ADB Loan for Chennai - Kanyakumari Industrial Corridor

• 17 Jun 2021

Why in News

Recently, the Asian Development Bank (ADB) and the Government of India signed a USD 484 million loan for the Tamil Nadu Industrial Connectivity Project.

• The loan is to improve transport connectivity and facilitate industrial development in the Chennai - Kanyakumari Industrial Corridor (CKIC) in the state of Tamil Nadu.

Asian Development Bank

• It is a regional development bank established on 19^th December 1966. It is headquartered in Manila, Philippines.
• It now has 68 members, 49 from within Asia. India is a member.
• It’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).
• It aims to promote social and economic development in Asia and the Pacific.

Key Points

• About:
  
  • The loan is in line with Strategy 2030, ADB’s long-term corporate strategy, the project emphasises sustainability, climate change resilience, and road safety elements.
    
    • Under Strategy 2030, ADB will expand its vision to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
  • CKIC is part of India’s East Coast Economic Corridor (ECEC).
• Industrial Corridors Scheme:
  
  • An industrial corridor is an economic ecosystem built around a transportation corridor connecting two major economic centres, where the transportation corridor serves as the nerve centre of the economic activity across the corridor.
    
    • In addition to the transportation corridor, a well-designed industrial corridor contains clusters of industrial production serving regional and global demand, and urban centers proliferating equitable development.
  • In 2019, the government approved the development of the five industrial corridor projects, being implemented through National Industrial Corridor Development and Implementation Trust (NICDIT).
    
    • NICDIT is an apex body under the administrative control of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
  • Five Industrial Corridor Projects:
    
    • Delhi Mumbai Industrial Corridor (DMIC).
    • Amritsar Kolkata Industrial Corridor (AKIC).
    • Chennai Bangalore Industrial Corridor (CBIC).
    • East Coast Economic Corridor (ECEC) with Vizag Chennai Industrial Corridor (VCIC).
    • Bangalore Mumbai Industrial Corridor (BMIC).

• East Coast Economic Corridor:
  
  • It stretches from West Bengal to Tamil Nadu and connects India to the production networks of South, Southeast, and East Asia.
    
    • ADB is the lead partner of the Government of India in developing ECEC.
  • It covers West Bengal, Odisha, Andhra Pradesh and Tamil Nadu. Vizag to Chennai segment of this Corridor has been taken as phase-1.
    
    • Vizag-Chennai Industrial Corridor (VCIC) is the first coastal economic corridor in the country.
  • It is aligned with the Golden Quadrilateral. It also plays a critical role in the “Act East Policy” of India.
    
    • The Golden Quadrilateral is the longest road project in India and the fifth-longest highway in the world. It connects Delhi, Mumbai, Kolkata and Chennai.
• Significance of Industrial Corridors:
  
  • Avenues for Exports:
    
    • The Industrial Corridors are likely to lower the cost of logistics thereby increasing the efficiency of industrial production structure.
    • Such an efficiency lowers the cost of production which makes the Indian made products more competitive in international markets.
  • Job Opportunities:
    
    • It will attract investments for the development of Industries which is likely to create more jobs in the market.
  • Environmental Significance:
    
    • The establishment of Industrial Units in a scattered manner along the industrial corridor across the length of the state will prevent concentration of industries in one particular location which exploited the environment beyond its carrying capacity and caused environmental degradation.
  • Socio-Economic Significance:
    
    • The cascading effect of industrial corridors in socio-economic terms are many such as the setting up of industrial townships, educational institutions, hospitals. These will further raise the standards of human development.

Source: PIB