CHAPTER 9
INDUSTRIAL DEVELOPMENT
1. About 24.63 per cent of the workers in Delhi (7.31 lakh workers) were employed in the manufacturing sector as per 1991 census while at the national level the percentage was only 10%. Various rounds of the NSSO survey also indicate that about 25% of the workers in Delhi were engaged in the manufacturing sector between 1977-78 and 1991-92. Present estimates indicate that Delhi has more than 1.37 lakh industrial units which provide employment to more than 11 lakh persons. The estimated investment and production in these units is around Rs. 2,524 crore and Rs. 6,310 crore, respectively. The manufacturing sector in Delhi contributes about 7-8% to the state income.
2. A door-to-door industrial survey conducted in Delhi in 1988 found that an average unit employs 9 workers while 30% of the units employ 4 workers or less. The survey revealed that textiles products (garments) units constitute the largest number, followed by electrical machinery and repair services (Table 9.1).
Industrial Growth
3. Delhi has gone through a rapid process of urbanization. The Master Plan for Delhi rules out setting up large and heavy industries. There is, however, scope to expand small-scale industries. The availability of infrastructure, wholesale markets, trade and other commercial services have promoted the expansion of small-scale industries in Delhi.
Overall Growth
4. There has been tremendous growth in the number of small-scale industries (SSI) in Delhi since 1951, and it has emerged as one of the biggest centres of small-scale industries in the country as indicated below:-
Statement 9.1
GROWTH OF INDUSTRIAL SECTOR, 1951-91
Year	Number of Industrial units	Investment(Rs. crore)	Production(Rs. crore)	Employment    (numbers)*
1951	8,160	18.13	35.35	95,137
1961	17,000	60.00	121.00	1,87,034
1971	26,000	190.00	388.00	2,91,585
1981	42,000	700.00	1,700.00	5,68,910
1991	85,050	1,659.00	4,462.00	7,30,951
Source: Estimated by the Dte. of Industries, Government of NCT of Delhi.
* Census Data
5. According to the 1996 survey conducted by Delhi Pollution Control Committee (DPCC), about 1.37 lakh industrial units were operating in Delhi in 1996. Of these, about 25,000 industrial units are located in 28 industrial areas/estates and the remaining units are located in residential and non-conforming areas. There are relatively few medium and large industries compared to the total number of units.
6. The index of industrial production (1980-81 base year) for Delhi shows an increasing trend until 1995-96. It has declined from 1996-97 onwards because major industrial units were closed by an order of the Supreme Court. The average index of industrial production, which was 217.72 in 1994-95, increased to 235.90 in 1995-96 registering a growth of 8.35 per cent. However, it declined to 205.14 in 1996-97 and 196.00 in 1997-98. The index recovered to 205.68 in 1998-99. At the national level, the index of industrial production (1993-94 base year) increased from 129.10 in 1996-97 to 137.60 in 1997-98 with a growth rate of 6.58 per cent. Index of Industrial production in Delhi is given below :-

Statement 9.2
INDEX OF INDUSTRIAL PRODUCTION IN DELHI
Year	Index	% over previous year
1980-81	100.00
1981-82	109.12	9.12
1982-83	119.97	9.94
1983-84	125.53	4.63
1984-85	131.64	4.87
1985-86	132.89	0.95
1986-87	142.39	7.15
1987-88	154.23	8.31
1988-89	162.43	5.23
1989-90	173.82	7.01
1990-91	189.03	8.75
1991-92	187.83	(-) 0.63
1992-93	192.57	2.52
1993-94	197.91	2.77
1994-95	217.72	10.01
1995-96	235.90	8.35
1996-97	205.14	(-) 13.04
1997-98	196.00	(-) 4.46
1998-99	205.68	4.94
Source: Directorate of Economics & Statistics, Government of NCT of Delhi

Source : Labour Department, Government of NCT of Delhi.

Industrial Policy

8. The Delhi Government issued an industrial policy statement in 1982. The policy statement emphasised the promotion of sophisticated industries that can achieve optimum levels of production using less space and power while generating employment avenues for skilled persons. In order to clean up the environment, emphasis was placed on encouraging non-polluting and non-hazardous units in Delhi. Household industries were permitted and 67 industries identified that could be run in residential houses with a maximum power load of 1 kilowatt, provided that the industry did not cause pollution or congestion and could be operated within a space of 30 square meters. A new industrial policy is under finalisation at present.

Industrial Estates

9. Delhi has 28 industrial estates at present. Government has acquired 1,000 acres of land at Bawana village and Holambi Kalan and it is proposed to acquire another 800 acres land to develop new industrial estates in an effort to relocate industries currently operating in non-conforming areas. About 16000 units are proposed to be re-located. In addition, 102 acres of land are available with the Delhi Government in various developed industrial estates. 5,800 flatted factories are proposed to be constructed at these locations. 400 flatted factories have been constructed at Jhilmil Tahirpur and 321 flatted factories allotted in June 1999.

DELHI FINANCIAL CORPORATION

10. The Delhi Financial Corporation (DFC) caters to the financial needs of industries located in the National Capital Territory of Delhi and the Union Territory of Chandigarh. Financial assistance is available to the industrial service sector, medical & health care/diagnostic centres, transport sector, hotels and restaurants, etc., for the acquisition of fixed assets such as land, building, plant and machinery, etc. DFC has an authorized capital of Rs.20 crore and share capital of Rs.15.53 crore. The DFC sanctioned loans worth Rs. 60.41 crore during 1996-97 to 906 persons, Rs. 20.21 crore during 1997-98 to 271 persons and Rs. 36.49 crore during 1998-99 to 1982 persons.

DELHI STATE INDUSTRIAL DEVELOPMENT CORPORATION

11. DSIDC which was set up in 1971 assists, finances and promotes the interests of small-scale industries in the NCT of Delhi. It has an authorized capital of Rs. 30 crore and paid up capital of Rs. 21.86 crore. DSIDC is implementing the industry re-location project and is also constructing common effluent treatment plants.

DELHI KHADI & VILLAGE INDUSTRIES BOARD

12. The Delhi Khadi and Village Industries Board implements two schemes: (i) Consortium of Bank Credit Scheme and (ii) Block Loan Scheme. The Board sanctioned loans of Rs.2.71 crore to 58 units in 1997-98 and loans of Rs.5 crore to 113 units in 1998-99.

SOFTWARE INDUSTRY

13. The growth of the software industry in Delhi has been relatively slow compared to Bangalore and Mumbai even though it has tremendous potential. Projections by NASSCOM (1998) indicate that with a co-ordinated action plan by the government and industry, the software industry in Delhi can grow at an accelerated pace to achieve an annual turnover of Rs. 45,000 crore (US$ 10 billion) by the year 2007-08 which could be as much as 12% of the projected turnover (US$ 85 billion) of the Indian software and services industry.

Software exports from Delhi, which were Rs. 55 crore in 1995-96, increased to Rs. 150 crore in 1997-98, which is 2.3% of the total software exports of Rs. 6,530 crore from the country. However, the cumulative software exports from Delhi, Noida and Gurgaon were around Rs. 1,040 crore, i.e., almost 15% of India’s software exports in 1997-98. According to NASSCOM Delhi’s software export potential could be Rs. 20,000 crore by 2007-08, which is 10% of India’s projected exports by 2007-08.

The domestic software market in Delhi during 1997-98 was estimated to be Rs. 860 crore accounting for almost 22% of the domestic software market in India.

NASSCOM has also estimated that Delhi can easily provide jobs to 1 lakh people in the next three years and about 3 lakhs in the next 10 years in the area of IT enabling services.