Special investment regions in India refer to specifically delineated areas that have been developed to promote manufacturing and enhance economic growth. The central government has taken steps to establish such regions across the country by providing world-class infrastructure, tax incentives and favourable policies. This initiative aims to attract domestic and foreign investment in the manufacturing sector which can lead to job creation and development of backward regions. The key objectives behind establishing special investment regions include making India a manufacturing hub, reducing logistics costs and time for exports, balancing regional development and promoting sustainable urbanization. Some of the major investment regions that have been planned are in states like Gujarat, Andhra Pradesh, Maharashtra and Tamil Nadu.
Special investment regions address infrastructure bottlenecks
One of the main aims of developing special investment regions in India is to provide top-notch infrastructure like uninterrupted power, water supply, road and rail connectivity. These regions are equipped with ports, airports, logistics hubs, social infrastructure like housing, hospitals and educational institutes. For instance, the Delhi Mumbai Industrial Corridor spans across 6 states and integrates 9 mega industrial zones, high-speed freight lines, three ports and six airports. Such infrastructure helps overcome bottlenecks and facilitates seamless movement of goods and services. It significantly reduces logistics costs and lead time which improves competitiveness of manufacturing.
Incentives offered to boost manufacturing investments
Special incentives are offered by central and state governments to boost investments in the manufacturing sector under these regions. These include exemption from customs duties, income tax holidays, concession in land cost and subsidized power tariffs. For example, units in the Kakinada special economic zone in Andhra Pradesh get 100% income tax exemption for first 5 years, 50% for next 5 years plus exemption from customs duties, sales tax, electricity duty etc. States also relax labor laws to some extent in these regions. Such incentives can motivate companies to set up manufacturing plants leading to job creation.
Policy support provided for ease of doing business
Special investment regions in India aim to provide a favorable ecosystem for manufacturing enterprises by easing regulatory formalities. Single window clearance mechanisms are instituted to enable time-bound project approvals. Investor facilitation centers are established to handhold investors and assist them in obtaining necessary permits/licenses. Self-certification and third party certifications are enabled to reduce compliance burden. Support is provided for obtaining environmental clearances. Such measures considerably improve ease of doing business in these regions.
Focus on balanced regional development
By establishing special investment zones in relatively backward regions, the government aims to spread out economic opportunities and bridge regional disparities. These regions attract private investment that can spur job creation and growth in remote areas. For instance, the Petroleum, Chemicals and Petrochemicals Investment Region in Andhra Pradesh focuses on encouraging investments in the southern coastal districts. The Vizag-Chennai industrial corridor covers the north-eastern districts of Andhra Pradesh that lag in development.
Integrated townships with social infrastructure
Special investment regions include integrated industrial townships that provide not just manufacturing infrastructure but also housing, hospitals, schools and other social infrastructure. Master planning is done keeping in mind the needs of enterprises as well as communities that will develop in the region. For instance, the Dholera special investment region will have an urbanized area to support a population of 2 million. Such integrated development can prevent haphazard growth and help build sustainable cities.
In summary, special investment regions in India aim to boost manufacturing investments and economic growth by providing world-class infrastructure, incentives, ease of doing business and focused regional development. They play an important role in making India a global manufacturing hub.