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Day 13 – Q 5.How effective is be the idea of developing industrial corridors? Comment. What are the challenges associated with this policy? Examine.

5 How effective is be the idea of developing industrial corridors? Comment. What are the challenges associated with this policy? Examine.

औद्योगिक गलियारों के विकास का विचार कितना प्रभावी है? टिप्पणी करें। इस नीति से जुड़ी चुनौतियाँ क्या हैं? जांच करें।


The different sectors of an economy are inter-dependent on each other. Industrial corridors, recognising this inter-dependence, offer effective integration between industry and infrastructure, leading to overall economic and social development.

TLP SYNOPSIS [Day 13 - 23rd Oct, 2019]: UPSC Mains General Studies Questions

TLP SYNOPSIS [Day 13 – 23rd Oct, 2019]: UPSC Mains General Studies Questions


Effectiveness of Idea of developing industrial corridors

Industrial corridors have typically been built along major transport arteries and offer cost effective and efficient access.

  • An industrial  corridor is a  package of infrastructure  spending allocated to a specific geographical area, with the intent to stimulate  industrial development. An industrial corridor aims to create an area with a cluster of manufacturing or other industry.
  • Besides allocating  a package of infrastructure  spending to a specific geographical  area, industrial corridors help in flourishing  industrial development by creating manufacturing  clusters and ancillary industries. Besides smart cities, these corridors will be well-connected by road, rail, air or sea. Industrial corridors will help attract talent in large numbers and achieve 100 million job targets easily. 
  • Delhi Mumbai Industrial Corridor(DMIC): is about developing Greenfield future cities with backward integration to the dedicated freight corridor.  At present, all goods produced in the northern part of India take 12-13 days to reach the ports on the western coast. The cost of transportation in India is, therefore, very high. The 1,483km-long dedicated freight corridor will transport goods within 12-13 hours. The DMIC project covers the six States of Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra. With an envisaged investment of $100 billion by 2040, the 1504-km DMIC across six states was intended to be developed as a ‘global manufacturing and trading hub’. The project was one of the important measures announced by the government to help drive the share of manufacturing in the country’s GDP to 25% by 2022 from roughly 16% now.


  • Bengaluru-Mumbai Economic Corridor (BMEC) :The Bengaluru Mumbai Economic Corridor (BMEC) in intended to facilitate the development of a well-planned and resource-efficient industrial base served by world-class sustainable connectivity infrastructure, bringing significant benefits in terms of innovation, manufacturing, job creation and resource security.


  • The Chennai Bengaluru Industrial Corridor (CBIC): will achieve the goal by providing smooth access to industrial production units, reducing transportation logistic costs and improving delivery time as well as decreasing inventory cost. This will ensure increased private investments in manufacturing and industrial activity in the three states.
  • Vizag Chennai Industrial Corridor (VCIC): is the first coastal economic corridor in the country. It is part of the East Coast Economic Corridor (ECEC)It covers more than 800 km of Andhra Pradesh’s coastline and is aligned with the Golden Quadrilateral.23 It also plays a critical role in the “Act East Policy” of India. The “Act East Policy” focuses on increasing the integration of the Indian economy with the economies of the Association of the Southeast Asian Nations (ASEAN).

Challenges associated with Industrial corridor policy

  • The foremost problem being faced in setting up industrial corridor is Land Acquisition. Since the industrial corridor would cut across the length of the state, acquisition of land has been slow because of legal hurdles and the amount of compensation.
  • Since India lacks technological knowhow in certain sectors, it would be prudent to raise FDI caps to allow foreign players to bring in the required technological knowhow and encourage Indian investment in setting up ancillary and auxiliary industries in that sector.
  • India’s taxation regime needs to clearly define the tax liabilities of foreign firms operating in India as permanent establishments and otherwise.
  • Macroeconomic stability is necessary to have a stable exchange rate so that foreign players with investments in India can avoid currency risks.
  • India needs to clearly lay down ground rules for cancellation of licenses in Bilateral Investment Treaties which could later create confusion as in case of Antrix-Devas deal.
  • The economic and financial feasibility of industrial corridors should be ensured by attracting potential investors to set up manufacturing units at NMIZ.


Industrial corridors planned in India are mega-projects and futuristic vehicles of economic growth. Projects of this mammoth nature need thorough visualization, planning and extraordinary meticulous execution. Comprehensive policy frameworks and its implementation are mandatory for the success. Adaptation to local conditions is very important in preparing and refining the policy imperatives for industrial corridors in India. “Less of government and more of governance” is the mantra for future.

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