The reason why NCR is an essential component of the Indian economy is due to its contribution towards India’s GDP.

 

Delhi being the national capital, the emphasis is on encouraging modern, high-tech, sophisticated, export-oriented, non-pollutant small scale industries in Delhi. The National Capital Region (NCR) is promptly visible as a global economic hub and is now one of the rapidly expanding economic regions in India. The reason why NCR is an essential component of the Indian economy is due to its contribution towards India’s GDP.

 

Industry Scenario in Delhi

According to the Fifth Economic Census led in 2005, Delhi was positioned 16th in all India ranking (based on the results of only 35 States and Union Territories) regarding the number of establishments, contributing about 1.80 per cent of the total establisments in India. The total number of establishments observed to work during 2005 in the land limits of National Capital Territory of Delhi was 757,743. Of this, 41 per cent contributed to own account ventures and the rest of the 59 per cent were establishments. The major monetary activity group of retail trade with 48.9 per cent of share in total establishments positioned first, followed by manufacturing (including repair) and community, social, personal administrations and others' exercises with 18.19 per cent and 9.99 per cent shared respectively. Delhi was positioned 12th in national ranking in business, contributing 3.61 per cent of the total employment of India. The number of employees working in the establishments was 3,556,387 (refer to table).

 

New Industrial Policy 2010-2021

Industry department has formulated an industrial policy for Delhi 2010-2021, that plans for the devolvement of high-tech, knowledge-based, service sector and IT industries in Delhi. The vision is to make Delhi a hub of clean, high-technology and skilled economic activities by 2021 through policy changes.

The objectives of the policies are to:

 

 

The industrial policy adopts strategies such as infrastructure development through better O&M of mechanical resources, bolster expertise improvement and other promotional measures such as permitting information based ventures in industrial zones, decongesting them through redevelopment process and discouraging polluting industries through higher infrastructure improvement expense.

 

Why NCR?

As Delhi is the seat of the Central Government, it has an important position in the country in terms of formulation of policies. It has also become an important centre of trade and commerce, as a number of key industry associations operate in the state. A range of fiscal and policy incentives are proposed under the Industrial Policy for Delhi. Delhi has a well-developed social, physical and industrial infrastructure.

 

In terms of physical infrastructure, the government has undertaken highway projects worth Rs 34,000 crore ($5.29 billion) to decongest the national capital. The Board of National Capital Region Transport Corporation has invested $3.34 billion in the Rapid Rail Transit Corridor (RRTC), which will operate between Delhi, Ghaziabad and Meerut, making it a 92-km long corridor.

 

For strengthening the airways network, the government is planning to build a second airport in the NCR region in Jewar in four phases, to be operational in the next five to six years. When asked about the advantages of having a manufacturing unit in the NCR, VK Mittal, Managing Director, Cenlub Industries said, “We have our own manufacturing unit at sector 58, Faridabad. The advantage in NCR is that you have an airport nearby, and secondly the dry ports are in Delhi. We face a lot of convenience in this region for export and import.”

Instamod Airpipe currently do not have a manufacturing unit in the NCR region. But when asked what advantages the Delhi-NCR region will have to offer if they ever set up a manufacturing unit there, Santosh Kumar, Managing Director, Instamod Air Pipe said, “Most of the corporate offices of the big companies are in NCR, especially the automotive industry. If we have anything in the NCR region, it will be possible for us to give the companies a good service. There are dry ports present and the road infrastructure has really gone up.”

On the industrial infrastructure front, the state has adopted certain development initiatives such as remodelling of industrial clusters and maintenance of industrial areas under the public-private partnership (PPP) model. 

 

Countronics, which specialises in manufacturing electronic control instruments for industries, has a manufacturing unit in Ghaziabad. Dinesh Gupta, CEO, Countronics said, “The first advantage of operating from where we function, is the proximity to Delhi. Also, after the introduction of GST, it does not matter where you operate from. For people who are organised, the GST has been a big boom. In my area, we also recently got connected by NH-24, and reasonably good electricity, because in recent times, Uttar Pradesh has improved considerably in terms of electricity. The power cuts and breakdowns do not take place anymore.”

 

The state government has started a set of ambitious projects, including those in industrial infrastructure for specific sectors, through the Delhi State Industrial and Infrastructure Development Corporation (DSIIDC). The Delhi-Mumbai Industrial Corridor Development Corporation has decided on a policy to allocate land developed by it at four different locations on the proposed 1,504-km corridor, which will help industries to get hold of the land for setting up units. The Centre has already invested $1.07 billion in developing the projects. 

According to the Delhi 2021 Master Plan, the state will be highlighted as a centre of clean, high-technology and skilled economic activities. Initiatives will be taken for the modernisation of existing and inclusion of new industries such as those related to information technology (IT) and IT enabled services (ITeS). The plan places focus on industrial development without effluents, smoke and noise pollution. There are 14 operational Special Economic Zones in the NCR and two formally-approved SEZs in Delhi.

 

Apart from all this, the Delhi Government has set up a Business Facilitation Council (BFC) to facilitate single-window clearances from various departments for establishing industrial enterprises in a time-bound manner. The major objective of the BFC is to facilitate entrepreneurs in obtaining clearances from various departments or agencies in a time bound and efficient manner for setting up industrial enterprises.

 

The development of clusters in NCR

Besides providing a range of economic advantage and employment opportunities for the rural and urban sector in the NCR, there has also been rapid expansion of specialised industrial clusters in the region. Over the last three decades, there has been a visible rise in the industrial activities within the NCR, specifically sub-regions of Haryana, Uttar Pradesh, and Rajasthan.

 

The NCR hosts large, medium and small enterprises, formal and informal alike. It is essential to take into account the impetus with which the NCR clusters were planned. To improve the competitive advantage of these industries, governments and businesses have revised their policy stance from a sectoral approach towards a cluster-based approach. 

 

Out of the 600 industrial clusters existing in India, the NCR itself consists 60 of them. These clusters are becoming more and more prominent as they are the potential drivers for enterprise development. Cluster strategy permits public agencies to direct resources uninterruptedly. Rather than structuring numerous programmes to take into account the requirements of individual firms, the public effort is directed towards addressing the necessities of various firms with homogeneous issues. The cluster approach allows public agencies to directly work with industries and create business methodologies for building a sustainable economy.

 

What the SMEs can gain?

Institutions like the Delhi Khadi & Village Industries Board (DKVIB), Delhi State Industrial Development Corporation (DSIDC) and Delhi Financial Corporation (DFC) help to encourage the small scale industries in Delhi. HSIIDC (Haryana State Industrial Infrastructure Development Corporation) supports industrial, financial and infrastructural activities in Haryana. 

 

Since Haryana has the maximum number of districts, the Haryana government policies impact the development of NCR the most. The state government has shortlisted the following focus points in which investment will get a priority: a) automotive, light engineering and auto components industry in Gurugram, b) textiles, apparel, knitting and embroidery, c) agriculture, food processing and allied industry in Karnal and Panipat districts, d) electronics and IT/ITeS and e) footwear and accessories.

 

The proposed projects in Meerut-Muzaffarnagar industrial area like SEZs, food processing zones, integrated townships, etc. and in Dadra-Noida-Ghaziabad Investment region like free trade warehousing zones, implementation of a power plant, knowledge hubs, integrated townships, biotech hub and others will bolster industrial development.

 

Roadblocks

But despite these benefits, there are challenges too that need to be addressed. Outdated technological support still hold back most small and medium-sized enterprises (SME). Primitive production methods limit their capacity for growth and make them unable to tap new markets.

 

There is also a dearth of affordable skilled abour. Even though SMEs have owners who possess the necessary knowledge of the field, they are not necessarily aware of financial matters. Therefore, access to credit is probably the biggest obstacle that stands in their way. Tedious loan procedures, huge paperwork, long disbursal periods, collateral requirement and high interest rates are some of the factors that make banks a difficult option for MSME (micro, small and medium enterprises) loans in India.

 

The ways to tackle

In one way or the other, the 60 industrial clusters within the NCR are emerging as focus sectors despite the various hurdles. The service sector, primarily IT and ITeS, has been conducive towards the development of the Haryana sub-region. 

Some districts such as Gurugram and Faridabad have played a significant role in this shift. The government has also adopted the initiative to encourage greenfield activities in the Research and Development (R&D) of the automobile sector. Panipat houses some textile industries, handloom and power loom alike. The existing MSMEs have to be brought under an organised as well as a competitive environment.

 

In Uttar Pradesh, the government bodies are pushing more for the development of several manufacturing facilities all across the sub-region. The district can be promoted in the areas of nanotechnology, biotechnology, and information technology by further encouraging investment in R&D. There is a lack of a sustenance system for MSMEs and the informal sector. Due to this, cluster development programmes have to be executed in order to meet the technological and productivity needs as per the Industrial Policy of Delhi.

 

"Most of the corporate offices of the big companies are in NCR, especially the automotive industry. If we have anything in the NCR region, it will be possible for us to give the companies a good service. There are dry ports present and the road infrastructure has really gone up."

Santosh Kumar, Managing Director, Instamod Air Pipe 

 

"We have our own manufacturing unit at sector 58, Faridabad. The advantage in NCR is that you have an airport nearby, and secondly the dry ports are in Delhi. We face a lot of convenience in this region for export and import."

VK Mittal, Managing Director, Cenlub Industries

 

"The first advantage of operating from where we function, is the proximity to Delhi. In my area, we also recently got connected by NH-24, and reasonably good electricity, because in recent times, Uttar Pradesh has improved considerably in terms of electricity."

Dinesh Gupta, CEO, Countronics 

 

 

Registered factories and estimated workers employed

 

Yeras	Factories	Estimated Workers Employed
2007	7,793	359,126
2008	7,921	364.053
2009	7,997	367,611
2010	8109	373,500