“We have earmarked a 1.5 acre land parcel as commercial property right next to the housing complex,” K. Senthil Raj, managing director of the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) told ET. “We will allot it through the SIPCOT online portal soon for interested private players to construct a shopping complex and operate it for the benefit of the workers living there. There is also an additional 2.5 acres available that we’re leaving open for future expansion.”
Raj added that the shopping complex along with several other initiatives like a huge park, an open gym, amphitheatre, yoga space, walker’s pathway, ‘healing garden,’ as well as amenities like sports facilities and reading rooms are being constructed at or near the Tamil Nadu government’s housing initiative for 18,720 women employed by Taiwanese tech giant Foxconn, a key supplier to iPhone-maker Apple, at Vallam Vadagal near Chennai.
Social infrastructure includes schools, universities, hospitals, community housing, sports facilities, parks, places for leisure and entertainment as well as government services and offices. In countries like China and Taiwan, the backbone of their unprecedented growth in the electronics manufacturing services (EMS) segment has been the solid social infrastructure that they created around these factories.
“For India to scale further in the EMS segment, a lot will hinge on the social infrastructure that we build,” Ministry of Electronics and Information Technology secretary, S Krishnan had told ET last month. “We have seen some states step up to provide large industrial housing initiatives but we need to also look at developing allied services and facilities.
Taking a leaf out of Tamil Nadu’s playbook, other states like Telangana and Gujarat are also looking at ways to develop townships around their large industrial facilities as investments pour in for the electronics and semiconductor ecosystem. In Telangana, for instance, the government is going with an approach that depends on the location as these kinds of facilities are required when people have to go to remote areas.
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“In Kakatiya Mega Textile Park in Warangal, we already allowed for dormitories to be set up,” one person aware of the developments said. “And generally for large parks, what we are doing is helping with the land acquisition process and also subsidies but also promoting every large industrial park to have its housing on-site so that a township of sorts develops around it.”This person added that Foxconn too was constructing dormitories for its employees at its new facility near Hyderabad. Email queries sent to Foxconn regarding the same remained unanswered as of press time Sunday.
In Gujarat too, the township model is one the state is pursuing aggressively. One person aware of the developments in the state said that the semiconductor industry and the entire ecosystem surrounding that is coming up in Sanand GIDC (Gujarat Industrial Development Corporation), which is about 35 to 40 kilometres away from Ahmedabad.
“Even abroad, the industrial areas are all on the outskirts of the large cities and they have their own townships that develop around them, making them industrial towns,” this person said. “The essential idea is that there should be social infrastructure within a radius of about eight to 10 kilometres from the big cities so that the workers there should have all the comforts and amenities closeby.”
He said that there are already about 6-7 good schools in that periphery and that there were more than 10,000 houses which were being constructed within a radius of 15-20 km.
“The government need not do everything,” he explained. “The government is a facilitator. The government should make those facilities available to workers and senior executives through private players. That is what will serve the purpose. We are seeing all sorts of housing facilities coming up to cater to all levels of employees and the government is offering lucrative incentives and encouraging people to develop dormitories for industrial workers in the state for these large projects.”
Tamil Nadu’s industrial housing project was inaugurated in August and marked the first time an Indian state government constructed a hostel of this scale for a private firm — a model that’s been successful in China and Vietnam.
Now, as part of their work to provide workers with access to other facilities, the state is looking at a ‘township’ model that will provide these employees with access to a plethora of other amenities.
While states are going full throttle to offer these large companies with land, experts said that even though this was an essential starting point, there was a lot more that needed to be done. Dhruv Shekhar, senior associate at Koan Advisory in November, told ET that state governments could look at offering tax breaks or subsidies for companies investing in housing, healthcare, and educational facilities around their manufacturing hubs.
“They should also collaborate with urban planners to design worker-centric townships could make such investments more attractive to corporations,” he said. “And finally, PPP models could help build affordable housing and basic amenities, sharing the responsibility between the state and corporate investors.”
