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«“Manufacturing cities: Industrial policy and urban planning in India”1 Neha Sami* Shriya Anand ©Neha Sami & Shriya Anand (*) Neha Sami & Shriya ...»

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Second, the industrial corridors are making an explicit effort to provide connectivity to surrounding regions through the corridor itself as well as by building feeder road and rail networks. Third, the corridor policy is attempting to explicitly link industrial policy and urbanisation by developing industrial townships. A preliminary study of select locations along the DMIC shows that the planning of special investment regions (SIRs) is different from that of SEZs: unlike the SEZs, there is no requirement for SIRs to be built on contiguous land, which implies that the SIR plans incorporate existing villages and do not need to acquire land from the farmers in some cases. In addition, the SIRs are being built in a phased manner, which allows the government to experiment with the viability of such a region before building the entire infrastructure required.

Both the SEZ policy as well as the industrial corridor policy are inspired by a model of export-oriented industrialisation building on the East Asian experience.

However, the particular type of development that such policy aims to promote does not reflect the economic and urban reality of India. India’s urbanization during the past decade has been driven by the emergence of a large number of smaller, more dispersed settlements and not by metropolitan expansion (Denis et al., 2012a). The

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economy is dominated by the services sector, while most of the employment in the manufacturing sector is concentrated in small, informal enterprises. Through this focus on developing greenfield industrial cities, the state is simultaneously ignoring the tremendous infrastructure requirements of its existing small and medium towns as well as pushing a model of capital intensive growth which will fail to meet its employment objectives in the medium and long term. The next section is a detailed discussion of the planning and governing arrangements for the DMIC followed by an analysis of assumptions underlying these policies and their relevance in the Indian context.

3. Planning and governing the DMIC Building on primary research along the DMIC, two key issues have emerged around questions of governance and planning of the corridor: the first is a disconnect between industrial planning and urban planning. Despite the urban implications of the industrial corridor policy, our fieldwork has shown that in the context of the DMIC, this project is being largely planned and managed by industrial and economic development agencies. The industrial and urban policies around this corridor are largely being developed independently. This is particularly true at the city level. The second issue is that of coordination between the various levels of government. While state and central government agencies are working closely together, there is less coordination between the state and the city governments.

Given the importance stated in the policy itself about linking urbanisation and industrialization as well as urban governance reforms that mandate increased decentralization, the involvement of existing urban local governments takes on a new importance.

We find that there is a lot more coordination between state-level agencies and the central government agencies than between the state and city agencies. Moreover, while most of the decision-making is taking place at the level of the state government, most of the impact of the development of the corridor is being felt at

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the local level where government agencies and other stakeholders have little power to act. Our research also shows that non-state actors like consultants are now formally part of the planning process and are playing an increasingly important role in facilitating coordination between various levels of government, and between different agencies.

3.1. Building the Delhi-Mumbai Industrial Corridor In this section we focus particularly on the development and planning experiences of the DMIC. The DMIC and its experiences will also be used as a model for the development of the other industrial corridors, making this very relevant for future policy as well.

Figure 2: The alignment of the DMIC Source: (Department of Industrial Policy & Promotion, 2014) As Figure 2 shows, the DMIC is being planned using the 1,483 km-long highcapacity Western Dedicated Freight Corridor (DFC) as the spine. The corridor will span six states: Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra. The development plan includes the creation of manufacturing cities,

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logistic hubs, and residential townships along the Western DFC that will promote manufacturing-led economic growth (Department of Industrial Policy and Promotion, 2014). The plan also includes the development of industrial areas and investment regions along the corridor like the planned Special Investment Region of Dholera in Gujarat. A total of 24 new cities are being planned as part of the DMIC project, with seven of these planned for Phase I of development.

The conceptualisation of the DMIC seems to have originated from two circumstances. The first was the decision of the Government of India in the mids to construct a Dedicated Freight Corridor (DFC) connecting the cities of Delhi and Mumbai, as part of a bigger project to build a national-level freight corridor network (Dedicated Freight Corridor Corporation of India, 2013). The second is the international experience of industrial corridors and megalopolises as drivers of growth and employment, in particular the Japanese Taiheiyo Belt running roughly from Tokyo to Osaka (also known as the ‘Pacific Belt’ or ‘The Tokaido Corridor’) (Nikkei Asian Review, 2014; Sanjai, 2013; Mangaonkar, 2009;





Dhaliwal, 2008; The Hindu, 2007).

The Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC), created in 2007, is the nodal agency responsible for the execution of the DMIC project at the national level. It is a Special Purpose Vehicle (SPV) constituted as a public corporation with the Government of India represented by the Department of Industrial Policy and Promotion (DIPP), as the single largest shareholder (with a stake of 49%).5 Other shareholders include the Japan Bank for International Cooperation or JBIC (26%), the Housing and Urban Development Corporation Ltd or HUDCO (19.9%), the India Infrastructure Finance Company Ltd or IIFCL (4.1%) The DIPP was established in 1995 and is responsible for the formulation and implementation of promotional and developmental measures for growth of the industrial sector, keeping in view national priorities and socioeconomic objectives. The DIPP is responsible for the overall Industrial Policy while individual Administrative Ministries look after the production, distribution, development and planning aspects of specific industries allocated to them.

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and the Life Insurance Corporation of India or LIC (1%) (Delhi-Mumbai Industrial Corridor Development Corporation, 2014).

Despite the urban rhetoric of the industrial corridor policy, our fieldwork has shown that in the context of the DMIC, this project is being largely planned and managed by industrial and economic development agencies. The disconnect operates at two levels: across scales and across sectors. Across sectors, at the state government level, there is little coordination between the industrial departments that are planning and executing projects and the urban development departments.

An important caveat here is that the Rajasthan state government has been more proactive about taking inputs from the urban development department. Across scales, while there is close cooperation between the national and state governments, there is little coordination between state and city governments regarding this project. Most of the decision-making is taking place at the level of the state government, even though the project will have significant impacts at the local level where government agencies and other stakeholders have little power to act.

3.2. Planning and governance at different scales While the DMICDC is the nationwide nodal agency for the DMIC, the overall institutional framework for the project’s execution is much more complex. The DMIC’s Project Influence Area covers major portions of seven states (some of which are the largest states in the country in terms of both size and population).

This fact, combined with the federal nature of India’s governance structure (which devolves several powers and functions to state governments), implies a large number of stakeholders spanning several regions that the DMICDC is required to engage with.

Each state has evolved specific mechanisms to implement DMIC projects within its jurisdictions. The management of the project at the state level is undertaken by nodal agencies, the Gujarat Infrastructure Development Board in Gujarat, and the Bureau of Investment Promotion in Rajasthan. Our research work in Gujarat and

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Rajasthan showed that such mechanisms typically involve the state nodal agency engaging with a variety of governmental and non-governmental actors to carry out particular functions and execute specific projects. However, although the individual state governments play an important role in land acquisition, and the provision of some industrial infrastructure, the DMIC is essentially a centrally conceptualized and financed project. The central government also provides transportation infrastructure through the Ministry of Railways, thereby enabling connectivity between the nodes. In addition, as we learned through our interviews, state government agencies have also received central assistance for the planning of these projects through consultants that are hired and paid for by the DMICDC.

While the coordination mechanism between the central government and its agencies, particularly the DMICDC, and the state governments, has been worked out in detail in the DMIC policy documents, the third tier of government (i.e. at the local/city level) has largely been ignored. This was also reflected in the responses of different actors: while the central and state level agency representatives we interviewed had very similar responses to our questions about the planning of the DMIC, the selection of sites for investment, the project influence area, the phasing, and other questions related to the operationalization of the DMIC; the city level planning agencies had little awareness about the plans for the DMIC. Their perceptions of the plans were often very different from those stated by the central and state level agencies.

In addition, Vadodara was in the process of preparing its 20-year Master Plan and obtaining approval from the state government when the DMIC was announced in

2007. Despite the fact that city planning officials were aware of the DMIC, a megaproject which is likely to impact the city significantly given its proximity to the Delhi-Mumbai national highway, to one of the proposed industrial areas as well as to an interchange location between road and rail for the DMIC, they had not altered their Master Plan in any way to incorporate any potential additional growth arising from the corridor and its related investments. Part of this disconnect stems from

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the absence of any framework governing coordination between state governments and existing cities, even though these are likely to experience significant impacts.

In contrast, our interviews revealed that the Rajasthan state government had formulated a plan for the Khushkera-Bhiwadi-Neemrana region (KBNIR), but altered this plan after the announcement of the DMIC to incorporate some changes. However, the city of Jodhpur had an experience similar to the city of Vadodara – they had little information about the DMIC and were not reviewing their Master Plan.

There are multiple possible explanations for this. One possible explanation could be due to the fact that the new institutional frameworks established in the state of Gujarat for DMIC implementation are focusing to a greater extent on greenfield projects such as Dholera. In doing so, they are neglecting the impacts on existing cities which themselves are not equipped to alter their plans given their limited knowledge about the project and its timelines. In addition, the planning and implementation of the DMIC is largely taking place through the institutions of industrial planning, rather than urban development, which is why the urban development ministry at the state level, as well as city governments, are only involved in a very limited way. This disconnect is dealt with in greater detail below.

Another possible explanation relates to a general failure of urban planning in Indian cities: that it is often reactive and not proactive (Weinstein et al., 2013;

Sami, 2012; Roy, 2009). Master Plans are formulated based on simple population projections based on past trends, and do not take infrastructure projects or future potential for industrial growth into account. This is partly due to the fact that these projects are planned by higher levels of government such as state or national level agencies, without taking local governments into account. Moreover, infrastructure projects such as highways, railways, or even industrial parks are planned by different ministries that do not coordinate with the ministry for urban development.

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3.3. Planning and governance across different sectors The implementation frameworks at the state level have some similarities with those of the Centre. In both Gujarat and Rajasthan, the responsibility of developing the DMIC rests with government bodies concerned with commerce and industry that in turn carry out these responsibilities through specific, government-controlled agencies such as the Gujarat Infrastructure Development Board (GIDB) and the (Rajasthan) Bureau of Investment Promotion (BIP). As is the case in several Indian states, these agencies were incorporated to perform several functions related to the promotion of industrial and commercial growth within their respective states and need not necessarily be confined to the implementation of DMIC-related projects.



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