India And ADB Ink $250M Loan For Industrial Corridor Development

 

The Government of India and the Asian Development Bank (ADB) recently solidified their collaboration with the signing of a $250 million policy-based loan on December 15, 2023. This financial support, part of the Industrial Corridor Development Programme (Subprogramme 2), aims to enhance manufacturing competitiveness, fortify national supply chains, and integrate with global value chains.

Continuing Support and Key Signatories

Ms. Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, represented the Government of India, while Mr. Hoe Yun Jeong, Deputy Country Director, and Officer-in-Charge of ADB’s India Resident Mission, signed on behalf of ADB. This agreement builds upon the $250 million Subprogramme 1 loan sanctioned in October 2021, which played a pivotal role in shaping policy frameworks for the National Industrial Corridor Development Programme (NICDP).

Strengthening Industrial Corridors

The NICDP, initiated in 2016 and updated in 2020, focuses on effective industrial corridor development. The Subprogramme 2 loan will further integrate industrial corridors with transport, logistics, and urban facilities under the Prime Minister Gati Shakti platform, emphasizing comprehensive development.

Gender Equality and Skill Development

Mr. Jeong highlighted the loan’s broader objectives, including promoting gender equality in manufacturing and corridor development. The funds will support training and upskilling initiatives for workers within industrial corridors, contributing to a more inclusive and skilled workforce.

Sustainable Practices and Alternative Financing

Subprogramme 2 emphasizes the adoption of alternative financing solutions, such as green finance, to foster sustainable industrial cluster development. The initiative also prioritizes improving workplace safety, integrating environmental practices, and addressing climate change concerns within industrial areas.

Streamlining Processes and Enhancing the Investment Climate

To enhance the investment climate and align with the ease of doing business, the programme introduces a synchronised Central and State-level single window clearance system. Additionally, digitization processes will streamline logistics, ensuring a more efficient and transparent business environment.

Job Creation Across Diverse Sectors

The programme’s impact is anticipated to extend to various sectors, including agribusiness, automotives, electronics, food and beverages, heavy machinery, pharmaceuticals, and textiles. By creating jobs in industrial nodes, it is expected to contribute significantly to poverty alleviation in the corridor states.

Questions Related to Exams

Q1. Which program does the $250 million loan contribute to, and what is its significance?

Answer: The loan contributes to the Industrial Corridor Development Programme, focusing on shaping policy frameworks and comprehensive development.

Q2. What platform will benefit from the integration of industrial corridors with transport and logistics under the loan agreement?

Answer: The integration will occur under the government’s Prime Minister Gati Shakti platform.

Q3. What specific sectors are expected to benefit from the job creation initiatives under the programme?

Answer: Sectors such as agribusiness, automotives, electronics, food and beverages, heavy machinery, pharmaceuticals, and textiles are expected to benefit.