Centre lines up Rs 1,325cr core push for industrial clusters

NEW DELHI: The government may have speeded up the policy framework for big companies to set up manufacturing investment regions (MIRs) and special economic zones (SEZs), but smaller enterprises aren’t losing out either.

The Centre has decided to boost the level of infrastructure support for 26 industrial clusters in the country and establish another 10 industrial estates. The estimated expenditure for the exercise is Rs 1,325 crore in FY07.

The funds will be spent by the ministry of commerce & industry under its industrial infrastructure upgradation scheme (IIUS). The ministry is seeking Rs 950 crore to modernise the infrastructure facilities in the 26 industrial clusters approved by it. There is also a proposal to increase the number of clusters to 36 from by infusing Rs 375 crore more. The ministry has sought approval from the Expenditure Finance Committee (EFC) for the additional funds, which will also mean raising the grant provided by the Centre for these clusters from Rs 356 crore to Rs 1,681 crore.

Currently, the government is undertaking the infrastructure linkages programme through 26 special purpose vehicles (SPVs) set up for each of the 26 clusters. The SPVs are being managed by the industrial associations formed in the cluster. The government is taking stock of the progress of infrastructure projects, which are specific to each cluster, depending on the nature of the economic activity.

The major clusters being supported under the scheme include the Tirupur textile cluster in Tamil Nadu, the auto cluster at Vijayawada in Andhra Pradesh, the Ludhiana textile cluster in Punjab, the gems & jewellery cluster at Surat and the auto components cluster in Pune. Among the states, Tamil Nadu has the most number of clusters at five.

The total allocation for these is about Rs 200 crore. The government has also approved four clusters for Gujarat with a total allocation of Rs 180 crore. It is now to be seen whether more states come forward with proposals for clusters. In the initial stages of the scheme, states had given a lukewarm response to the IIUS despite the government grant being offered to industries.