In an interview with Nayanima Basu, he says most of the issues concerning regulatory hurdles and land acquisition have been sorted out. Edited excerpts:
It has been almost seven years since the DMIC was conceptualised by former commerce minister Kamal Nath, later approved by the Cabinet in 2011. However, it seems it has not taken off the way it was expected. What has gone wrong?
Please do not ask us to rush in an unplanned manner. We are going about the project systematically. The timeline laid down by the Cabinet for development of the first phase of the seven new industrial cities is 2019. We are well on schedule. In fact, we are ahead of schedule in Gujarat and Maharashtra.
These are new industrial cities of the size and scale of Singapore. They require extensive planning, detailed engineering of trunk infrastructure, environmental approvals, and land pooling procurement by the state government concerned.
There is no legal framework for development of new cities in India. We had to finalise Share Holders’ Agreement and State Support Agreement and get the State Acts amended so that the city SPVs (special purpose vehicles) have the powers to levy external and internal development fee and user’s fee. All across the world, new cities have taken three decades to develop, grow and evolve.
In India, we rush up with planning, engineering and execution all at the same time and make a mess of things. This is a unique opportunity for India to undertake sustainable urbanisation and use smart technology to leapfrog. We are confident of delivering on schedule in accordance with the timeline laid down by the government.
The DMIC has been portrayed as a symbol of Indo-Japanese strategic collaboration. However, the Japanese government seems no longer interested with it due to several regulatory issues...
The DMIC project is a partnership project between India and Japan, being driven at the level of prime ministers of the two countries. If Japan was not interested, why would JBIC (Japan Bank for International Cooperation) take 26 per cent equity in DMIC and the Japanese government create a $4.5-billion facility for DMIC project.
In fact, based on the progress made in DMIC, the Japanese government has decided to partner India in the Chennai-Bangalore Industrial Corridor project as well. There are regulatory issues, but we have overcome them in most of the cases. There will be challenges, but we must address them and move ahead.
It seems financing of the project has got stuck with delay in release of funds from Japanese side. Is that true?
This is not true. The finance minister, in his Budget speech has said resources would never be a constraint for the DMIC project. The government has approved an outlay of Rs 18,500 crore (Rs 185 billion)
Land is being provided by the state governments. The Japanese government has approved $4.5 billion for non-commercial projects through Japan International Cooperation Agency (JICA) and commercial lending through JBIC. I also feel Japanese companies should not be risk-averse and must take more risks.
The project also got marred due to several objections to acquisition of land...
State governments have used extremely innovative processes for land pooling and procurement. In Gujarat, almost 920 km is being taken through a process of town planning, with the participation of the local community.
In Shendra, Maharashtra Industrial Development Corporation has taken land through an extensive process of negotiation, rehabilitation and resettlement. In Rajasthan and Haryana, resettlement and annuity have been used.
Getting land will be through a process of negotiation and deliberations with the land owners, making them an integral component of the developmental process and skilling them for manufacturing, so that they can move to new jobs rather than live on disguised unemployment in agriculture.
The states have put in a lot of hard work at the grassroot level (by) interacting with the local communities. The new Land Acquisition Act has laid down a vast number of processes for social impact including clearances by several committees. These will need to be eased to make the corridor projects move faster.
Now with the impending elections, will it be given its due importance in case the present government changes and a new one comes in?
There has been complete unanimity on the imperative need for the industrial corridors across political parties. The opposition-ruled states - Gujarat and Madhya Pradesh -have been extremely pro-active.
I am sure the new government in Rajasthan will drive it vigorously. Uttar Pradesh was a slow starter, but it has now gained full momentum. Irrespective of the elections, the country requires manufacturing and creation of jobs for its young population.
We need job enhancement and not job-protecting measures. India needs not merely the Delhi-Mumbai Industrial Corridor, but also the Chennai-Bangalore, the Bangalore-Mumbai and the Kolkata-Ludhiana corridors.
This will, however, require a lot of political and administrative will as these are complex projects cutting across states.
What is the status of the project at present? Is it true the government has decided to break it into several minor projects?
Any large programme of this nature has to be driven down into smaller projects. DMIC was broken down into seven cities. These cities were planned and then broken into non-commercial trunk infrastructure and commercial PPP (public-private partnership) projects.
In the first phase, detailed engineering of trunk infrastructure is being carried out. You cannot create a new city without a backbone. You cannot bring in private parties without all clearances and approvals and without trunk infrastructure. It will become a complete real estate play. This is a long-term play.
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