Chandigarh’s poor show in ease of doing business rankings no surprise: Industrialists
In the last five years, the number of MSMEs (micro, small and medium enterprises) decreased by nearly 35% and industrial workforce shrank by around 20%Updated: Sep 13, 2020, 22:48 IST
For the industry insiders, Chandigarh’s poor show in the Ease of Doing Business (EODB) rankings last week has come as no surprise. The parameters on which the city failed to score high are good indicators of tardy industrial and business growth in the city, they say.
The city’s industrial base had already been contracting before the Covid-19 pandemic hit hard. “In the last five years, the number of MSMEs (micro, small and medium enterprises) decreased by nearly 35% and industrial workforce shrank by around 20%. Nearly, 40% space in the twin Industrial Areas remains vacant,” says Naveen Manglani, president, Chambers of Chandigarh Industry.
The IT industry, which saw quick growth after the Rajiv Gandhi IT Park was set up in 2005, is also facing similar challenges in growth and expansion.
“Chandigarh in the past had taken the lead in the IT industry in the tricity. We worked hard to propel the city on the technology map of India. By 2010, 25,000 jobs were created but now it has plateaued out. There is no additional land available for expansion,” says Vivek Atray, former director, IT, UT administration.
With the Industrial Area concentrated in a small area of 150 acres, land availability remains a major problem. “The demand for affordable conversion of leasehold property to freehold property is pending for more than a few decades,” says Pankaj Khanna, president, Industries Association of Chandigarh.
High collector rates (minimum value of sale or transfer set by local development authorities) of industrial plots are a hurdle to growth too as Mohali and Panchkula offer much cheaper land rates.
“Effectively, the FAR (floor area ratio – ratio of a building’s total floor area to the area of the land on which it is built) in the city’s industrial area is 0.75. In Mohali, it nearly three times higher,” says Manglani.
The inspector raj too is still prevalent, industrialists complain, asking for lower misuse and violation charges.
SINGLE WINDOW SYSTEM
Another factor for the city’s poor industrial growth is lack of an online single window system.
Highlighting the problem, the EODB 2019 report states: There is no “online single window system with functionality for online application submission, payment and approvals system.”
Anyone setting up a business here cannot expect a one-time response to all queries/clarifications related to applications, reads the report.
Services like labour, water, electricity, etc are also unavailable through a single window.
ACCESS TO INFORMATION
“For smaller businesses and entrepreneurs trying to set up their units, access to information from one single source is required. This enables quick and easily accessible information on all approvals and other requirements needed,” says Munish Jauhar, founder CEO of GrayCell Technologies and former president of TiE, Chandigarh.
Commenting on the matter, Harjit Singh Sandhu, director, Industries, says, “Most of the UT departments, including the municipal corporation, estate office, etc have either already made many of the services available online or are in the process of doing it. This will improve the city’s EODB rankings.”
Referring specifically to the industry, Sandhu, adds, “Paucity of land for starting new projects is a big impediment to industrial growth and expansion in the city.”