UNIT-5

GOVERNMENT INITIATIVES

Startup India – A Government Initiative

Startup India Scheme is an initiative by the Government of India for
generation of employment and wealth creation. The goal of Startup India
is the development and innovation of products and services and
increasing the employment rate in India. Benefits of Startup India
Scheme is Simplification of Work, Finance support, Government
tenders, Networking opportunities. Startup India was launched by Prime
Minister Shri. Narendra Modi on 16th January 2016. Let us learn
more about
Benefits and Eligibility of Startup India.

Action Plan of Startup India Scheme

The action plan of Startup India is based on the following factors:

1. Simplification of Work

This initiative simplifies the work for the new entrants in order to motivate them.
This includes following steps taken by the government:

 Firstly, the government has set-up Startup India hubs where all the works
related to incorporation, registration, grievance handling, etc.

 Secondly, an application and an online portal is set-up by the government to

facilitate registration from anywhere and anytime.

 Thirdly, the patent acquisition and registration is now fast for the startups.

 Lastly, according to the Insolvency and Bankruptcy Bill, 2015 facilitates fast
winding up of the startups. A new startup can wind-up itself within 90 days of
the incorporation.

2. Finance Support

In order to motivate the startups, the government provides various

financial supports. These steps taken by the government are as follows:

The government has set up a corpus of Rs.10,000 crores for 4 years

(Rs.2500 crore each year). From such fund, the government invests in
various startups.

Special funds are provided, investment in which leads to exemption

from the income tax on the Capital Gain.
Income tax exemption is available for the startups for the first 3 years
after the incorporation.

Under The Income Tax Act, where a Startup (company) receives any consideration
for issue of shares which exceeds the Fair Market Value of the shares, such excess
consideration is taxable in the hands of the recipient as Income from Other Sources.
Investment by venture capital funds in Startups is exempted from the application of
this provision. The same extends to the investment made by incubators in the
Startups.

Benefits of Startup India

 Financial Benefits
 Income Tax Benefits
 Registration Benefits
 Government Tenders
 Huge Networking Opportunities

1. Financial Benefits

Most of the startups are patent based. It means they produce or provide
unique goods or services. In order to register their patents, they have to
incur a heavy cost which is known as the Patent Cost.

Under this scheme, the government provides 80% rebate on the patent
costs. Moreover, the process of patent registration and related is faster
for them. Also, the government pays the fees of the facilitator to obtain
the patent.

2. Income Tax Benefits

Startups enjoy a good amount of benefits under the Income Tax head.
The government exempts their 3 years income tax post the incorporation
year.

But they can avail it only after getting a certificate from the Inter-
Ministerial Board. Also, they can claim exemption from tax on Capital
Gains if they invest money in specified funds.
3. Registration Benefits

Everyone believes that incorporation and registration of business are far

more difficult than running it. It is because of the long and complex
steps of registration.

Under the Startup India scheme, an application is there to facilitate

registration. A single meeting is arranged to at the Start-up India hub.
Also, there is a single doubt and problem-solving window for them.

4. Government Tenders

Everyone seeks to acquire Government tenders because of high

payments and large projects. But it is not easy to acquire the government
tenders.

Under this scheme, the startups get priority in getting government

tenders. Also, they are not required to have any prior experience.

5. Huge Networking Opportunities

Networking Opportunities means the opportunity to meet with various

startup stakeholders at a particular place and time. The
government provides this opportunity by conducting 2 startups fests
annually (both at domestic as well as the international level).

Startup India scheme also provides Intellectual Property awareness

workshop and awareness.

Registration of the Startup can be done only from following types of

companies

1. Partnership Firm
 2. Limited Liability Partnership Firm
3. Private Limited Company

Eligibility for Registration under Startup India Scheme

1. Firstly, the company to be formed must be a private limited company

or a limited liability partnership
firm.
2. Secondly, the firms should have obtained approval from the
Department of Industrial Policy and Promotion.
3. Thirdly, it must have a recommendation letter by an incubation.
4. The firm must provide innovative schemes or products.
5. It should be a new firm or not older than five years.
6. The total turnover of the company should be not exceeding 25 crores.
7. Lastly, it should not be a result of splitting up, or reconstruction, of a
business already in existence.

Challenges faced by Startup India

1. People generally believe startups are just about thinking about a new
idea or plan. But in reality, execution of such plan is more necessary
than just thinking about it.
2. The view or perspective of the government on startup India plan is
quite short-term in nature. It does not look at the long-term path of the
startups.
3. For the success of any new business, competent workforce is
necessary. But in case of startups, skilled workforce is not possible due
to the lack of funds at the initial
phase.
4. The risk of reaching failure is greater in the startups as compared to
other organizations. It is because they tend to take steps quite fast.

Startup Karnataka
The State of Karnataka, especially its multicultural and multilingual capital, is the
Nations’ leading startup hub and the world’s second fastest growing start-up
ecosystem. Statistics suggest that Bangalore is now home for around 3,100 to
4,900 active tech startups. It ranks fifteen among the best 21st-century start-up
ecosystems across the Globe. Given these facts, it is no wonder that the State was
the first to come up with a dedicated Startup Cell. The Startup Karnataka initiative
was founded by the Karnataka Government with the object of boosting the scope
of startups in the State through strategic investment and policy interventions by
leveraging the robust innovation climate in Bangalore. This article is a detailed
account of the Nation’s first-ever comprehensive startup policy.

Objective
Through the Startup Karnataka initiative, the State Government seeks to ensure
that Bengaluru continues to be the most important startup hub in the country, while
other cities of the state are developed as startup destinations on par with thirty
international startup hubs. Apart from this, it seeks to:

 Stimulate the growth of 20,000 technology-based startups including 6,000

product startups by the year 2020.
 Generate six lakhs of direct and twelve lakhs of indirect employment
opportunities in the sector.
 Mobilize a sum of Rs. 2,000 crores of funding for investment in startups
solely through Government intervention, by leveraging the Fund of Funds
proposed to be constituted by the State Government.
 Facilitate the generation of at least 25 Innovative Technology solutions
which could impact sectors like Health Care, Food Security, Clean
environment and Education for all, etc.
 Connect entrepreneurs to Government Departments to help them in
implementing their Pilots.
 Provide a One-Stop-Shop platform for information on the regulatory
environment, incentives, events and the likes of it.
 Partner with industry bodies, TBIs, Academic Institutions, Incubators, etc
from the Startup Ecosystem.
 Provide startups with the opportunity of widening its network by enabling
participation in International Conferences organized by the program.

Vision
The program, as already stated, is envisioned to create a state-of-the-art startup
ecosystem in the State through investment and policy interventions leveraging the
robust innovation climate in Bangalore.
New Age Incubation Network
It is always never too late, indeed! But on the same note, it cannot be contested that
the age of youth is the most appropriate time to instill the desired qualities. This is
precisely the objective of the New Age Incubation Network (NAIN). The Network,
which is already being implemented in engineering colleges will now be expanded
to all professional and post-graduate institutions in two-tier cities in a phased
manner. The academic institution selected for this purpose would be assisted in
establishing an incubator in the given discipline, as well as in the promotion of
student projects. These institutions would be graded as per Key Performance
Indicators (KPI) and would be financially aided for a three-year period. Institutions
that perform well would be rendered assistance for another two years.

Placing of Technology Business Incubators

The State Government seeks to play a helping hand in the placing of TBIs in
institutions of higher learning with well-developed Research and development
facilities. This move has been propagated with the idea of fostering a strong link
between R&D institutions and the industry. The mechanism would be implemented
in the below-mentioned thrust areas:

 Information and Communication Technology (ICT)/Internet of Things

(IoT)/Software Products
 Manufacturing of all kinds
 Healthcare and Biopharma
 Agriculture and allied fields
 Clean-Tech
 Energy
 Water and its recycling
 Education
 Nanotechnology and Composites

The general norms mandate the host institutions to provide land and built-up space
for TBI. Also, these institutes are obligated to share available facilities and
expertise for the setting up of TBI. The funding for these institutions would be
determined on a case-to-case basis.

For the awareness of the readers, TBI in this context is an incubating facility in an
institution of higher learning, which renders services pertaining to business advice,
financial counseling, assistance with business management and accounting, legal
and regulatory guidance, access to mentors, etc., in addition to physical
infrastructure appropriate for the thrust area of the incubator.

Early Stage/idea2POC (PROOF OF CONCEPT) Funding

The Karnataka Government have facilitated an Ignition fund on the lines of BIG
fund of BIRAC, Government of India. The fund is meant for encouraging
innovators who may require early-stage funding to stimulate commercialization of
research discoveries and to cover costs like certification, manufacturing pilot
devices, etc. Funds for this purpose would be in the form of Grant-in-aid limited to
a one time grant of not more than Rs. 50 lakhs. Such funds would be released in
tranches based on the life cycle of the business plan.

Private Sector Participation

The State Government would avail the services of the private sector including
globally and nationally renowned accelerators and incubators to establish world-
class incubation centres and accelerators. Assistance in these lines would also be
sought for expanding the existing facility or operations.

Networking and Aggregation of Common Infrastructure Facilities

The Karnataka Government, in collaboration with the Central Government, have
over the years established labs and Common Instrumentation Facilities (CIF) like
IMTI and others across the state. These facilities would be made available for
public use and would be set up in identified areas like electronics, mobile
animation and gaming, IOT, analytics, design engineering, etc. This falls among
the list of projects which would be executed on a public-private partnership basis.

Fund of Funds
A fund of funds would be allocated for venture fund investments that make its
investments in startups. This would be in addition to any existing sector-specific
venture funds. A portion of the fund of funds could at times be utilized for Angel
state funding. These funds would be administered by a professional fund manager,
the likes of whom would be selected through an open bidding process.
Identification and Solving of Challenges
As a part of Karnataka’s Social Innovation Challenge Competition, the State
Government seeks to use the model of Grand challenges so as to emphasize efforts
and attention on specific issues.

The Council
The initiative would entail the setting up of a startup council, which would be
headed by the chairmanship of the Chief Minister. The rest of the team would
comprise of the relevant ministers and senior government officers, along with ten
industry experts to review the implementation of the startup policy. Measures
would be adopted for equal representation of various domains. In addition to this, a
Startup Policy Monitoring and Review Committee would be set up.

The policy would be reviewed on an annual basis. This would involve the
commissioning of a status report by the State Government to critically appraise the
usefulness of the policy, the ease of implementation and the outcomes achieved.
This report would be furnished to the Startup Council.

Qualifying Criteria
For an entity to be classified as a startup under this policy, it must fulfill the
following criteria:

 It must be technology based.

 Its date of incorporation shouldn’t be more than four years. The period shall
be seven years for BT companies.
 It must have been registered in Karnataka under the Karnataka Shops and
Commercial Establishments Act, 1961.
 At least 50% of its total workforce must belong to Karnataka (excluding
contract employees).

Also, on the same note, a company shouldn’t have been:

 Formed by the demerger or reconstitution of an existing business.

 A subsidiary of a firm in Karnataka, other than its own.
 A merged entity (subject to conditions).
  A franchisee of an existing business in Karnataka.
 Promoted, sponsored by or related to an industrial group in the State whose
turnover exceeds Rs. 300 crores.
 A holding company.
 Derive more than 50% of its income from investment and loans.

Incentives and Concessions

Incentives and concessions would be rendered as per the existing policies, which
would include the ones provided under various state and central government
policies. Furthermore, startups are eligible for additional tax benefits, as well as:

 Matching Grants, whereby the Government would match the funds raised by
the Incubator on a 1:1 basis.
 Thirty per cent of reimbursement of actual marketing costs, including travel
expenses incurred on internal marketing through trade show participation.
Such incentives would be subject to a cap of Rs. five lakhs per year for a
company.
 Reimbursement of the cost of filing and prosecution of the patent
application, subject to a limit of Rs. 2 lakhs per Indian patent awarded.
Foreign patents with a single subject matter would be granted
reimbursements of up to Rs. 10 lakhs. The reimbursement process entails
two stages, according to which 75% of funds would be provided for filing
the patent, while the remaining would be disbursed after the grant of patent.

Most of the above-mentioned benefits would be administered through identified

incubators. Incubators are not entitled to insist on physical incubation of mentee
incubates.

Make in India: Objectives, Scheme

Make in India initiative was launched by Prime Minister, Narender Modi in 2014
with the aim to transform India into a global design by enhancing skill
development, protecting intellectual property, fostering innovation, facilitating
investment, and constructing world-class manufacturing infrastructure in India.
The Make in India Scheme intends to work on increasing the amount of
investment in the country so that the domestic manufacturing sector gets better.
Make in India focuses on the upliftment of 27 sectors.
What is Make in India?

Make in India is a campaign, launched on September 25, 2014, by Prime Minister,

Narender Modi with the aim to bring back the straggling domestic manufacturing
sector and revive the economic downfall being faced by the country. The Make in
India Project was built with the vision to provide wings to various government
schemes that can flourish the growth of the Indian economy.

Make in India Overview

Below is a basic overview of the Make in India project that can help you in
understanding the program more clearly. The table will provide you with an insight
into the objectives of Make in India and details.

Highlights Make In India Scheme Details

Make in India initiative by Prime Minister, Narender Modi
Make in India launched on 25 September 2014
Make in India sectors 25 sectors involved
Government Ministry Ministry of Commerce and Industry
Make in India official website www.makeinindia.com

Make in India Logo

A lion appears in the Make in India logo. It has the shape of a lion with cogs
inside. This stands for entrepreneurship, strength, and pride in one's country. The
Make in India Logo was designed by Wieden+Kennedy.

Objectives Of Make in India

The fundamental objective behind the launch of Make in India was to come up
with unique ideas to bring the attention of international investors so that they can
invest in India and this would ultimately lead to the development of the
manufacturing sector. The Department for Promotion of Industry and Internal
Trade (DPIIT), Ministry of Commerce and Industry, Government of India, is
leading the initiative with the following objectives of Make in India-

 Raising the manufacturing sector growth to 12-14% per year.

 Create 100 million additional jobs in the manufacturing sector by 2022.
 Enhance the manufacturing sector’s share in the GDP to 25% by 2022.
  Creating required skill sets among the urban poor and the rural migrants to
foster inclusive growth.
 A rise in the domestic value addition and technological depth in the
manufacturing sector.
 Having environmentally-sustainable growth.
 To promote export-led growth.
 Augmenting the global competitiveness of the Indian manufacturing sector.

Make in India Project

Since the Make in India project is unique, it was suggested that the project should
be marketized apart from the traditional manner. They stood with the vision to put
forward the idea of educating the masses about the project and making it a global
success by:

 Boosting the confidence among Indians about their capabilities.

 Reaching out to a maximum number of the audience (both global and local)
using social media platforms. It involves updating them about the reforms
and possible opportunities.
 Lastly, it provides the framework for the technical information related to 25
industrial sectors.

The Department for Promotion of Industry and Internal Trade is working

progressively with many highly specialized agencies. They help industries to build
completely new infrastructure. It also involves coming up with a help desk
dedicated to each sector. Not only this, but to make the project reach locals, it has
launched mobile-first websites containing all the necessary information in sleek
and simple menus.

Sectors Under Make in India

By far, the make in India initiative has considered working on 27 sectors (of these,
25 are listed on the official website). These sectors can be subdivided into two- the
Services sector and the manufacturing sector. The list of these sectors is as under

Services Sectors Under Make in India Scheme

One of the major objectives of the Make in India scheme is the upgradation of the
services sectors to surge the Indian economy. The service sectors under the Make
in India project are:
 1. Medical Value Travel
2. Audio Visual Services
3. Construction and Related Engineering Services
4. Education Services
5. Financial Services
6. Environmental Services
7. Legal Services
8. Communication Services
9. Accounting and Finance Services
10.Tourism and Hospitality Services
11. Information Technology & Information Technology enabled Services (IT
&ITeS)
12. Transport and Logistics Services

Manufacturing Sectors under Make in India

The Make in India scheme focuses on the upliftment of the manufacturing sector
surging the number of investments. The manufacturing sectors under the Make in
India project are-

1. Construction
2. Bio-Technology
3. Aerospace and Defence
4. Pharmaceuticals and Medical Devices
5. Textile and Apparels
6. Gems and Jewellery
7. Railways
8. Shipping
9. Electronics System Design and Manufacturing
(ESDM) 10.New and Renewable Energy
11.Food Processing
12.Chemicals and Petrochemicals
13.Capital Goods
14.Automotive and Auto Components
15.Leather & Footwear
Make in India Scheme

Make in India is one of the major national programs that aim to improve the
industrial segment, and to make it a success, the government of India has come up
with certain schemes. The schemes supporting the initiative are:

Skill India

India is an overpopulated country with most people struggling with unemployment.

This is one of the major drawbacks that lead to the lagging economy. Seeing the
good in the bad, the Indian government launched Skill India.

 The Skill India scheme aims to skill more than 10 million people annually in
different sectors. The need of the hour is to look into the future possibilities
and upskill the available human resource.
 This becomes important because the percentage of formally skilled
workforce in India is only 2% of the population.

Startup India

India has been a home of brilliant minds. From time to time, many people have
come forward with innovative startup ideas that have changed the world, which is
why the Startup India scheme was launched. The main idea behind this program is
to build an ecosystem that drives sustainable economic growth, fosters the growth
of startups, and creates large-scale employment.

Digital India

The 21st-century world is changing drastically with the introduction of blockchain

and web 3.0 technology, and so are people’s interests. Seeing the shift, the
government has come up with the scheme of Digital India. This aims to transform
India into an educated and digitally empowered economy competing rest of the
world.

Pradhan Mantri Jan Dhan Yojana (PMJDY)

Pradhan Mantri Jan Dhan Yojana (PMJDY) under Make in India initiative is a
revolutionary financial inclusion program that concerns the assessment of financial
services, which includes remittances, insurance, credit, banking savings & deposit
accounts, and pension affordably in both rural and urban areas.
Smart Cities

To improve the infrastructure, the Smart cities scheme was launched. Its vision is
to reform and rejuvenate Indian cities by having a futuristic infrastructure that can
call up for tourism. The Indian government launched the scheme intending to build
100 smart cities through several sub-initiatives.

AMRUT

It's 2022, and most Indian towns and cities still lack the basic amenities. AMRUT,
or Atal Mission for Rejuvenation and Urban Transformation, is a scheme launched
that aims to build basic public amenities and make 500 cities in India more livable
and inclusive.

Swachh Bharat Abhiyan

To accelerate the efforts to achieve universal sanitation coverage and focus on the
country's poor sanitation ideology, Prime Minister launched this scheme. The idea
is to clean the country and promote basic sanitation and hygiene.

Sagarmala

India is surrounded by water from three sides and has a lot of ports. Sagarmala
scheme aims to develop ports and promote port-led developments throughout the
country.

International Solar Alliance (ISA)

Solar energy is a renewable energy source with huge potential. International Solar
Alliance (ISA) is an alliance of 121 leading countries (most of them are called
sunshine countries). These countries lie either partly or completely between the
Tropic of Capricorn and the Tropic of Cancer. India’s initiative aims to promote
research and development in solar technology and formulate policies.

AGNII

Accelerating Growth of New India’s Innovation or AGNII is another initiative that

was launched with the idea of assisting commercialization with innovation.
Benefits of Make in India
Make in India has been a revolutionary initiative for the country’s progress. It has
been a project that has led to several positive impacts that include the country's
development by changing the economic condition of the Indian industries and
manufacturing sector. With this mission, India has by far enjoyed the following
benefits-

 The major unemployment problem has been resolved up to a limit by

generating new opportunities.
 If FDI inflows increase, then the present condition of the Indian rupee will
also get a push.
 By expanding economic growth, the GPD will also flourish.
 The small manufacturers get the investment directly from the appropriate
foreign investors.
 With foreign investment introduces, new technologies, ultimately leading to
growth and development.
 Due to the various initiatives taken under the Mission, India has increased
the EoDB index ranks.
 The setting up of manufacturing sites and factories in rural areas has also led
to their development.
 THE STATUS OF INDIVIDUAL SECTORS UNDER MAKE IN INDIA
SCHEME

Incentives
Name of the About the offered/Programs Progress so far (Based on
Sector sector Launched latest reports)

BioTechnology The biotechnology 1. FDI Policy 100% 1. Current Good

industry is an FDI dor Greenfield Manufacturing Practices

industry where Pharma via the (CGMP) a plant was

India has grown in automatic route 100% inaugurated in 2016 for the

leaps and bounds. FDI for Brownfield manufacture of

The industry owes Pharma. Here, in case Phytopharmaceuticals

its success to the of FDI up to 74% 2. A virtual centre was launched

R&D activities automatic route is across five Indian Institutes of

and growing available and beyond Technology, in 2015, to

government 74% government develop and advance

initiatives route has to be taken technologies in the area of

100% FDI for medical biofuels

devices via the 3. 30 Bio-incubators and Biotech

automatic route Parks were supported/established

2. Biotechnology from April 2014 to September

Industry Research 2016

Assistance Council 4. First indigenously developed

and manufactured rotavirus

vaccine 'Rotavac' was launched

in
 Incentives
Name of the About the offered/Programs Progress so far (Based on
Sector sector Launched latest reports)

(BIRAC) was set up 2015

to assist the industry

through funding,

mentoring,

handholding and

infrastructure support

Electronic Electronic system 1. The Modified SIPS 1. Around 38 mobile

Systems is an area where scheme has been manufacturing units have been

the focus has been developed in order to set up which have created

on import attract investment employment of about 38300

substitution. India into this sector 2. Under Digital Saksharta

being a labour rich 2. Export incentives 2- Abhiyan(DISHA)around 99.56

country has a forte 3% are made available lakh candidates have been

which needs to be under the enrolled for training

taken advantage Merchandise export 3. In 2017 this industry witnesses a

of. from India scheme remarkable jump of 27% where

3. The export in the total volume reached 1.57

 Incentives
Name of the About the offered/Programs Progress so far (Based on
Sector sector Launched latest reports)

promotion capital Lakh Crore from 1.43 Lakh

goods scheme offers Crore in 2016

zero customs duty for

import of capital

goods used for pre-

production, production

and post production

Food India is in a 1. Reserve Bank of 1. The growth rate of Gross Value

Processing position to provide India has classified Added has increased from 1.91%

hygienic food loan to food & agro- in 2013-14 to 5.78% in 2014-15

processed and based processing units at constant prices

packed by and Cold Chain under 2. There has been a FDI equity

utilisation of agriculture activities inflow of USD 1.7 Billion

modern for Priority Sector from April 2014 to December

technology. Lending (PSL) subject 2016

Nivesh Bandhu is to the aggregate 3. 88 cold chain projects have been

a platform which sanctioned limit of operationalised out of the 134

projects which had been

 Incentives
Name of the About the offered/Programs Progress so far (Based on
Sector sector Launched latest reports)

provides a one USD 15.38 million per sanctioned

stop solution to borrower which will 4. The government had

investors in the ensure a good flow of sanctioned 42 mega food parks of

area of food credit to the which 8 have been

processing, aiding entrepreneurs operationalised. Every mega food

them in decision 2. A special fund park is set to create employment

making and called Food opportunities for about 5000-6000

providing Processing Fund people and benefit 25000-30000

incentives amounting to USD farmers

300 millions has been

deposited with the

NABARD in order to

provide funds to

designated food parks

and individual food

processing units in the

designated food parks

3. Reduction of excise

duty and customs duty

 Incentives
Name of the About the offered/Programs Progress so far (Based on
Sector sector Launched latest reports)

has been a fiscal

incentive which

helps boost up the

industry

IT and BPM IT + IT= IT Indian 1. Favourable 1. Total FDI equity inflow in

Talent + government policies Computer software and

Information and initiatives serve hardware sector saw a major

technology = India as an incentive to growth from

Tomorrow. The invest in this sector 2. 3 Billion to 5.9 Billion

Information 2. The Digital India

technology sector campaign has

contributes a pumped in a lot of

countable share to investment with

the exports. This digital delivery

industry is the standing as a focus

largest private point

sector employer

providing millions
 Incentives
Name of the About the offered/Programs Progress so far (Based on
Sector sector Launched latest reports)

of job

opportunities

Tourism and The tourism and 1. Swadesh Darshan 1. India crawled up 13 places

hospitality hospitality is the scheme had been from 65 to 52 as per the Travel

lifeblood of an launched to serve and Tourism Competitiveness

economy.Tourism mass and niche Index 2015 of the World

is the third largest tourism Economic Forum

foreign exchange 2. The National 2. Foreign Exchange Earnings

earner next in line Mission for Pilgrimage have increased from INR 1351

after gems and Rejuvenation and Billion(FY 2015-16) to INR 1556

readymade Spiritual Billion

garments in India. Augmentation Drive 3. This sector is among the top

Private-public had the beautification 10 sectors when it comes to the

partnerships will of pilgrimage sites as FDI inflow.The FDI inflow has

be the focus for its focus increased by 72% (2015-16 vs

India to see this 3. The e-tourist visa 2014-15)

Industry makes its facility has been

extended to travellers
 Incentives
Name of the About the offered/Programs Progress so far (Based on
Sector sector Launched latest reports)

mark in the future of 150 countries

Industrial corridor

Introduction

 An industrial corridor is basically a corridor comprising of multi-modal transport services that would

pass through the states as main artery.

o Freight cargo from industrial and National Investment and Manufacturing Zones (NIMZs) located upto
a distance of 100-150 km on both sides of this main artery are brought to the industrial corridor via rail
and road feeder links that provides last mile connectivity.
o This will lower costs of logistics and enable firms to focus on their areas of core competence.
 Industrial corridors offer effective integration between industry and infrastructure, leading to overall
economic and social development.
 Industrial corridors constitute world-class infrastructure, such as:

o High-speed transportation network – rail and road

o Ports with state-of-the-art cargo handling equipment
o Modern airports
o Special economic regions/industrial areas
o Logistic parks/transhipment hubs
o Knowledge parks focused on catering to industrial needs
o Complementary infrastructure such as townships/real estate
o Other urban infrastructure along with enabling policy framework
 Five industrial corridor projects have been identified, planned and launched by the Government of India.
These corridors are spread across India, with strategic focus on inclusive development to provide a boost to
industrialization and planned urbanization.
 Manufacturing is a key economic driver in each of these projects. These projects are expected to play a
critical role in raising the share of contribution of the manufacturing sector from approximately 16%
to 25% by 2025.
 Smart cities are being developed along these corridors. These cities, with state-of-the-art infrastructure, will
house the new workforce that is required to power manufacturing, in turn leading to planned urbanization.

Five Industrial Corridors

 Delhi-Mumbai Industrial Corridor (DMIC) covers Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh,
Gujarat and Maharashtra.

o The corridor covers an overall length of 1483 km between the political capital, Delhi, and the business
capital, Mumbai, of India.
o The US $100 bn project is being funded by the Government of India, Japanese loans, investments
by Japanese firms and through Japan depository receipts issued by Indian companies.
o DMIC Project aims to create futuristic Industrial Cities by leveraging the “High Speed – High
Capacity” connectivity backbone provided by the Western Dedicated Freight Corridor (DFC)
 Chennai-Bengaluru Industrial Corridor (CBIC) covers Tamil Nadu, Andhra Pradesh and Karnataka.

o It is being funded by the Japan International Cooperation Agency (JICA).

 Bengaluru-Mumbai Economic Corridor (BMEC) covers Maharashtra and Karnataka.

o It is being developed with the help of Britain (UK).

o The Delhi Mumbai Industrial Corridor Development Corporation (DMICD) and the UK Trade and
Investment (UKTI) have been determined as the nodal agencies on the Indian and UK sides
respectively.
 Amritsar-Kolkata Industrial Corridor (AKIC) covers Punjab, Haryana, Uttarakhand, Uttar Pradesh,
Bihar, Jharkhand and West Bengal.

o The Project extends from Amritsar (Punjab) to Dankuni (West Bengal) for a length of 1839 kms.
o The Eastern Dedicated Freight Corridor is the backbone of this economic corridor.
 East Coast Economic Corridor (ECEC) covers West Bengal, Odisha, Andhra Pradesh and Tamil Nadu.
Vizag to Chennai segment of this Corridor has been taken as phase-1.

o Vizag-Chennai Industrial Corridor (VCIC) is the first coastal economic corridor in the country.
o It covers more than 800 km of Andhra Pradesh’s coastline and is aligned with the Golden Quadrilateral.
It also plays a critical role in the “Act East Policy” of India.
o In September 2016, the Asian Development Bank (ADB) approved loans and grants worth US$ 631
mn for the infrastructural development along the VCIC.
Significance of Industrial Corridors in India

 Economic Significance:

o Avenues for Exports: The Industrial Corridors are likely to lower the cost of
logistics thereby increasing the efficiency of industrial production structure. Such an
efficiency lowers the cost of production which makes the Indian made products more
competitive in international markets. The production of export surplus would generate employment
opportunities and raise per capita incomes.
o Job Opportunities: Development of Industrial Corridors would attract investments for the
development of Industries which is likely to create more jobs in the market. Moreover, people would
find job opportunities close to their homes and would not have to migrate to far-off places (would
prevent distress migration).
o These corridors would provide necessary logistics infrastructure needed to reap economies of
scale, thus enabling firms to focus on their areas of core competence.
o Industrial corridor provides opportunities for private sector investment in the provision of various
infrastructure projects associated with the exploitation industrial opportunity.
o Apart from the development of infrastructure, long-term advantages to business and industry along the
corridor include benefits arising from smooth access to the industrial production units, decreased
 transportation and communications costs, improved delivery time and reduction in inventory
cost.
 Environmental Significance: The establishment of Industrial Units in a scattered manner along the
industrial corridor across the length of the state will prevent concentration of industries in one particular
location which exploited the environment beyond its carrying capacity and caused environmental
degradation.
 Socio-Economic Significance: The cascading effect of industrial corridors in socio-economic terms are
many such as setting up of industrial townships, educational institutions, hospitals. These will further
raise the standards of human development.

o Availability of jobs locally would help in preserving family as an institution. This will also
increase social integration in the country
Challenges Associated with Industrial Corridors

 Land Acquisition: Since the industrial corridor would cut across the length of the state, acquisition of land
has been slow because of legal hurdles and the amount of compensation.
 Technological Knowhow: Since India lacks technological knowhow in certain sectors, it would be prudent
to raise FDI caps to allow foreign players to bring in the required technological knowhow and encourage
Indian investment in setting up ancillary and auxiliary industries in that sector.
 India’s taxation regime needs to clearly define the tax liabilities of foreign firms operating in India as
permanent establishments and otherwise.
 Macroeconomic stability: It is necessary to have a stable exchange rate so that foreign players with
investments in India can avoid currency risks.
 India needs to clearly lay down ground rules for cancellation of licenses in Bilateral Investment
Treaties which could later create confusion as in case of Antrix-Devas deal.
 The economic and financial feasibility of industrial corridors should be ensured by attracting potential
investors to set up manufacturing units at NMIZ.
 Massive investment in industrial corridor will pave the way for large human displacement and destruction
of fertile agricultural land.
 Fear of widening Rural-urban gap in terms of Human Development, economic well-being and standards of
living.