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Industrial Development & Economic Growth in Delhi

January, 2017

Delhi is one of the fastest growing states of the country. At current prices, the gross state domestic product (GSDP) of Delhi was US$ 96.5 billion in 2016-17. Between 2011-12 and 2016-17, the GSDP of the state grew at a compound annual growth rate (CAGR) of 7.28 per cent. Growth was driven by the expansion of the services sector. Banking and insurance, real estate, trade, tourism and communications were driving the progress in the sector.

In 2016-17, the state’s per capita GSDP was US$ 5,175. Between 2011-12 and 2016-17, per capita GSDP grew at a CAGR of 5.57 per cent. Per capita NSDP was US$ 4,703.91. Between 2011-12 and 2016-17, per capita NSDP grew at a CAGR of 6.73 per cent.

The location advantage, policy incentives and infrastructure in the state support investments in sectors such as IT/ITeS, banking and financial services industry (BFSI), small scale industries (SSI) and tourism activities. The new Industrial Policy for Delhi 2010-21 aims to provide a conducive environment for knowledge based and hi-tech IT/ITeS industries in Delhi.

In 2016-17, the tertiary sector accounted for 82.26 per cent of the GSVA of Delhi, at current prices, followed by the secondary sector, which contributed 14.84 per cent).

Delhi has a large skill base. 30 per cent of the workforce is qualified for occupations such as engineering, medicine, law, and consultancy. Among all the states, Delhi has the largest share of skilled workforce, making it suitable for knowledge-based economic activities such as IT/ITeS, designing, R&D and financial services.

The government is also encouraging activities allied to industries, such as consultancy, information technology, training of skilled manpower through vocational training programmes and entrepreneurial development programmes.

According to the Department of Industrial Policy & Promotion (DIPP), FDI inflows in Delhi, including part of Uttar Pradesh and Haryana, stood at US$ 74.150 billion from April 2000 to September 2017.

Some of the major initiatives taken by the government to promote Delhi as an investment destination are:

  • The Government of Delhi plans to increase and complement the capacities of diagnostics in the state through PPP based radiology diagnostics services and labs. 
  • 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.
  • Small-scale industries registration has been simplified and replaced by memorandum under MSMED Act 2006. Further, filing of the memorandum is optional for micro, small and medium manufacturing enterprises, and micro and small service enterprises.
  • State Level Export Promotion Committee (SLEPC) has been constituted to draw export policy and action plan and approve infrastructure projects for financial assistance under Assistance to States for Developing Export Infrastructure and Allied activities (ASIDE) scheme of the Central Government.
  • According to the Delhi 2021 Master Plan, special emphasis has been laid on improved solid-waste management policies. The short-term goals are capacity building with respect to financial services and performance management, effecting trial runs of collection and waste-reduction schemes, developing transport, landfill sites and transfer stations for waste and focusing on biomedical and hazardous waste management programmes.
  • The Delhi Development Authority has approved a new land pooling policy, which is expected to result in five more subcities, such as Dwarka, Rohini and Narela, in other urban extension areas. The new policy would ensure that the private sector is involved in the development of new urban extension areas in the cities.

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