How Bawana is becoming an industrial wasteland
Once looked upon as the next big MSME hub, Bawana has become an area where few businessmen want to set up shop
Spread over 2,100 acres and housing almost 18,000 industrial units, Bawana looks like a ghost town in decay. A town you would not find out of place on a zombie show like The Walking Dead. Today real estate offices are easier to find in Bawana than factories. Saddled with land which is not saleable in an industrial area where manufacturing is a nightmare, everyone wants to get out. In the early months of 2013 when small-time manufacturers explored the potential of Bawana as an alternative to Kundli industrial area, they had high hopes of profitability, better transportation and low cost of production. Three years down the line more than 6,000 such manufacturing units have either shut down or have stopped production altogether. Manufacturers are once again planning to shift to nearby industrial areas in Haryana and Uttar Pradesh.
As both the Union and state governments push for encouraging small industries to come up and create new avenues of employment in Delhi, Bawana offers some favourable conditions. It provides one of the cheapest markets and landholdings to start a Micro Small and Medium Enterprise (MSME). Land, available at just Rs 50,000 per metre, is less expensive compared to the Rs 2.5 lakh per metre in Mangolpuri area; and it has one of the largest available labour workforces with an open labour market which works on demand and supply basis. With one of the biggest water treatment plants functioning in the area, it makes Bawana an ideal place for establishing businesses with a small capital investment of Rs 50 lakh or less.
Bawana’s industrial area is comparatively new to its counterparts of Kundli, Manesar, Mangolpuri and Okhla which are over 30-40 years old and deteriorating, making it affordable as it requires less maintenance.
In time, more than 16,000 such small enterprises have found their base of operation in various sectors of the industrial area which largely includes manufacturing units of plastic, toys, biscuits, clothing and other goods. While Bawana seemed to be growing a year back, it is now facing numerous hurdles mainly due to the complexity of government procedures and a growing sense of an unsafe working environment in the region.
Poor ease of doing business
The Aam Aadmi Party (AAP) promised in its manifesto that it would ensure that starting a business in Delhi would take just one week. In the last two years, the government has managed to reduce the time-frame to 8-10 days which has led to coming up of numerous such small industries. The state government has transformed the entire process, making it online for numerous aspects of registration and getting clearances along with ending the tedious practice of obtaining a factory licence.
However, according to the latest index released by the World Bank, Delhi has slipped to 19th position in ease of doing business among Indian states. Traders are continuously blaming both the state and Union governments for the increasing complexity of the process, ignoring their demands of proper budget allocation, and the multiplicity of agencies they have to go through before getting the requisite permission. Prakash Chand Jain, Chairman of Bawana Chamber of Industries (BCI), said that “since Delhi has to go through both the state and Union governments’ procedures it makes it difficult for obtaining permissions. While the Delhi government is concerned about the betterment of the industries, the Union government is creating hurdles in its way. The state government has already cleared the file for making the leasehold plots in the industrial area freehold, but it is pending with the LG. Both the BJP and Congress had also promised freehold land in the area during the elections but are now opposing it, which shows the double standards”.
Bawana is one of the most labour-intensive industrial areas in northern India with an open market system that runs on a demand and supply basis. The government, with a view to improving labour conditions, has increased the minimum wage from Rs 9,568 to Rs 14,052 which is the highest in India. This has sent shivers down the spines of industrial bodies as it spikes the labour and production costs manifold. However, the factories are not meeting the guidelines set by the government in terms of paying their workers. Pritam, a 21-year-old from Barabanki of Uttar Pradesh—working in a jeans factory in Bawana for 12 hours a day—said that he “gets just Rs 7,000 a month and that too not on time, it is very difficult to run a family in that amount”. Factory owners, however, denied this and said that they have been paying their workers on time. The new change in the wage scale has burdened them, making the production cost go up. Jain said that this is one of the biggest reasons why the factories are once again looking towards Haryana and other states as a viable option.
A common practice seen by many in Bawana is that none of the factories has a name plate on the factory walls or on the gates, making it difficult to identify what factory it is or what is being done inside the 15-foot iron gates. Factory workers, on asking, pointed out that this practice is ensured as a precautionary measure due to fear of local goons. One of the factory owners, on condition of anonymity, said, “We are continuously under threat of extortion. Recently, a trader was kidnapped, beaten up and left injured in full daylight. Due to a small police presence—with just one post of over 10 policemen—it is getting unsafe to operate in the area.” Some of the owners also said they have been continuously demanding a police station in Bawana, but there has been no attention given towards this problem by either the state government or the Union government. Jain said, “The inspector raj which AAP promised to end is still flourishing in the area, no FIR is registered despite our regular complaints. Even a health officer has the power to penalise us.”
Amendment in labour laws
One of the biggest concerns of labour unions in the area is that the proposed amendments of labour laws by the Narendra Modi-led NDA government might give more power to the owners to crush the demands of the labourers. While the government says that laws are being amended to ensure that workers are paid an average salary of 45 days, instead of the 15 days at present, labour unions beg to differ. Harpal Tyagi, a worker in Bawana and a member of the Centre for Indian Trade Unions (CITU) opined that “the amendment is being done to boost the spirits of the big industrialists while the labourers will suffer. Already, the labour unions are getting defunct in the country. In Bawana, it is a common practice to transfer a labourer to a different unit the moment they raise their voice.”
The biggest complaint is over the proposed reform that allows companies hiring up to 300 workers to lay them off without seeking any official sanction. Labour and trade unions are continuously criticising the government’s plans to introduce this law.
The high rate of taxation levied on the manufacturers is another prime reason behind the fall in choice of Bawana as a sustainable industrial hub. Officials of the Bawana Manufacturers Association said the high rate of taxation with zero subsidy from the government has led to an unviable production model in various industries, which has led to falling hopes of manufacturers who have shut down units in recent times. Plastic manufacturing and recycling form the biggest chunk of industries in Bawana but is also facing the hardest time due to heavy taxation and the growing ban on use of plastic.
Despite our continuous efforts to get in touch with the local MLA, Ved Prakash, he was unavailable for comment.