New Delhi: The Union Cabinet has approved a policy that will create India’s first-ever investment zones dedicated to the petroleum, chemicals and petrochemicals sectors.
Announcing decisions taken by the Cabinet committee on economic affairs on 8 March, finance minister P. Chidambaram said up to five petroleum chemicals and petrochemicals investment regions (PCPIRs) would be set up in the country.
The petroleum regions, a concept similar to special economic zones, have been under consideration by the government for a year.
They are meant to promote investments from India and abroad in specialised regions, with infrastructure and easier access to markets to promote competitive business development in these sectors.
“Many other countries have regions with excellent infrastructure and competitive environments for business in this sector. It is time that India adopts this model too,” Chidambaram said.
The minister refused to comment on whether incentives along the lines of special economic zones, which allow companies to operate tax free, have also been approved for PCPIRs.
Apart from Chidambaram, commerce and industry minister Kamal Nath and Planning Commission deputy chairman Montek Singh Ahluwalia are members of a Group of Ministers headed by chemicals and fertilizers minister Ram Vilas Paswan who examined the feasibility of PCPIRs.
It is estimated that PCPIRs will attract up to $30 billion (Rs132,600 crore) in the first three to four years of operation.
Capital investments worth around $10 billion will have to be made in each region, which are expected to span up to 250 sq km.
Investment-worthy regions currently identified by government and investors alike include coastal areas such as Haldia in West Bengal and Visakhapatnam in Andhra Pradesh.
In other decisions, the Cabinet approved new guidelines for corporate governance in central public sector units.
For PSUs with a non-executive chairman, at least a third of the board must consist of independent directors.
For PSUs with an executive chairman, half the board should comprise independent directors, the approved guidelines say.
The Cabinet has also approved ratification of an inter-governmental agreement on Trans-Asian Railways (TAR) under which the Indian Railways can expand its network to create direct links with other Asian nations. This agreement is open to be signed over the next two years.