Asian Development Bank offers 250 million US dollars for Industrial corridor projects

The Government of India and Asian Development Bank (ADB) signed a 250 million US dollars policy-based loan on December 15th that will continue support to Industrial Corridor development to make manufacturing more competitive, strengthen national supply chains and links with regional and global value chains, and create more and better jobs.

The signatories to the loan agreement for the Industrial Corridor Development Program (Subprogramme 2) were Ms. Juhi Mukherjee, Joint Secretary, Department of Economic Affairs, Ministry of Finance, for the Government of India, and Mr. Hoe Yun Jeong, Deputy Country Director, and Officer-in-Charge of ADB’s India Resident Mission, for ADB.

This loan builds on the $250 million Subprogramme 1 loan approved by ADB in October 2021 that helped strengthen policy frameworks for the Government of India’s National Industrial Corridor Development Program (NICDP) and develop 11 industrial corridors.

Industry sources said there is hardly any progress in the Industrial corridor projects in southern India though these projects were conceived nearly 10 years ago due to various issues including land acquisition problems lack of monitoring at the highest level leading to indefinite delays in their implementation.  The very same issues were rapidly addressed by the PMO in the case of Delhi Mumbai and Ludhiana Kolkata corridors. The projects were monitored on a weekly basis by the PMO and were completed in eight years.  Such monitoring is however not available for the industrial corridor projects.

The Delhi Mumbai corridor costing several lakh crores rupees was funded by a Japanese bank while Ludhiana corridor costing the same was funded by the World bank’

After signing the loan agreement, Ms. Mukherjee acknowledged ADB’s continued support to the effective implementation of the NICDP the government launched in 2016 and updated in 2020 to strengthen the planning and management of designated industrial economic clusters to attract private infrastructure and manufacturing investments.

“The loan for the Sub program 2 will help in the integration of industrial corridors with transport, logistics and urban facilities under the government’s Prime Minister Gati Shakti platform,” said Mr. Jeong. “It will promote gender equality in manufacturing and corridor development, as well as conduct training and up-skilling of workers in industrial corridors.”In addition, the second subprogram will help industrial corridors develop alternative financing solutions, such as green finance, for industrial cluster development. It will also improve industrial workplace safety and integrate environment and climate change practices in these areas. To help improve the investment climate, and in line with the ease of doing business, the program will introduce a synchronized Central and State-level single window clearance system and digitize processes to streamline the logistics process.