Kejriwal’s Ban on Manufacturing Units in New Industrial Areas to Hit Small Industries and Workers in Delhi

Delhi Chief Minister Arvind Kejriwal on Monday announced that the state government will no longer allow manufacturing industries in new industrial areas and will only accommodate service-based and hi-tech industrial units. The decision, which is meant to curb pollution, is likely to hit the small scale industries and their workers.

The announcement came after the Union Ministry of Housing and Urban Affairs gave its nod to a long-pending proposal of changing the definition of ‘Industry’ under the Delhi Master Plan 2021.

As per the announcement, the industrial areas can host professionals like doctors, lawyers, chartered accountants along with the multinational companies, information technology conglomerates and media production houses; the government will provide concessions in tax and land rates. Existing manufacturing facilities will be given the option for transition to services. The decision will keep polluting industrial units at bay from the national capital. The questions that arise are if the proposed measure can help curb pollution and what it means for the working population of the capital.

R N Gupta, Former President of Naraina Industrial Association, told NewsClick that decision for the transition of manufacturing units to services may not go as smooth as planned. He said, “We have really not been in a good position since last six months after the nationwide lockdown. We are still recovering.” The industries in Narela and Okhla have reportedly been struggling since the lockdown with a shortage in labour and low demand and asked the Delhi government for help, such as electricity bill waiver, to help them sail through the hard time.

Explaining that the imposed shifting would be a herculean task for the smaller industries in Delhi, Gupta said, “Proposing transition to services means some people would need investment, technology and manpower. Now, one must remember that Delhi mostly houses small scale industries and the big industries have shifted to the neighbouring states. These small scale industries may not have the expertise to do the transition at all.”

Expressing concern over the precarious future of the thousands of workers and self-employed people involved with the existing industries, he asked, “What you are going to do with these people?”

The proposed policies have the politics of the Aam Aadmi Party at its core, according to Avinash Kumar, Assistant Professor at Centre for Informal Sector and Labour Studies at Jawaharlal Nehru University. Speaking to NewsClick, he said, “The Aam Aadmi Party sees itself as an urban-based party where more focus is certainly on more beautification and urbanization. However, if we look at the history of Delhi, it is certainly not the nature of the city which can be imagined without factories.” At first, Okhla Industrial Area was developed in Delhi and then, the New Okhla Industrial Development Authority, commonly known as Noida, came up. Now, there is greater Noida as well.

“Delhi was imagined as Delhi National Capital Region and it involved all major cities in the region. AAP knows it very well that its demand for statehood is not going to be realised till the Bharatiya Janata Party is in power at the Centre. So, it is now seeing adjoining cities as its competitors and acting accordingly,” Kumar said.

However, the policy that has been created with this competitive mentality has two basic issues, he said. “Firstly, offices and technology parks can generate only limited employment opportunities. It is precisely the factories which cater to migrant labourers from the agricultural workers families. Secondly, the native capital no longer will be served--if a small businessman was running a factory, he was somehow availing the incentives and concessions from the government. Now, multinationals will get these incentives.”

Kumar claims that the move to shift manufacturing industries would not be able to tackle pollution but would impact workers. “Broadly, I see this as an extension of neoliberal design where one aims to maximise profits without any commitment to labour. If there is pollution, find an answer to it. Shifting factories to neighbouring states would not do much help,” he said.

The Delhi government’s new policy will hit the already struggling migrant workers hard. The production units in Delhi currently employs an estimated 10 lakh workers, according to Sidheshwar Shukla, Secretary, Centre for Indian Trade Unions (CITU) Delhi Unit. He said, “Factories need different skill sets and offices. If the transition proposed by the Delhi government takes places, who will employ the displaced workers? The workers have seen their worst in the pandemic and the subsequent lockdowns. They are selling jewellery and homes to pay their debt because they have not been paid by employers for sometimes six months.”

Shukla expressed doubt over the policy’s effectiveness to curb pollution. “As far as the polluting industrial units are concerned, I think there are only two industrial areas which fall in the ambit of the Ring Road and the main city. Many units are located at the outskirts of the city. Now, even when you want them to shift to Panipat or Sonipat, what is the guarantee that their pollution will not reach Delhi?” he asked. He suggested that if the government was really interested in curbing pollution, it should have directed the middle class to use cars less and shift to public transport. “But nobody will say it,” he rued.

While the national capital tries to attract IT companies to set up shop in the industrial areas, the migration of such companies from one city to another would depend on the incentives that Delhi government would provide, according to Bappa Sinha, an independent information technology consultant. He said, “The IT industry basically needs cheap real estate and talent pool of professionals to operate. Presently, the real estate is so expensive in Delhi that industries considered it wise to shift to Gurgaon, Faridabad and Noida. Now, these cities have an existing base of industries and if they will migrate at all is too early to say.”