Industrial corridors and special economic zones

An industrial corridor is a planned belt of infrastructure and industry built around a transport spine, such as a highway, railway line or port connection. The idea is that factories do best when they are near each other and near reliable transport, power, water and logistics, rather than scattered where land happens to be cheap. India has pursued corridors such as the Delhi-Mumbai Industrial Corridor, and a national programme for industrial corridors, with nodes or new industrial townships planned along the route.

Special economic zones, or SEZs, use a different device: a demarcated area treated as outside the customs territory for authorised operations, with simplified procedures and tax benefits prescribed by law. The SEZ policy was announced in April 2000. The Special Economic Zones Act was passed by Parliament in May 2005, received presidential assent on 23 June 2005, and the SEZ Rules came into effect on 10 February 2006. Units in a zone are expected to export, and developers and units receive benefits set out in the Act and Rules.

Both devices raise the same land and livelihood questions. Corridors and zones need large, contiguous plots, which means acquiring or pooling agricultural or common land. Supporters argue that planned industrial land, with trunk infrastructure laid in advance, avoids the congestion and pollution of unplanned growth and creates jobs near where people live. Critics argue that land acquisition has displaced farmers and villages, that promised jobs have not always matched the land taken, and that tax benefits have sometimes rewarded activity that would have happened anyway.

Coordination is the practical test. A corridor crosses state boundaries and involves railways, highways, ports, power utilities and urban bodies, so the PM Gati Shakti National Master Plan was created to bring infrastructure planning onto a common platform. A zone needs a single-window system that actually works, reliable utilities, and links to ports and domestic markets; a zone that is only a tax address, without logistics and skilled workers, will struggle to attract lasting investment.

For study purposes, corridors and zones should not be treated as magic answers. They are instruments for concentrating infrastructure and simplifying administration. Their record should be judged on exports, jobs, domestic linkages, environmental compliance and the fairness of land deals, not on the area notified or the number of approvals granted.