Realty firms push out small enterprises from Chandigarh

The industrial area in Chandigarh that has over 1,000 small and medium units has been languishing due to lack of attention.

According to the master plan of the city, the industrial area in Phase one and Phase two cannot be expanded.

As a result many entrepreneurs who wanted to expand relocated in Punjab, Haryana and Himachal Pradesh. The industrial area Phase three, earlier designed for the expansion of industry is also not likely to be allotted to the industrial units.

According to members of the industrial associations of Chandigarh, of 150 acres of total area, a third has been dedicated for medicity where private players in the health sector would utilise the land and the remaining area would be auctioned.

The Chandigarh Administration introduced a conversion policy in September 2005 according to which industrial units can carry out commercial activity on the payment of conversion fees.

But the units with an area of less than two kanal (1000 square yard) cannot opt for conversion.

The vice-president of the Chamber of Chandigarh Industries said that the FAR (floor-area ratio) of industrial plots was 1.25 and that of commercial plots was 2.

This was an indication that commercial ventures were given an edge over industries. He added that they cannot expand their operations in the existing premises.

"I started my setup two decades back and with the passage of time, if my bottomline is growing, I cannot grow here as the policies are tilted towards commercial growth," says an industrialist.

Some of the known pharmaceutical units, sanitary ware units and auto ancillary units have expanded their operations in Panchkula, Derabassi and Baddi due to want of space.

Arun Mahajan, honorary secretary, industrial association of Chandigarh, says that the growth of shopping malls and multiplexes in industrial area would not be sustainable as it would put immense pressure on the existing infrastructure like roads, parking space, water supply and power load.

The chambers also alleged that the conversion fee for the various projects was Rs 2,000 per square yard whereas for real estate projects it was less than half of this.

Sources also said that many SMEs have plots on GPA (general power of attorney) basis. So they were not eligible for bank loans in case of purchase of property on GPA. If an SME wants to relocate by disposing of its plot in Chandigarh, he does not get a buyer due to this requirement.

Some of the veteran industrialists said that the administration was more keen on inviting bigger players in the field of IT, healthcare and entertainment and leaving the SMEs to fend for themselves.