India plans industrial corridor bigger than Japan

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DHOLERA, (India), Oct 26 (Reuters): Chotubhai Raghani's fields in a dry, salty strip of Indian coastline on the Arabian Sea never yielded much wheat but he feels like a lucky man now he's started selling them at a juicy markup. He expects his land may one day make way for a car factory or an air-conditioned shopping mall, all part of what may be India's most ambitious infrastructure project ever. Excitement is rising almost as quickly as land prices in his village, one of the sites chosen for building 24 industrial cities from scratch along a 1,483-km (920-mile) railway line. The government plans to build a corridor bigger in land size than Japan, stretching from New Delhi down to the financial hub Mumbai in the west, that could help transform India's economic landscape and give its choked, teeming cities room to breathe. "It's going to change our lives," said Raghani. "We've tilled this land for generations but we only get a small mouthful out of it." Sceptics call the $90 billion project, known as the Delhi Mumbai Industrial Corridor (DMIC), over-ambitious. India, bogged down by corruption, staggering bureaucracy and land battles, has a long history of failed infrastructure plans. "It's a very crucial project for supporting GDP growth," said Pratyush Kumar, President and CEO of GE Transportation in India, a company with interests from railway engines to wind turbines. So far it is not involved in the DMIC project. "Nobody is saying that it's not moving, but the glacial pace will choke the GDP ambitions," he said. "The pace has to pick up and they need to get away from this whole decision-making paralysis of 'hey, we can't award large projects because of all the scams'." If the DMIC fails, Prime Minister Manmohan Singh's government will have lost a golden opportunity to sell India to investors and will feed the perception that, unlike China, it lacks the will to act when it counts. If it succeeds, the project could be the jolt Indian industry needs to sustain the country's heady economic rise. The timing couldn't be better amid global financial strife, rising interest rates and domestic policy stagnation caused by government corruption cases that have dampened confidence.