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    From Tehelka Magazine, Vol 9, Issue 32, Dated 11 Aug 2012

    This corridor is paved with bad policies

    The Delhi-Mumbai Industrial Corridor is yet another example of the Centre’s flawed approach towards creating infrastructure

    By Nitin Desai

    Nitin Desai

    Photo: Vijay Pandey

    INFRASTRUCTURE PLANNING in India seems to be prone to two escapist fantasies. The first is that the answer to poorly performing state systems is to turn to the private sector for rescue. This worked for the telecom sector and the thought is that we can repeat that success in other sectors such as power and roads. But, unlike telecom where the dramatic technological change in mobile telephony was a game-changer, there is no such option available in a networked power system and interconnected road network. There is no substitute for reforming public systems as our experience with private sector engagement in the power sector has shown.

    The second fanciful vision is to run away from the difficult problem of strengthening infrastructure where it exists and preferring to establish development enclaves in greenfield sites. We saw this initially in the vast public-sector townships that were set up in the 1950s and ’60s, even when the producing unit was located near an established urban area such as Bangalore or Hyderabad. This escapist approach was combined with privatisation in the SEZ policy, which was a thinly disguised land grab for urbanisation by the private sector. The underlying thought was that we cannot bring all of India up to the level of infrastructure service required; so let us create enclaves where the private sector is given the land and the policy space to create what are described as world-class facilities.

    These two strands have come together in the mega-project called the Delhi-Mumbai Industrial Corridor (DMIC). This is a project built around the proposed High-speed Freight Corridor between the two cities, which the Japanese government is promoting, presumably to find an outlet for surplus rail equipment capacity in that country.

    The project area stretches from western Uttar Pradesh and Delhi, through Haryana, eastern Rajasthan, western Madhya Pradesh, Gujarat and northwestern Maharashtra. But the bulk of the benefits will accrue at the two ends in Haryana and in Gujarat and Maharashtra and not in the less-developed states through which the corridor passes. According to the Perspective Plan prepared by Scott Wilson, a project consultancy, 80 percent of the incremental industrial output over business as usual will arise in the three more developed states.

    The project’s concept paper, written in 2007, is wildly ambitious and talks of doubling employment potential, tripling industrial output and quadrupling exports from the DMIC region within five years. The Perspective Plan is more restrained and frames these goals in a timeframe that stretches to 2019. We are in 2012 and these grandiose goals are nowhere in sight.

    But the problem is more than just delusions of grandeur or me-too attempts at imitating what China has done or Japan did some decades ago. Even if the goals were attainable, there are deeper problems with this proposal.

    The DMIC plan is very much a product of the escapist fantasies mentioned earlier. It is replete with references to public-private partnerships and setting up industrial areas and infrastructure in greenfield sites. Thus, the plan talks about greenfield megacities at Dhar, Pune, Surat, Alwar, Rewari and Muzaffarnagar.

    THE PROPOSED corridor will pass through some of the driest areas of the country. Even the Perspective Plan, prepared by the DMIC consultants, recognises that nearly two-thirds of the districts in the region are in an overexploited, critical or semi-critical state as far as groundwater is concerned. In the case of Gujarat, the plan states, “Major uses for domestic and irrigation from groundwater are likely to leave hardly any balance for industrial use. The state policy of Gujarat would need to allocate water for industrial use from the resources for irrigation, depending upon the priority and requirement in the investment regions of Gujarat.” There is an identical statement for Haryana. As for Uttar Pradesh, the plan states, “Although the groundwater status in every district shows a good surplus, major uses for domestic and irrigation and slow replenishment are likely to leave hardly any balance for industrial use.” In Rajasthan, the plan seems to rely completely on water from the Indira Gandhi canal. Nor is the situation much better when it comes to surface water. In fact, the overall picture presented in the plan shows a clear deficit in Gujarat, Maharashtra and Haryana.

    Did someone in the DMIC management look into the desirability or political feasibility of diverting water from agriculture? Does the plan adequately take into account the new urban demands that will arise if the growth in industrial employment were to be realised?

    The DMIC plan projects a massive migration into the region amounting to some 94 million new migrants (over business as usual) by 2039. Has anybody exercised their mind as to whether migration on this scale is possible or desirable? Has anyone asked what the social consequences of this scale of migration could be? And most important of all, why not plan infrastructure so that jobs go to people rather than people to jobs.

    If one follows this last line of thought, then what we need is not a Delhi-Mumbai Industrial Corridor but a Delhi-Kolkata Industrial Corridor. Over the coming decades, our surplus labour will be largely in the Gangetic belt and that is where we need to create jobs. The Population Foundation’s longterm projections show that the share of Uttar Pradesh, Bihar and Jharkhand in the growth in the population in the 15-65 age bracket will be 41 percent in 2011-31 and as much as 51 percent in 2011-51. High growth in India depends on cashing in on this demographic dividend and that means shifting the locus of growth to the northern states where this will arise.

    In the near future, our surplus labour will be largely in the Gangetic belt and that is where we need to create job opportunities

    Yes, it is a tough call because there are huge challenges of governance, skill development and infrastructure that will have to be tackled. But it may still be easier than working on a plan that shifts nearly 100 million people from these states to the DMIC area.

    There may be other plus points like the easier availability of water resources and the possibility of using river transport. But if this is to be achieved, then it must be done in a far more decentralised manner than the DMIC project, with the active participation and engagement of not just the state governments concerned but also the municipal bodies along the way.

    The DMIC plan involves huge outlay and there has been surprisingly little public discussion of its feasibility or its merits. But so far, not much has been done except to commission reports and it is possible to stop it in its tracks. It must be subjected to a broader public discussion not just on its design but on its desirability, and other options for accelerating industrial growth and employment must be explored.

    The views expressed in this column are the writer’s own

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    From Tehelka Magazine, Vol 9, Issue 32, Dated 11 Aug 2012



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