The building of Regional powerhouses creates world class infrastructure and, accelerates industrial clusters and specialisation. However, there is an impact on the Informal Economy. The Delhi Mumbai Dedicated freight Corridor is another case in point.[i]
The Government of India has announced the development of the Dedicated Freight Corridor between Delhi and Mumbai, covering an overall length of 1483 kms and passing through seven States. The DFC will offer high speed connectivity for High Axle Load Wagons (25 tonnes) of Double Stacked container trains and the roads will parallel the tracks.
The concept offers significant opportunities to develop high-speed connectivity within a band of 150 kms either side of the rail and road arteries. The vision is to create a strong economic base within the band with a globally competitive environment and state-of-the-art infrastructure to activate local commerce, enhance foreign investments and attain sustainable development.
The DFC will generate investments of $90 Billion, offering employment opportunities for over 67% in the manufacturing and processing industries.
It will be useful to explore the impact upon the local informal economy, and to trace whether the displacement of traditional informal activity gives rise, or not, to other informal configurations such as outsourcing to support the manufacturing sector that will emerge in the corridor.
And another cautionary note would be to remind ourselves of those specialist towns all over Europe and North America where the impact of lower cost production in another part of the world can destroy an industry and depress a whole region rapidly. Think of Lowell, Massachusetts – once the largest shoe manufacturing town in the world eventually undermined by cheaper producers elsewhere and condemned to a lengthy decline. Think of all of the rust belts throughout Europe, North America and even Asia. Further back, think of the Indian textile industry of the 18th century which was dominant worldwide only to be destroyed by the suddenly superior technology of the British mills of the 19th century.