The Union Cabinet today gave its approval for setting up the Amritsar-Kolkata Industrial Corridor (AKIC) and formation of the AKIC Development Corporation (AKICDC).

The AKIC is proposed to be developed in a band of 150-200 kms on either side of Eastern Dedicated Freight Corridor (EDFC), in a phased manner, and would therefore comprise a belt of at least 5.5 lakh square kms in the seven States of Punjab, Haryana, Uttarakhand, Uttar Pradesh, Bihar, Jharkhand, West Bengal.

Phase-1 will be in the nature of a pilot project, during which at least one Integrated Manufacturing Cluster (IMC) of 10 square kms each, in each of the seven States would be set up, as identified by State Governments. The States would however, be free to set up more than one IMC, if they choose to do so. Uttarakhand, being a hill state would be given flexibility with regard to the size of the cluster. Both brownfield as well as green field IMCs can be set up.

At least 40 percent of the land in each IMC will be permanently earmarked for manufacturing and agro-processing, considering that substantial part of the area in these States, except Jharkhand, is under agriculture.The IMCs envisaged under the project would be entitled to all the benefits available under the National Manufacturing Policy (NMP), 2011, provided they are organized as envisioned in the NMP.

For infrastructure development, a Public Private Partnership (PPP) mode would be encouraged. While viability gap funding would be available for infrastructure amenable to PPP, trunk infrastructure not amenable to PPP will be developed through grant-in-aid from the Central Government.

The Central Government will also provide interest subsidy to States for land acquisition, grant-in-aid for project development and master planning of IMCs, set up AKICDC, provide external connectivity and all benefits under NMP, 2011, facilitate the establishment of tool room in clusters, enable technology partnership with Indian Institutes of Technology/National Institutes of Technology, grant of approvals for the IMC as well as help State Governments to promote global investments in clusters.

State Governments would be responsible for ensuring availability of land for development of IMCs, necessary spurs for road infrastructure, facilitate generation, transmission and distribution of electricity in IMCs, putting in place single window clearance mechanism, setting up Special Purpose Vehicle (SPV) for development of clusters, identify and facilitate anchor industries in the IMCs, ensure provision of built up places and low cost housing.

A three tier institutional structure at the Central level will be set up comprising an Apex Monitoring Authority under the Industry Minister, an Inter-Ministerial Group (IMG) under Secretary, Department of Industrial Policy and Promotion (DIPP) and the AKICDC for project development, coordination of implementation of the projects and inter-state activity.

At the State level, a cell under the Chairmanship of Chief Secretary/Industrial Development Commissioner would be constituted. State Governments will set up a nodal agency at the cluster level for administration of clusters, or nominate an existing Special Purpose Vehicle (SPV).

For approval of individual IMC, in the first stage, based on an appraisal of the proposal by the Inter-Ministerial Group, `in-principle` approval will be accorded , and final approval would be granted after the conditions laid down in the `in-principle` approval and other conditions that may be considered necessary are fulfilled, through a detailed prescribed process.

A financial indicative commitment of about Rs 5600 crore, spread over 15 years, by way of budgetary support from the Central Government has been estimated in the first pilot phase for setting up seven IMCs in the AKIC.

The Union Cabinet also approved that AKICDC will be set up immediately with a total equity base of Rs 100 crore, with 49 percent stake of the Central Government, with balance equity to be taken by stakeholder State Governments as per option and willingness, and HUDCO.The Central Government will also provide Rs 100 crore as project development fund to AKICDC.

Industrial corridor development enabling integrated manufacturing clusters with PPP infrastructure and centralized project development support. Establishment of the Amritsar-Kolkata Industrial Corridor and formation of AKICDC to develop phased Integrated Manufacturing Clusters (IMCs) along the Eastern Dedicated Freight Corridor. IMCs may be brownfield or greenfield, must earmark land for manufacturing and agro processing, and qualify for National Manufacturing Policy benefits if organized as required. Infrastructure will be promoted via PPP with viability gap funding and grant in aid for trunk works; the Central Government will provide interest subsidy for land acquisition, grants for planning and project development, external connectivity support, and project development funds to AKICDC. A Central three tier governance structure and State nodal agencies/SPVs will coordinate approvals, implementation, and facilitation of land, utilities, and clearances.