GoI sees the initiative drawing in investments that can create 4 mn direct and indirect jobs, and seed clusters of investments by small enterprises. The idea is to have industry-specific hubs that can sustain themselves as global manufacturing bases. This meshes into PLIs available to select industries and the recently announced incentives to encourage hiring new job seekers.
The idea of industrialisation through dedicated urban pockets has had a long history in India. Public and private sectors have made the anchor investments. Mining, petrochemical and manufacturing hubs have mushroomed all over the country with active support from the central and state governments.
The focus has shifted to drawing in investors who are evaluating India as a base for global manufacturing. GoI is also trying to improve the attractiveness of the hinterland over port access, which influences investment decisions in manufacturing exports.
Any success with drawing investments to the northern states will build on the infrastructure upgrades the country has witnessed over the past decade.
Yet, just as PLI schemes have yielded a range of outcomes, industry-specific smart industrial cities can be expected to be a mixed bunch. There is also the matter of bringing states on board to deliver on the potential of these townships. State governments have a conspicuously large role to play in the ease of doing business, apart from contributing financially to the development of these clusters. The proposed 12 industrial smart cities are spread over 10 states, some of which have noticeably lagged in industrialisation.
