways for corporate interests this time.

The report identifies the problems being faced by manufacturing and enumerates them as land, labour, capital, environmental clearances, infrastructure, skill development and business environment. It then goes on to suggest the ways in which ADKIC will address these issues. On the issue of land it recommends that the respective state governments will acquire the land through the SPV which will be the implementing agency for each cluster, with loans on easy terms from the central government. Powers of inspection and enforcement of the labour laws will also lie with the CEO of the SPV, who is supposed to be a government official, but who can be expected to be subservient to corporate interests. “Common and simplified” formats for 13 central labour-related laws have been developed, which suggests that the provisions in these laws have been made more business friendly.

For capital generation, it suggests a number of tax relief measures for sale of fixed assets for reinvestment in the manufacturing clusters and recommends investment by insurance companies in venture capital funds with a focus on manufacturing industries. On environmental issues, it recommends that the highest priority is given to the IMCs for Environmental Impact Assessment (EIA) and once an IMC has received clearance after EIA, individual units within the IMC are exempted from public hearings for EIA. This means that the possibility of public intervention over the nature of industries being set up in the IMCs will be further eroded, with no public oversight on the environmental impact of individual industries. For infrastructural issues such as power and water, the report recommends that the state governments facilitate the creation of captive power plants by private players with full authority for generation, transmission and distribution and allow open access to units. For water, the state governments are supposed to allocate surface water from all viable resources to the IMCs and the IMCs will have their own facilities for tapping, extraction, treatment and distribution of the water. With these IMCs being proposed in the most densely populated and intensively cultivated areas of the country, where scientific studies have already shown a massive depletion of ground water (the GRACE satellite observations), this sort of transfer of water and power resources to industries can be expected to play havoc with agriculture and the lives of people in the entire region.

Therefore, overall the plan for creation of the ADKIC seems to be yet another grandiose scheme of the Indian government to force neoliberal “development” down the throats of the people of the country. After the failure of the “export-oriented” SEZ scheme due to economic non-viability and peoples’ resistance, the government seems to have taken up the “corridor” approach in focused areas of the country. The establishment of the Mumbai Delhi Industrial Corridor (MDIC) in western India has already gone ahead, and now comes the plan for the ADKIC for northern and eastern India. Interestingly, the very states in which the ADKIC is being planned are the ones in which SEZs have not been established in large numbers due to various reasons: due to complex caste-based politics in Bihar and UP, and due to resistance in Jharkhand and Bengal (see The Political Geography of SEZs in India). The sheer scale at which such “corridor”-based schemes are being planned, disregarding economic, environmental and social concerns, is mindboggling. Possibly very few will dispute the requirement for manufacturing industries for industrial development and employment generation, but that should not be done at the cost of wholesale diversion of agricultural land and other resources and should be done based on local economic needs.

What role the state governments have played in this planning process is also not clear, although the state governments are supposed to be the major facilitator and implementer of the projects. From the report it seems that the state governments have been consulted and have given their approval for the IMCs, and it would be interesting to find out what state governments such as that of the TMC in West Bengal, which supposedly opposes SEZs and land acquisition by the government, has to say on this matter. Moreover, the experience with the SEZs have been that although the purported focus was manufacturing and export-oriented industries, most of the land was used for real estate development and setting up of service sector industries. Currently, 66% of the SEZs are in the IT/ITES sector. With an allocation of 60% land in the IMCs for non-manufacturing purposes, the same thing might be repeated for the ADKIC. Lastly, even if development of manufacturing industries are being envisaged, we should resist the establishment of super-exploitative manufacturing clusters on the lines of Thirupur in Coimbatore or Gurgaon near Delhi, which have already shown declining working conditions, high level of contractualization of labour and resultant labour unrest, met by severe repression by the governments and the corporations, as seen in the case of the Maruti-Suzuki Manesar plant. The ADKIC has the potential of generalization of these conditions over all of northern and eastern India, together with massive economic, social and environmental costs to the people.

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