+
Govt. Targets Economic Growth in Tier 2 & 3 Cities
ECONOMY & POLICY

Govt. Targets Economic Growth in Tier 2 & 3 Cities

The Commerce Ministry has directed all states and Union Territories (UTs) to develop a "City Level Economic Vision for 100 Tier 2 and 3 Cities" by June 2026. This initiative aims to foster manufacturing hubs in 1,039 out of 7,935 towns across India, extending beyond traditional Tier 1 industrial cities.

The plan, outlined by the Department of Promotion of Industry and Internal Trade (DPIIT), was discussed during the Fourth National Conference of Chief Secretaries in December 2024. The goal is to substantially increase the manufacturing sector's contribution to India’s Gross Value Added (GVA) from its current share of 17%.

Strategic Shift to Tier 2 and 3 Cities

Manufacturing in Tier 2 and 3 cities is seen as crucial to India's economic development. The government aims to tackle infrastructure issues, improve land availability, enhance logistics, develop workforce skills, and reduce the compliance burden on businesses to establish a thriving manufacturing ecosystem.

The initiative will focus on capital-efficient and labor-intensive industries in states with low Gross State Domestic Product (GSDP), while states with higher GSDP and established manufacturing bases will prioritize R&D and high-tech industries. This regional approach ensures that states can leverage their unique strengths and address specific challenges.

Key Timelines and Enablers for Growth

The government has earmarked specific timelines and key enablers to support these reforms. By June 2026, states are expected to implement State Logistics Action Plans based on the LEADS (Logistics Ease Across Different States) assessment. Additionally, states are urged to streamline business processes by decriminalizing certain state laws and improving single-window systems by December 2025.

In terms of industrial infrastructure, the Ministry has set a target to develop 100 "plug and play" industrial parks with flexible land lease policies by December 2025. States are also expected to integrate the PM Gati Shakti National Master Plan for large-scale industrial projects and upgrade the infrastructure of 1,000 Industrial Training Institutes (ITIs) to support skills development.

Boosting Employment through Manufacturing

By shifting manufacturing focus to Tier 2 and 3 cities, the government aims to increase the share of manufacturing in employment from the current 12% to 22% by 2047. The strategy is seen as a crucial step to create a more balanced economic ecosystem that drives employment growth and boosts industrial output across the country.

The Commerce Ministry has directed all states and Union Territories (UTs) to develop a City Level Economic Vision for 100 Tier 2 and 3 Cities by June 2026. This initiative aims to foster manufacturing hubs in 1,039 out of 7,935 towns across India, extending beyond traditional Tier 1 industrial cities. The plan, outlined by the Department of Promotion of Industry and Internal Trade (DPIIT), was discussed during the Fourth National Conference of Chief Secretaries in December 2024. The goal is to substantially increase the manufacturing sector's contribution to India’s Gross Value Added (GVA) from its current share of 17%. Strategic Shift to Tier 2 and 3 Cities Manufacturing in Tier 2 and 3 cities is seen as crucial to India's economic development. The government aims to tackle infrastructure issues, improve land availability, enhance logistics, develop workforce skills, and reduce the compliance burden on businesses to establish a thriving manufacturing ecosystem. The initiative will focus on capital-efficient and labor-intensive industries in states with low Gross State Domestic Product (GSDP), while states with higher GSDP and established manufacturing bases will prioritize R&D and high-tech industries. This regional approach ensures that states can leverage their unique strengths and address specific challenges. Key Timelines and Enablers for Growth The government has earmarked specific timelines and key enablers to support these reforms. By June 2026, states are expected to implement State Logistics Action Plans based on the LEADS (Logistics Ease Across Different States) assessment. Additionally, states are urged to streamline business processes by decriminalizing certain state laws and improving single-window systems by December 2025. In terms of industrial infrastructure, the Ministry has set a target to develop 100 plug and play industrial parks with flexible land lease policies by December 2025. States are also expected to integrate the PM Gati Shakti National Master Plan for large-scale industrial projects and upgrade the infrastructure of 1,000 Industrial Training Institutes (ITIs) to support skills development. Boosting Employment through Manufacturing By shifting manufacturing focus to Tier 2 and 3 cities, the government aims to increase the share of manufacturing in employment from the current 12% to 22% by 2047. The strategy is seen as a crucial step to create a more balanced economic ecosystem that drives employment growth and boosts industrial output across the country.

Next Story
Infrastructure Energy

BMW Industries partners with IOCL for PNG supply at Bokaro plant

BMW Industries has entered into a strategic partnership with Indian Oil Corporation (IOCL) for the supply of Piped Natural Gas (PNG), reinforcing its commitment to adopting cleaner and more efficient energy sources for its operations.The agreement was signed at the Eastern Region Pipelines (ERPL) headquarters in Kolkata. The partnership is expected to support the company’s upcoming manufacturing facility in Bokaro by facilitating the use of natural gas as a primary energy source.According to the company, the adoption of PNG will help enhance operational efficiency while also contributing to ..

Next Story
Real Estate

Bombay Realty Secures RERA for Three ICC Tower in South Mumbai

Bombay Realty, the real estate arm of Bombay Dyeing and part of the Wadia Group, has received Real Estate Regulatory Authority (RERA) certification for Three ICC – Wing A, the latest luxury residential tower at Island City Center in Mumbai’s Dadar.The RERA registration marks a key milestone in the development timeline and reinforces the company’s focus on regulatory transparency, timely project delivery, and high construction standards.Following the success of One ICC and Two ICC, the upcoming Three ICC tower represents the next phase of the Island City Center development. The project ai..

Next Story
Infrastructure Energy

Flender launches India’s largest wind gearbox test rig in Walajabad

Flender has inaugurated a 13.5 MW wind turbine gearbox test rig at its Walajabad facility near Chennai, marking the largest installation of its kind in India. The new facility is expected to strengthen the company’s manufacturing and testing capabilities while supporting the growing demands of the wind power sector in both domestic and global markets.The test rig was inaugurated on March 5 in the presence of Andreas Evertz, Group CEO, Flender; Lars Wiegemann, Vice President Wind Gears, Flender; and Vinod Shetty, CEO, Flender India, along with key industry customers and stakeholders.The insta..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement