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Why Kejriwal’s Plan to Allow Hi-tech Industry is Good for DelhiNew Delhi: With Delhi Chief Minister Arvind Kejriwal announcing that the newindustrial areas in the city will have no place for manufacturing activitiesto curb pollution, industry experts have welcomed the initiative, saying thatit will be good not just for city but also for the manufacturing sectoritself. Also Read – ‘Govt in Delhi Now Means Lt Governor’: Delhi NCT Act ComesInto Force, Says Home MinistryKejriwal made the announcement in a virtual conference last week. Also Read -Delhi Govt Withdraws Order Reserving 100 Rooms at Ashoka Hotel for HC Judges,Judicial OfficersHe said that only hi-tech and service industries will be permitted to open inthe new industrial areas as part of the plan to reduce pollution. Also Read -Never Asked For 100-Bed Facility At Five-Star Hotel For Judges, Says DelhiHigh CourtWhile the Delhi CM said that the move makes sense because the city’s economyis driven mainly by the service sector, industry experts have said that thenature of manufacturing has changed in India and the city is no longersuitable for these types of manufacturing units.“The typical industry size in Delhi is cottage and SME size industry. Thephysical and psychological comfort of producing in a metropolitan like Delhiis one of the reasons that industry is stymied in our country andentrepreneurs choose comfort to scale,” Pankaj Mohindroo, Chairman, IndiaCellular & Electronics Association (ICEA), told IANS.“The decision of move manufacturing out of Delhi in favour of services is asound initiative prima facie. We should develop Delhi into hi tech areas ofdesign and R&D and Singapore is an excellent model,” he said.Delhi currently has 29 approved industrial areas and four flatted factorycomplexes, according to Invest India, a non-profit venture under theDepartment for Promotion of Industry and Internal Trade, Union Ministry ofCommerce and Industry.Major industrial areas in Delhi include the Naraina Industrial Area which wasset up by the Delhi Development Authority (DDA) in 1970.The industrial area houses units which manufacture electronic and electricalgoods, engineering goods, plastic goods, ready-made garments, sanitaryfittings, etc.Similarly, the Okhla industrial area, located in the southern part of thecity, is a hub of major industrial activities. Many export houses are locatedin the area.Kejriwal said in the virtual conference that the move to focus on the servicessector and hi-tech industry will lead to reduction in real estate prices inthe city for opening new offices.He said that apart from keeping the city clean, the initiative will helpentities such as IT companies, media houses, law firms, internet serviceproviders, call centres and advertising agencies have their offices in thecity itself, instead of moving out to Gurugram and Noida to cut costs.According to George Paul, CEO, of Manufacturers’ Association of InformationTechnology (MAIT), the Delhi government’s move to not allow manufacturing innew industrial areas will not have much impact on the electronic manufacturingsector as most of the new industrial units are being set in areas such asNoida and Greater Noida.“Manufacturing is a very competitive domain. You have to keep your cost low.In Delhi, the cost of real estate is very high. That is the reason why most ofmanufacturing units are coming up in the National Capital Region in India. TheNCR area offers cheaper real estate,” he said.“It is much more cost-effective to set up manufacturing units in the NCRregion because of availability of lands. And the plants that are coming up noware big plants. The nature of electronics manufacturing in India is alsochanging. That requires more space,” he said.Overall, keeping manufacturing out of the new industrial areas will bebeneficial for the city, even though the electronics industry per se does notcontribute much to pollution compared to other sectors.However, convincing existing manufacturers to make a shift in their locationor business could be a huge challenge for the government if it eventuallydecides to completely disincentivise manufacturing in the city.“There should be a structured resettlement process which can work as a greatopportunity to scale up industry,” Mohindroo said.