The government plans to earmark R3,500 crore every year for the next five years to set up seven industrial cities on the proposed Delhi-Mumbai industrial corridor (DMIC).
The 1,483-km-long corridor running through seven states — Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra—will come up alongside the proposed Delhi-Mumbai dedicated rail freight corridor.
"The government will provide Rs500 crore per year per industrial city to a fund for the next five years beginning 2011-12, as grant for the creation of capital assets to catalyse the development of these cities," said a government source, who did not wish to be identified.Another Rs 200 crore every year will be set aside from the Budget that would be used by the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) to build infrastructure.
The resources will be parked in a corpus known as the DMIC Project Implementation Fund. The fund will be established as a trust empowered to raise long-term debt finance at attractive rates from institutions and also issue tax-free bonds.
The industrial belts covered by the plan are: Dadri-Noida-Ghaziabad in Uttar Pradesh; Manesar-Bawal in Haryana, Khushkhera-Bhiwadi-Neemrana in Rajasthan, Pitampura-Dhar-Mhow in Madhya Pradesh, Ahmedabad-Dholera in Gujarat, Igatpuri-Nashik-Sinnar and Dighi Port Industrial Area in Maharashtra.
The fund will be administered by Board of Trustees chaired by secretary, department of industrial policy and promotions, with representatives from the departments of economic affairs and expenditure, the Planning Commission and the chief executive of the DMICDC.
"The board of trustees will decide the optimal mix and choice of financial instruments along with suitable terms and conditions," the source said.
Each city will have production units, public utilities, logistics facilities, environmental protection facilities, social infrastructure and administrative services.
The central government's contribution to the fund would be used as a revolving corpus.
A special purpose vehicle (SPV) would be created under the Companies Act for each industrial city node. The SPVs will function as the development authority and double as municipal administration.