Cabinet nod for rural clusters

S Narayan, economic advisor in the Prime Minister's Office, said the union cabinet had approved the setting up of 5,000 rural clusters in the country with improved infrastructure to promote the development of agriculture and small-scale industries.

Speaking at a seminar organised by the Assocham on economic growth clusters, Narayan said the proposal was approved at the last meeting of the Cabinet on February 4.

He said the aim of the cluster approach was to ensure that whatever was produced in the area must be provided with an assured market access.

The economic adviser said these clusters would be provided with the three minimum requirements --assured power supply, road connectivity and availability of water -- to ensure that enterprises could function effectively.

The clusters are expected to energise large segments of the semi-urban and rural areas of the country to boost their economic potential and provide jobs in such areas.

The cluster approach has been supported by the power ministry, which had mooted a proposal for funding power projects in areas that could be connected to the national grid.

The World Bank has also expressed its keenness to fund such a project. Narayan said the clusters would need to have a minimum population of 20,000 and a maximum population of 100,000. The Centre and the state governments will provide the financial support for setting up these clusters.

Speaking about the possibility of developing the National Capital Region and the Mumbai-Pune belt as economic clusters, Narayan said it had to be a public-private partnership model.

He said even though infrastructure had to be built by the government, it was imperative that it did not revive the all-encompassing plan models of the first few Five-Year Plans.

The CEO of IDFC, Nasser Munjee, said the current rate of GDP growth of Mumbai was less than 3 per cent, which was below Maharashtra's NSDP.