Delhi-NCR Gen­er­at­ing growth op­por­tu­ni­ties for di­verse seg­ments of the econ­omy

Gen­er­at­ing growth op­por­tu­ni­ties for di­verse seg­ments of the econ­omy

Electronics Bazaar - - Contents -

In­dia’s Na­tional Cap­i­tal Re­gion (NCR) is emerg­ing swiftly as a global eco­nomic hub, with its con­tri­bu­tion to In­dia’s GDP stand­ing at around 8 per cent (2016-2017). With strong pol­icy sup­port from the Delhi gov­ern­ment and the re­spec­tive states that fall in the NCR, there are many at­trac­tive in­vest­ment op­tions for the elec­tron­ics in­dus­try in the re­gion.

To speed up in­dus­trial growth and to pro­vide a strong im­pe­tus to the ad­join­ing re­gions like Gu­ru­gram, Farid­abad, Noida and Ghazi­abad, the Delhi-NCR area has adopted the clus­ter ap­proach to serve large, medium and small en­ter­prises in the for­mal and in­for­mal sec­tors. There are vast dif­fer­ences in the eco­nomic struc­ture and the na­ture of in­dus­tries in each sub­re­gion of the NCR, even in those close to each other. For in­stance, the Na­tional Cap­i­tal Ter­ri­tory (NCT) of Delhi pri­mar­ily com­prises in­dus­tries that be­long to the ter­tiary or ser­vices sec­tor, whereas the re­gions in Ut­tar Pradesh (UP) and Ra­jasthan are still dom­i­nated by the pri­mary sec­tor. The Haryana sub-re­gion has a mix­ture of firms from the in­dus­trial and ser­vice sec­tors. Gu­ru­gram dis­trict, from this sub-re­gion, has shown tremen­dous growth in per capita

in­come, pri­mar­ily due to the rapidly ex­pand­ing soft­ware sec­tor. On the other hand, Pa­ni­pat in an­other Haryana sub-re­gion is de­vel­op­ing as a ma­jor trade cen­tre. An elec­tron­ics man­u­fac­tur­ing clus­ter (EMC) is now be­ing set up in the Bhi­wadi dis­trict of Ra­jasthan, as an am­bi­tious green­field project.

The de­vel­op­ment of the Del­hiNCR zone is largely at­trib­uted to its strong trans­porta­tion net­work. The growth story of Delhi-NCR is very dy­namic and di­verse, be­cause of the in­volve­ment of many sub-re­gions from dif­fer­ent states. In this ar­ti­cle, we will dis­cuss the cur­rent and up­com­ing projects in dif­fer­ent ver­ti­cals, and will look at how sup­port­ive the re­gion ac­tu­ally is in pro­mot­ing star­tups, es­pe­cially with re­spect to the elec­tron­ics in­dus­try.


Road de­vel­op­ment projects: The trans­porta­tion sys­tem in the NCR is largely de­pen­dent on roads. Keep­ing this in mind, the state gov­ern­ment in its 2018-19 bud­get has al­lo­cated ` 51.45 bil­lion for im­prov­ing the pub­lic trans­port sys­tem in the NCT. The road net­work of Delhi has in­creased from 32,131km in 2007-08 to 33,868 lane-km in 2015-16 and cur­rently con­sti­tutes around 12 per cent of the cap­i­tal’s to­tal area. It is es­ti­mated that around 40,000 out­sta­tion ve­hi­cles en­ter the na­tional cap­i­tal daily, lead­ing to con­ges­tion and pol­lu­tion in the re­gion. The con­ver­gence of five na­tional high­ways (NH-1, NH2, NH-8, NH-10 and NH-24) onto the ring roads of Delhi/NCR also causes se­vere con­ges­tion, due to heavy move­ment of goods and pas­sen­gers. There­fore, the gov­ern­ment has passed pro­pos­als to con­struct a few mega ex­press­ways, which will not only de­con­gest and re­duce pol­lu­tion in the cap­i­tal but also in­te­grate the re­mote sub-re­gions of the NCR more ef­fec­tively. Let’s have a look at some am­bi­tious up­com­ing road projects that are ex­pected to see the light of day very soon.

• East­ern Pe­riph­eral Ex­press­way (EPE): This is sched­uled to be in­au­gu­rated very soon. The EPE is a 135km six-lane ac­cess­con­trolled ex­press­way which will con­nect Kundli to Pal­wal in Haryana via Ghazi­abad in Ut­tar Pradesh, and has in­ter­changes at var­i­ous in­dus­trial ar­eas like Bhagh­pat, Meerut, etc. The project will cost around ` 110 bil­lion, of which ` 44.2 bil­lion will be in­vested within Delhi’s bound­aries alone. Re­ports claim that once com­pleted, it will be the coun­try’s first so­lar pow­ered ex­press­way cou­pled with in­tel­li­gent traf­fic man­age­ment sys­tems (ITMS). It is ex­pected that the EPE will di­vert an es­ti­mated 20 mil­lion ve­hi­cles, in­clud­ing 52,000 trucks that are cur­rently pass­ing through Delhi ev­ery day, which will even­tu­ally bring down the ve­hi­cle pol­lu­tion in the re­gion by 27 to 28 per cent. • Western Pe­riph­eral Ex­press­way (WPE): Widely known as the Kundli-Mane­sar-Pal­wal Ex­press­way, this will cover a dis­tance of 136km along the pe­riph­ery of western Delhi. Equipped with a four/six lane ac­cess-con­trolled con­fig­u­ra­tion, this ex­press­way will lead to the in­ter­na­tional air­port in the cap­i­tal and fa­cil­i­tate the de­vel­op­ment of a new eco­nomic cor­ri­dor. The cost of the project is es­ti­mated to be around ` 19.15 bil­lion. Like the EPE, the WPE will also be equipped with ITMS and elec­tri­fied by so­lar pan­els. Al­most 15 fly­overs will be con­structed at var­i­ous places along the stretch to en­able smooth com­mut­ing. • Delhi-Mum­bai Ex­press­way: Nitin Gad­kari, the min­is­ter for road trans­port and high­ways, has re­cently ini­ti­ated work on this ex­press­way, which will sub­stan­tially re­duce the travel time be­tween the two met­ros. The con­struc­tion work will be car­ried out in four phases and is ex­pected to be com­pleted by 2021. The min­is­ter claims that once com­pleted, the ex­press­way will en­able trav­ellers to com­plete the jour­ney of 14,000km be­tween the two met­ros in 12 hours. The cost of the project is es­ti­mated to be around ` 1 tril­lion. Along with this, the Cham­bal ex­press­way that will con­nect Mad­hya Pradesh and Ra­jasthan to this new ex­press­way, is also be­ing planned.

Rail­ways: Be­ing the na­tional cap­i­tal, Delhi and its ad­join­ing re­gions are well con­nected via rail net­works to other parts of the coun­try. The New Delhi Rail­way Sta­tion, which is the head­quar­ters of the North­ern Rail­ways, is one of the busiest sta­tions in the coun­try and sup­ports a sig­nif­i­cant amount of trade. Un­der the project ‘Mis­sion Raf­taar’, the In­dian Rail­ways is plan­ning an in­vest­ment of around US$ 1.5 bil­lion to in­crease the speed of trains to up to 160km per hour on the Delhi-Howrah and Delhi-Mum­bai routes. To boost the rail net­work in the NCR, the Board of the Na­tional Cap­i­tal Re­gion Trans­port Cor­po­ra­tion has in­vested US$ 3.34 bil­lion in the 92km Rapid Rail Tran­sit Cor­ri­dor (RRTC) which will serve Delhi, Ghazi­abad and Meerut.

To re­duce the car­bon foot­print, the Cen­tre is plan­ning to run four ma­jor rail­way sta­tions in Delhi on so­lar power. As per plans, Hazrat Niza­mud­din sta­tion will have a so­lar power plant of 0.6MW ca­pac-

ity, the Old Delhi sta­tion will have a 2.2MW so­lar plant, the New Delhi Rail­way sta­tion will have a 1.1MW so­lar plant, and the Anand Vi­har ter­mi­nal a so­lar ca­pac­ity of 1.1MW. The coun­try’s first so­lar-pow­ered train was launched last year from the Saf­dar­jung rail­way sta­tion in the NCR.

The de­vel­op­ment story of Delhi-NCR is in­com­plete without the men­tion of the Delhi Metro, which has be­come the life­line of the re­gion. The Delhi Metro Rail Cor­po­ra­tion (DMRC) is re­spon­si­ble for serv­ing Delhi and its satel­lite cities like Farid­abad, Gu­ru­gram, Noida and Ghazi­abad, with ef­fi­cient con­nec­tiv­ity. In the 2017-18 bud­get, the state gov­ern­ment has pro­posed to in­vest US$ 179.4 mil­lion on the DMRC.

Phase-III of the DMRC project is in the fi­nal stages of com­ple­tion and will in­crease the Delhi Metro daily pas­sen­ger count from 2.7 mil­lion to 4.1 mil­lion. DMRC is also do­ing its bit to re­duce pol­lu­tion in the re­gion and so, along with the Mad­hya Pradesh Power Man­age­ment Com­pany, has en­tered into a power pur­chase agree­ment with Rewa Ul­tra Mega So­lar Ltd to set up a 750MW so­lar park. The power gen­er­ated from this park will ful­fil 90 per cent of the day­time re­quire­ments of the metro. The DMRC is now in dis­cus­sions with the state gov­ern­ment about ex­e­cut­ing 104km of Phase IV.

Air­ports: The Indira Gandhi In­ter­na­tional (IGI) air­port is In­dia’s largest and the world’s 16th most busy air­port as per the Air­ports Coun­cil In­ter­na­tional (ACI). A re­cent techno-eco­nomic fea­si­bil­ity re­port (TEFR) by PwC (Price Water­house Cooper) states that the IGI and the up­com­ing sec­ond in­ter­na­tional air­port in Je­war (to be op­er­a­tional by 2022) will cater to over 300 mil­lion pas­sen­gers an­nu­ally, by 2050. The re­port also points out that the IGI air­port cur­rently serves over 60 mil­lion pas­sen­gers an­nu­ally.

The Je­war in­ter­na­tional air­port, which will be com­pleted in four phases, over an area of 5,000 hectares in Ut­tar Pradesh, will have four run­ways. In the first phase, the new air­port will have two run­ways and will cater to about 80 mil­lion pas­sen­gers, the re­port sug­gests.

Sec­tors with new busi­ness av­enues

Over the last three decades, there has been vis­i­ble growth in var­i­ous in­dus­trial sec­tors within the NCR, specif­i­cally in the sub-re­gions of Haryana, UP and Ra­jasthan. Let’s have a look at the devel­op­ments hap­pen­ing in some im­por­tant sec­tors within the NCR.

ESDM sec­tor: The ail­ing elec­tron­ics hard­ware in­dus­try of In­dia got a strong boost with the set­ting up of an elec­tron­ics man­u­fac­tur­ing clus­ter (EMC) in Bhi­wadi, Ra­jasthan. Launched un­der the Elec­tron­ics Man­u­fac­tur­ing Clus­ter Scheme 2012 and backed by Elec­tronic In­dus­tries As­so­ci­a­tion of In­dia (ELCINA), the Bhi­wadi EMC is a green­field project spread across 100 acres. As of now, 19 do­mes­tic com­po­nent mak­ers have in­vested in the clus­ter, hav­ing com­mit­ted over US$ 150 for Phase I. The over­all in­vest­ment in this EMC is ` 2.19 bil­lion, and it has the ca­pac­ity to ac­com­mo­date al­most 50 com­pa­nies.

Be­sides this, the growth of the ESDM sec­tor in the NCR is ex­pected to grow tremen­dously af­ter the UP gov­ern­ment an­nounced its plans to pro­mote the Noida, Greater Noida and Ya­muna Ex­press­way area as an elec­tron­ics man­u­fac­tur­ing zone. Be­cause of their prox­im­ity to the na­tional cap­i­tal, Noida and Greater Noida have al­ready turned into man­u­fac­tur­ing hubs and en­joy the ad­van­tage of the large pool of skilled labour. Ac­cord­ing to me­dia re­ports, the new plan en­vis­ages the set­ting up of coun­try-spe­cific in­dus­trial parks, which will vir­tu­ally act as a home away from home for the for­eign com­pa­nies. This plan has the po­ten­tial of turn­ing the NCR into an ideal in­vest­ment des­ti­na­tion.

Tele­com sec­tor: In Fe­bru­ary 2018, Voda­fone of­fered tele­com users in the NCR the Voice over LTE (VoLTE) ser­vice, which not only en­sures seam­less con­nec­tiv­ity but also en­ables the cus­tomer to ex­plore newer op­por­tu­ni­ties with smart de­vices. A sub­scriber base of over 10 mil­lion in the NCR means that this area has the po­ten­tial of be­com­ing

one of the top rev­enue-gen­er­at­ing re­gions in the tele­com sec­tor.

It is dif­fi­cult to mea­sure the tele­den­sity of the en­tire Delhi-NCR zone due to its dis­crete na­ture. How­ever, ac­cord­ing to the Tele­com Reg­u­la­tory Au­thor­ity of In­dia (TRAI), NCT Delhi had a tele­den­sity of 252.73 per cent, with nearly 53.58 mil­lion wire­less sub­scribers and 3.22 mil­lion wire­line sub­scribers, as of Jan­uary 2018.

So­lar sec­tor: Al­most the en­tire NCR has been bat­tling with the prob­lem of air pol­lu­tion, a sub­ject that makes the head­lines ev­ery year. There­fore, so­lar en­ergy has been sug­gested as an im­por­tant step in com­bat­ing pol­lu­tion. Act­ing quickly in this di­rec­tion, NCT Delhi has in­creased its so­lar power gen­er­a­tion ca­pac­ity to 78MW from the 56MW recorded last year. Gu­ru­gram, too, has reached a to­tal in­stalled ca­pac­ity of 25MW of so­lar power, which is a 47 per cent in­crease over the cor­re­spond­ing pe­riod of 2017 — un­der­lin­ing the grow­ing po­ten­tial of re­new­able en­ergy in the NCR. In ad­di­tion, to in­crease adop­tion of rooftop so­lar prod­ucts within the re­gion, Delhi based com­pany, My­sun, has an­nounced a spe­cial scheme for Delhi/NCR cus­tomers. Un­der the terms of the scheme, the com­pany has waived the in­stal­la­tion fees for cus­tomers in­stalling so­lar rooftop fa­cil­i­ties, within a lim­ited pe­riod.

Par­tic­u­larly in NCT Delhi, the state gov­ern­ment has put forth a pro­posal to de­velop the New Delhi Mu­nic­i­pal Coun­cil (NDMC) area as a So­lar City by in­stalling SPV pan­els on the rooftops of gov­ern­ment build­ings, metro sta­tions, bus stops, etc. Be­sides this, 74MW of so­lar ca­pac­ity is be­ing cre­ated across Delhi, at var­i­ous gov­ern­ment de­part­ments, as well as in the do­mes­tic and so­cial sec­tors.

(Source: Eco­nomic Sur­vey of Delhi 2017-2018)

An at­trac­tive startup zone

As of Au­gust 2017, Delhi-NCR ranked sec­ond, be­hind Ben­galuru, as the tech­nol­ogy hub of In­dia. Data re­leased by Tracxn Tech­nolo­gies re­veals that Delhi-NCR is home to more star­tups (8,772) than Ben­galuru (6,818), but these in­clude star­tups in the fi­nan­cial and con­sumer ser­vices fields. The re­port points out that Delhi-NCR also hosts the high­est num­ber of on­line re­tail star­tups – a to­tal of 1,288. Ma­jor on­line star­tups like Ibibo, Len­skart, Paytm, Snapdeal, Shop­clues and Pol­icy Bazaar are based in this re­gion.

An­other re­port ti­tled ‘In­dia An­gel Re­port 2017’ by ven­ture debt firm In­noVen Cap­i­tal, high­lights that Delhi NCR re­ceived up to 33 per cent of an­gel in­vest­ments, whereas Mum­bai, Chen­nai and Ben­galuru re­ceived only 14 per cent, 12 per cent and 10 per cent, re­spec­tively.

As to why star­tups pre­fer to set up shop in Delhi-NCR over Ben­galuru, ex­perts say that most of the

star­tups thriv­ing in Ben­galuru are based on tech­nol­ogy-ori­ented ideas, and have been started by tech­nol­ogy pro­fes­sion­als. So the ecosys­tem in Ben­galuru is favourable for tech star­tups. On the other hand, in Del­hiNCR, pro­fes­sion­als with a busi­ness or non-tech­ni­cal back­ground can eas­ily be­gin their startup jour­ney. It is im­por­tant to note that star­tups nowa­days are not driven only by tech­nol­ogy ideas but are widen­ing their scope to fi­nan­cial ser­vices, con­sumer ser­vices as well as other ver­ti­cals.

An­other cru­cial rea­son for star­tups choos­ing Delhi-NCR above Ben­galuru or any other metro is the pres­ence of the strong net­work of busi­ness in­cu­ba­tors in the re­gion, which fuel their growth, giv­ing them the thrust they need to take that gi­ant leap into the en­tre­pre­neur­ial world.

In­cu­ba­tor fa­cil­i­ties

From pro­vid­ing men­tor­ship to en­trepreneurs and shar­ing of­fice space, to en­abling net­work­ing op­por­tu­ni­ties and ac­cess to in­vestors, a busi­ness in­cu­ba­tor of­fers ev­ery type of as­sis­tance that a startup may re­quire in the early stages. Let’s have a look at the in­cu­ba­tors that are sup­port­ing star­tups in Delhi-NCR.

Amity In­no­va­tion In­cu­ba­tor: Es­tab­lished in 2008, the Amity In­no­va­tion In­cu­ba­tor (AII) cen­tre is run by Amity Univer­sity. This Noida based in­cu­ba­tor is a reg­is­tered ‘not for profit’ so­ci­ety backed by an ad­vi­sory

body con­sist­ing of in­dus­tri­al­ists, ven­ture cap­i­tal­ists, tech­ni­cal spe­cial­ists and man­agers. The mo­tive of this in­cu­ba­tor is to en­able en­trepreneurs to re­alise their dreams by pro­vid­ing a range of in­fra­struc­ture, busi­ness ad­vi­sory, men­tor­ing and fi­nan­cial ser­vices.

Ben­e­fits of­fered: The AII men­tors star­tups in the ar­eas of e-learn­ing, bio-fu­els, soft­ware test­ing, mo­bile test­ing, clin­i­cal data man­age­ment, me­dia and e-com­merce. The cen­tre has in­cu­bated more than 100 com­pa­nies and claims to have gen­er­ated em­ploy­ment for around 3,500 peo­ple so far.

Elec­tro­preneur Park: Funded by the Min­istry of Elec­tron­ics and IT (MeitY), the Elec­tro­preneur Park was launched in 2015 with a tar­get to in­cu­bate 50 ESDM star­tups over the first five-year pe­riod. Sit­u­ated at the Univer­sity of Delhi, South Cam­pus, the cen­tre was cre­ated to pro­mote, de­velop and men­tor break­through in­no­va­tions in the ESDM sec­tor.

Ben­e­fits of­fered: The plat­form of­fers a state-of-art elec­tron­ics lab and pro­to­typ­ing ma­chines to en­able star­tups to build elec­tronic prod­ucts within a short turn­around time. The cen­tre of­fers men­tor­ship by in­dus­try vet­er­ans and aca­demi­cians in the ESDM do­main, apart from pro­vid­ing ac­cess to fund­ing agen­cies to fa­cil­i­tate seed fund­ing for promis­ing ven­tures.

In­dian An­gel Net­work (IAN) In­cu­ba­tor: The IAN was started in April 2006, and com­prises a net­work of an­gel in­vestors in­ter­ested in fund­ing early-stage busi­nesses that have the po­ten­tial to cre­ate dis­pro­por­tion­ately high value. The cen­tre helps star­tups scale up and cre­ate value quickly.

Ben­e­fits of­fered: Along with fund­ing, the in­cu­ba­tor of­fers con­stant ac­cess to high qual­ity men­tor­ing, a di­verse net­work of re­sources as well as sug­ges­tions on strat­egy and op­er­a­tions.

Tech­nol­ogy Based In­cu­ba­tor (TBI): Lo­cated in the Univer­sity of Delhi, South Cam­pus, TBI was es­tab­lished in 2009 with the aim to help star­tups and early-stage busi­nesses in the ar­eas of in­dus­trial mi­cro­bi­ol­ogy and biotech­nol­ogy, with an em­pha­sis on the fer­men­ta­tion-based pro­duc­tion of dif­fer­ent bioac­tive mol­e­cules. Along with the sup­port of the De­part­ment of Sci­ence and Tech­nol­ogy (DST), this in­cu­ba­tor also has a close as­so­ci­a­tion with the Na­tional Re­search De­vel­op­ment Cor­po­ra­tion (NRDC), the Fed­er­a­tion of In­dian Cham­bers of Com­merce and In­dus­try (FICCI), the As­so­ci­a­tion of Small and Medium En­trepreneurs (ASME), and oth­ers.

Ben­e­fits of­fered: The most cru­cial ben­e­fit of­fered by TBI is prod­uct de­vel­op­ment. In ad­di­tion, it also pro­vides a unique in­ter­face be­tween academia and in­dus­try, where lab­o­ra­tory scale re­search can be con­verted into pi­lot man­u­fac­tur­ing pro­cesses.

The road ahead— build­ing the IT in­dus­try

It is true that the IT in­dus­try in Delhi-NCR has not yet sur­passed the level reached by Ben­galuru, In­dia’s Sil­i­con Val­ley, but the re­gion is cer­tainly de­vel­op­ing into one of the coun­try’s fore­most IT des­ti­na­tions. The prime rea­son for the rapid growth in the IT in­dus­try is Delhi-NCR’s ex­cel­lent con­nec­tiv­ity with sur­round­ing re­gions, and the avail­abil­ity of a di­verse pool of skilled labour as well as ac­cess to the mar­kets of the ad­ja­cent states. Both the Cen­tre and the state gov­ern­ments are ag­gres­sively for­mu­lat­ing poli­cies that will spur in­vest­ments in the re­gion’s IT sec­tor and also pro­mote the over­all growth of In­dia’s IT in­dus­try. For in­stance, the ‘sin­gle win­dow’ ap­proval mech­a­nism pro­posed by the Delhi gov­ern­ment helps en­trepreneurs to sub­mit all their sup­port­ing doc­u­ments at a sin­gle lo­ca­tion or to a sin­gle au­thor­ity, which stream­lines the oth­er­wise time-con­sum­ing process of ap­provals and clear­ances.

In a nut­shell, Delhi-NCR is inch­ing to­wards de­vel­op­ing a highly-func­tional en­tre­pre­neur­ial ecosys­tem. This fact, cou­pled with ex­panded ter­ri­tory and ex­cel­lent in­fra­struc­ture, will at­tract for­eign in­vestors and pave the way for more job cre­ation which will thereby make a di­rect con­tri­bu­tion to In­dia’s GDP. There are many en­ter­prises in the re­gion that are play­ing a sig­nif­i­cant role in en­hanc­ing the over­all in­vest­ment cli­mate. In the next seg­ment we will show­case some of the ma­jor con­trib­u­tors.

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