«“Manufacturing cities: Industrial policy and urban planning in India”1 Neha Sami* Shriya Anand ©Neha Sami & Shriya Anand (*) Neha Sami & Shriya ...»
On the other hand, if the new industries which get set up in the SIRs are very different in nature from the existing industrial ecosystem-if the industries are highly capital intensive and are closed in nature without depending on the existing firms, it could result in a significant amount of unemployment.
Achieving a sustainable mix of industries will be necessary to offset these changes.
One of the reasons offered for the low employment generation potential of the industrial sector has been cumbersome labour regulations (Panagariya, 2008).
Even though the SEZ policy was expected to improve employment, the job generation record was dismal. According to a CAG report, SEZs fell short of their targets for employment generation by about 90% (Comptroller and Auditor General of India, 2014). To address this concern, labour reforms have been announced in both the states being studied here. The reforms in Rajasthan allow firms more flexibility in hiring and firing by waiving of compulsory and prior approval from the government before layoffs, retrenchment and closure of industrial establishments employing more than 100 workers along with changes in terms of contractual labour and work hours among other changes (Mallet, 2015; Sahoo, 2014). Gujarat too, which is lauded for having industry friendly labour laws, has formalised the passage of similar reforms (Vishwa Gujarat, 2015).
While governments are easing labour regulations to facilitate industrialisation in their respective states, it is too early to assess the impacts of these policies on employment trends in the region. Whether the SIRs will cause unemployment and whether they will absorb the displaced labour is unclear. The DMIC Concept Paper (Department of Industrial Policy and Promotion, 2007) emphasises on development of skill centres to equip job seekers, especially from acquired regions, to gain employment in the upcoming industries.
However, as we found out in our interviews with officials in both states, a large part of industrial labour comes from other states and not from within the state,
especially in the case of Gujarat. A critical challenge will be the ability of government agencies to accommodate the transition that is happening from traditional agricultural occupations of residents to non-agricultural occupations in anticipation of industrial development. In case of Dholera, which is a greenfield site, it is unclear whether the occupants of the acquired villages will be absorbed into workforce once the industries come in. Further research is necessary to understand the impact of the corridor on employment patterns.
The government has introduced schemes to promote MSMEs like the MUDRA bank which aims to provide funding to these enterprises. Skill development has also been taken seriously by the current government with the forthcoming launch of the National Skill India programme. In order to meet the employment goals of the DMIC, the national and the state governments will need to work with the private sector to create a sustainable industrial mix and provide adequate skills to aid the transition from traditional occupations to industry.
4.3. Regional disparities Gujarat and Rajasthan are vastly different in terms of levels of economic development and complexity of governance mechanisms. Gujarat has been lauded for its model of development which promoted large scale industrialisation of the state. Gujarat has historically been a fairly industrialised state and has mechanisms in place. The state makes use of the Town Planning Schemes for land acquisition; the Gujarat Industrial Development Corporation (GIDC) has developed industrial infrastructure in Gujarat on a large scale and has assisted in diversifying the industrial base in the state; Gujarat is also the first state in the country to come up with the SIR Act. Rajasthan, once part of the BIMARU states, on the other hand, has lower levels on economic development and has a relatively weaker industrial base which is dependent on its abundant mineral wealth. However, industrial growth in the state has been rising. Keeping in mind the varying capacities and historical growth trajectories of individual states, the policy is expected to affect each state differently even
though one of its stated aims to connect leading regions to lagging regions and promote regional development.
While the corridor policy is a centrally led policy, states have to compete to attract industries by framing industrial friendly policies. Environmental, labour and land acquisition regulations among others are enforced differently in different states in order to increase competitiveness. Gujarat being highly developed and being a preferred destination for industries can enforce pollution control norms strictly and allow the setting up of mostly non polluting industrial units in its SIRs; Rajasthan has lesser incentive to enforce such strict regulations in order to attract new industries and retain the ones that show interest in setting up establishments in the state. In order to avoid these disparities, the centre will have to enforce regulations uniformly across all the states. The central government may have to play a more proactive role in order to enable states to leverage this investment and not worsen inter-state disparities.
5. Conclusion This paper examines the governance and planning arrangements along the DelhiMumbai Industrial Corridor. We found that while the national and state governments were well aligned, there was little coordination between the state and local governments regarding the planning and development of the DMIC. Moreover, we found that the entire process of corridor development was in the hands of the Ministry of Commerce and Industry and its agencies, with little involvement from the Ministry of Urban Development or its agencies. Urbanization, therefore, featured only as a by-product of this process, and the main focus was on developing new industrial and manufacturing centres.
Further, these new centres are being developed away from existing cities, and under 243Q, an exclusion to the 74th Constitutional Amendment which allows them
to be established by a development authority, and without an elected local government. A few important caveats should be added here. Firstly, the move away from existing settlements may also have been motivated by factors other than regional development and our interviews brought out implications of several such issues. For instance, the acquisition of land for development can be much more difficult in existing settlements in terms of both supply and cost – there may not be enough available land for projects and available land may have high acquisition costs.
Secondly, existing settlements are also governed by a number of planning processes, laws, rules and regulations that may hinder or prohibit certain activities envisioned in the DMIC nodes. For instance, a 1996 Supreme Court ruling directed certain hazardous or polluting factories located in Delhi to cease operations and relocate outside the city, specifically stating that their continuing presence was not in consonance with the Delhi Master Plan.7 The presence of master plans and zoning laws, urban local bodies and most importantly, high levels of existing human habitation may often entail higher costs for industrial planning and development in existing cities. This in turn may make the move away from existing settlements attractive, particularly to regions governed by an authority such as the RDA that has relative freedom to formulate its own rules and regulations that can suit industrial and economic requirements (though the SIR law requires some forms of adherence to existing town planning laws). However, as discussed earlier, the setting up of these development authorities makes it difficult to transition to elected local government, and can lead to fragmentation as witnessed in the case of Bangalore (Sami, 2013).
In some senses, this is not new in post-independence India. Several towns and cities post-independence were built with considerations of industry in mind such as the steel towns of Bhilai and Bokaro. The country’s Special Economic Zone (SEZ) Reference: 1996 SCC (4) 750 (Link: http://judis.nic.in/supremecourt/imgst.aspx?filename=15490)
policies in the late 1990s can also be thought of as a precursor to the trends of industrial corridors and investment regions where large spaces with integrated infrastructure were created away from existing settlements to encourage industrial production within the country.
However, industrial corridors introduce some new aspects to these trends of industry- led development. The industrial corridor reiterates the growing prominence of the special purpose vehicle and public (and public-private) corporations such as the DMICDC and GICC in facilitating large-scale development in the country, which is a significant shift from the model of the steel towns built in the 1960s. Over the years, SPVs and PPPs have dramatically gained prominence, becoming important actors in governance structures across various scales and levels ranging from local initiatives to large-scale projects of national importance.
Such bodies are likely to continue playing critical roles in urban, industrial and economic development in the country, thereby requiring more conventional actors such as municipal corporations or state government departments to regularly engage in creating, coordinating, and working with these actors.
The implementation of a project of this scale has implications for multiple sectors and across different scales. New planning and governance mechanisms are being set up that do not take representative democracy into account at this point in time;
land acquisition, compensation, resettlement and rehabilitation remain challenges;
and there are repercussions for the kind of manufacturing and employment that these new areas will generate.
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