Indian industrial corridors to enrich manufacturing infrastructure

V Nagarajan

While the entire world has gone through some disruptive changes because of the pandemic, it has also opened a window of opportunity for India. Regionalisation of manufacturing supply chain and strengthening of domestic manufacturing base makes India a global or regional hub in manufacturing, according to survey by JLL.

Industrial corridors is explored as it is the nerve centre of an economic ecosystem built around a transportation corridor connecting major manufacturing zones, urban centres, and social infrastructure in India. It traverses through the genesis of industrial corridors and some examples across the world. This also takes into consideration the decadal evolution of industrial corridors in India and traces the manufacturing investments already committed along these corridors.

India intends to spend $1.4 trillion on infrastructure by 2023 to strengthen the backbone of the country. There are four key physical and digital infrastructure projects in India which have the potential to transform India’s economy, according to Yogesh Shevade, Head, Industrial Services, JLL India.

They are dedicated freight corridor, Bharatmala programme, National Infrastructure Pipeline and LEEP - Logistics Efficiency Enhancement programme.

Interestingly, India’s industrial corridor concept materialised in the first decade of 2000s. Delhi-Mumbai Industrial Corridor has been one of the first such concepts and it relied on Tokaido Corridor concept of Japan. While DMIC may not be a full reflection of Japan’s 1960 Spacific belt economy model, it has certain similar conceptual considerations including the comprehensive development of infrastructure and urban development. These components are all taken into consideration in DMIC’s master plan.

Thus starting from Delhi-Mumbai Industrial Corridor (DMIC) to Chennai-Bangalore Industrial Corridor (CBIC), all comprehensive projects will fuel into the growth of the economy- industry- social infrastructure. Noteworthy to mention that the Tokaido Corridor is almost a 1,200 km corridor connecting Osaka and Tokyo and accounts for a staggering 80 per cent of Japan’s GDP.

The Ministry of Railways, under the direction of the Indian Government, had taken up the dedicated freight corridor (DFC) project. The project involves the construction of six freight corridors traversing the entire country.

The purpose of the project is to provide a safe and efficient freight transportation system. It is important because, currently, freight trains do not get priority over passenger trains. Once completed, at least 70 per cent of the freight trains will be transferred on the DFCCIL network which will help in timely movement of cargo. Also, this may lead to the introduction of more passenger trains in future.

Initially, the construction of two freight corridors, the Western DFC connecting the states of Haryana & Maharashtra and the Eastern DFC connecting the states Punjab and West Bengal has been undertaken. The combined length of the Western and Eastern DFCs is approximately 2,843 km. The total cost of the project is estimated at $13,046.3 million.

It is expected to be operational by June 2022 (Timelines extended due to COVID-19 impact). The other four corridors include North-South (Delhi-Tamil Nadu), East-West (West Bengal-Maharashtra), East-South (West Bengal-Andhra Pradesh) and South-South (Tamil Nadu-Goa). These four corridors are still in the planning stage.

The parks are expected to serve four key functions - freight aggregation and distribution, multimodal freight movement, storage and warehousing, and value-added services such as custom clearances.

I have recently sold land in Jaipur and intend utilising the funds partly within India and the balance outside India. Can I use the exemption option if invested abroad? Please clarify. Anand Jain, Sharjah.

Any immovable property sold after a period of 24 months is classified as a long-term asset. It is taxable as long-term capital gain at 20 per cent but exemption can be gained if invested in one residential house in India within one year or two years after or construction within three years from the date of transfer. Again the restriction is that this exemption is available if you do not own more than one residential house.

Capital gains exemption is not available if the investment is made outside India.

My sister who is also an NRI wants to gift her share to me pertaining to ancestral property situated in India. Which option is ideal, Will or gift deed? Please advise us. Shishir, Dubai.

It is assumed that you and your sister are the owners of the property. If she bequeaths under a Will, the bequest shall take effect only on her demise and it may get challenged by her legal heirs. If it is transferred under a gift deed, it has to be duly stamped and registered with the sub-registrar of assurances and signed by two witnesses. It is advisable to opt for gifting of the property by a registered deed.