Linking India’s financial centre with its IT hub

 

PARVATHI MENON -THE HINDU

The Bengaluru-Mumbai Economic Corridor, as an anchor of the U.K.-India partnership, is set to change the economic landscape of the region it passes through

If there is a developing centrepiece of the U.K.-India economic engagement, which the coalition government of David Cameron has been active in promoting, it is perhaps the agreement on the joint development of the Bengaluru-Mumbai Economic Corridor.

The decision to cooperate in developing the projected 1,000-km corridor that will link the two cities — with provision for creating manufacturing hubs along the route, developing the towns and their hinterland, and creating both investment and job opportunities along and around its route — was part of the joint memorandum that was signed between the two countries when Mr. Cameron visited India in February this year.

The tender for the feasibility report for the project was issued this month, with a December 26 deadline for submissions. Officials from the Indian High Commission involved in the negotiations believe that progress has been remarkably fast for a project of this size and scope — a sign of the importance that the Indian government attaches to the project, as well as of British investment interest in the project.

An “exciting flagship for wider collaboration on infrastructure” is how Barry Lowen, Director, U.K. Trade Investment (India), which leads on the U.K. side, described the project toThe Hindu. “The U.K. has expertise on innovative ways to raise funding and promote green technologies in promoting infrastructure,” he said.

The 95-page tender for submitting the project’s feasibility study lays out the scope of the project. The funding for the study is to be underwritten by India, and is itself expected to run into millions of Great British Pounds.

The vision for the BMEC, as set out in the terms of reference of the feasibility study is of a “global exemplar both for commercially viable sustainable development and for attracting investments into manufacturing and clean infrastructure (potable water, clean energy etc).”

To achieve “comprehensive, accelerated and sustainable economic development with green technology and regional industrial and urban agglomeration, diffusing the regional population along the length of the corridor”, the BMEC will boost “regional industry agglomeration... attracting companies in the value chain of existing companies to the corridor, attracting particular industries where the corridor has geographical advantages or has advanced infrastructure for such industries.”

The project looks to create advantages for industrial development along the corridor, creating linkages that will provide quick access to production units in a way that will reduce transportation time, costs of logistics and inventory.

The corridor will start from Bangalore, passing through Tumkur, Chitradurga, Hubli, Dharwad and Belgaum in Karnataka), Kolhapur, Sangli, Satara, Karad and Pune and end in Mumbai (in Maharashtra).

“It represents a fantastic opportunity to develop the engagement between the two countries,” said Amarjit Singh, Associate Solicitor in Dutton Gregory LLP and Head of India Business Group in the UK, who also accompanied Mr. Cameron on his visit to India in February.

“Significantly, the corridor will link Mumbai, the financial centre of India and Bangalore, the country's IT hub. The U.K.’s capabilities in both sectors are world-class,” he added.

The model for the corridor is the Delhi Mumbai Infrastructure Corridor that is currently under development with Japanese funding. The nodal agency on the Indian side is the Department of Industrial Promotion under the Ministry of Commerce and Industry. Once chosen, the company/consortium must meet an eight month deadline to submit a Perspective Plan for overall development of the BMEC region along with a concept report for the greenfield megacities conceived as part of it. Foreign companies can apply.

Actual work on the project is unlikely to get off the ground before 2015, and even that is an optimistic expectation given the challenges that lie ahead.

Hurdles

The first hurdle relates to the political environment: the new government that will be elected in the 2014 Lok Sabha elections must ratify the agreement. Assuming that the new government does so and allowing for possible changes to the corridor route dictated by political or other reasons, the project must get the critical environmental clearances. Only after this can the thorny issue of land acquisition be taken up.

It should be recalled here that Posco, the Korean steel giant cancelled its plans for a $ 5.3 billion steel mill development project near Dharwad in Karnataka primarily due to popular opposition to land acquisition for the construction of its plant.

Secondly, if past experience is a guide, land prices along the route will explode once the plan is announced, creating dispossession on the one hand and speculation by land sharks on the other. Third, the BMEC corridor passes through relatively less industrialised areas when compared to the Delhi Mumbai Industrial corridor. Analysis of the trends in foreign direct investment indicates that DMIC States cater to 52% of total Foreign Direct Investment equity inflows in to the country. Mumbai and Delhi regions together constitute 92% of total FDI equity inflows amongst the project States.

Even with these advantages, the DMIC, which was conceived between India and Japan in mid-2007 and projected to cost $90 billion (Rs. 4,23,000 crore), is still years from completion.

Sources close to the project in the U.K. Foreign Office told The Hindu that one of the primary concerns on the British side relates to the multiplicity of Central and State laws that will have to be negotiated, a process they fear could cause delays. The BMEC, when it finally does see the light of day, will undoubtedly change the economic landscape of the region it passes through, a process that Britain will doubtless reap the financial rewards of. What India’s gains will be depends entirely on how the benefits and losses of this game-changing project will be shared.

parvathi.menon@thehindu.co.i
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India A thrash West Indies A in Hubli to draw series 1-1

Hubli (Karnataka), Oct 12: Zaheer Khan took four wickets on the final day as India A defeated West Indies A by an innings and 54 runs in the third and final unofficial Test here on Saturday. The three-match series was drawn 1-1. 

The visitors had won the first match in Mysore and the second was a draw in Shimoga. On the fourth and final day, West Indies A resumed at 116/3, still training by 280. Overnight batsman Narsingh Deonarine continued to fight and came very close to a century but fell just 1 run short, bowled by Zaheer for 99. He batted for 180 balls hitting 13 boundaries. Assad Fudadin contributed 49 but the rest of the batsmen failed. 

The visitors were bowled out for 242 in 73.5 overs. Jahmar Hamilton did not bat as he was injured. Abhishek Nayar took two wickets. Zaheer finished with 4/59 in 16.5 overs. 

The hosts' lead was set up by captain Cheteshwar Pujara's triple hundred on Friday. He hit 306 not out.

Pictures Courtesy: Pavan

Hero Motocorp likely to set up mega plant in Dharwad

STAFF CORRESPONDENT - The HinDU

  

Government has already held two rounds of meetings with owners in Delhi: Aravind Bellad

Hero Motocorp, a leading two-wheeler manufacturer in India, is likely to set up a production unit here.

Aravind Bellad, MLA, told presspersons here on Saturday that the government had already held two rounds of meetings, and the project is likely to get the green signal during the winter session of the State Legislature to be held in Belgaum in November.

The high-level meeting with officials and owners of Hero Motorcorp was held in New Delhi, and officials had expressed eagerness to set up a two-wheeler manufacturing unit in Dharwad. This unit will come up in 500 acres in Mummigatti near here. Company officials have stated that Rs. 1,200 crore would be the direct investment, with Rs. 800 crore as ancillaries, bringing the total investment for this mega plant to Rs. 2,000 crore.

They also revealed that this plant would create 5,000 jobs, a number which will be increased to 40,000 jobs in a phased manner. The unit would manufacture 1.5 million two-wheelers and their parts; a testing track will also be set up.

Mr. Bellad said Hero Motocorp would hold meeting with the Chief Secretary in Bangalore to discuss their wishlist.

The company had approached the government last year, however, discussions could not be completed and hence the project had taken a backseat. Now, this project has once again gained momentum, and there are all possibilities of making it a reality during the winter session.

To a query, he said the company had demanded 500 acres, as well as water and power facilities.

The Karnataka Industrial Area Development Board has the land in its possession and the government in principle has assured of providing other facilities. He clarified the company had not asked for the creation of a township, but he would pressure the government to grant other basic facilities.

The area from Belur to Hubli airport is being transformed into a high-economy zone. The establishment of this mega plant would be the first step towards that goal, Mr. Bellad said.

Officials have been asked to give priority to local talent during recruitment. Besides, optimum salary would be given to the local youth, he said.

Bangalore ITE.biz to be held in Hubli on Oct 8

Hindu Businessline

Bangalore ITE.biz, the flagship event of Karnataka for the promotion of IT/ITeS sector, is planning to hold its maiden one-day conference at Hubli on October 8.

The event is organsied by Karnataka IT, BT and S&T departments and co-hosted by the Software Technology Parks of India (STPI).

“The event will be addressed by the captains of ITE industry where they are expected to share the insights on the latest trends that will shape the future of IT and Electronics sector,” Sasikumar V, Officer In-charge, STPI Hubli, said.

STPI and the Karnataka Government have been conducting ‘Bangalore ITE.biz’ for the past 15 years at Bangalore. “Now for the first time, we are organising the satellite event in Hubli on October 8 at The Gateway Hotel, Hubli,” Sasikumar said.

S.R. Patil, Karnataka Minister for IT, BT, S&T, Planning & Statistics, will be the chief guest. Mohandas Pai, Chairman, Manipal Global Education, will deliver the keynote address.

Panel discussion

The event will see three panel discussions on ‘Taking IT Beyond Bangalore: Enablers and Challenges; Focus Hubli-Dharwad’.

‘Opportunities in ESDM: Focus Hubli-Dharwad’ by India Electronics & Semiconductor Association (IESA).

‘Fostering a Culture of Innovation in Enterprise’ by Nasscom and followed by Networking Lunch and B2B Meetings on request.

For more details, contact Sasikumar V., STPI Hubli, Tel:0836-2257093 .