In a significant move aimed at revitalising the city's industrial landscape, the Central Government is examining major relaxations in Chandigarh's building bye-laws, land use policies, floor area ratio (FAR), and regulations for mixed-use development. This initiative is designed to boost industrial growth and address the city's persistently poor performance in national ease of doing business rankings.
Task Force Constituted for Deregulation
The Centre has constituted a dedicated task force to tackle regulatory challenges and streamline processes for industries in Chandigarh. The task force is chaired by Surendrakumar Bagde, the Director General of the National Centre for Good Governance, Government of India. His mandate includes engaging with city stakeholders to identify necessary changes to transform Chandigarh into a hub for business and industrial growth.
Bagde is scheduled to hold a crucial interaction with key industry associations and senior officials of the Union Territory administration on December 9. "The centre has been pushing for reforms in the city to help improve ease of doing business. Chandigarh has been consistently ranked at the bottom in the national ease of doing business rankings. Some of the important issues of reforms pertain to land use, zoning, FAR restrictions, and approval processes," a UT official confirmed.
Long-Standing Industry Grievances
The industrial sector in Chandigarh has struggled for relevance, with a large-scale migration of units to neighbouring states over the last few decades. Industry bodies attribute this exodus to policy inertia and bureaucratic bottlenecks.
A primary demand has been the relaxation of the restrictive Floor Area Ratio (FAR) of 0.75, which industrialists claim renders operations economically unviable. In stark contrast, neighbouring industrial areas in Punjab, Haryana, and Himachal Pradesh—such as Mohali, Panchkula, Dera Bassi, Barwala, and Baddi—offer a FAR between 2.5 and 3.
Other critical issues flagged for reform include:
- Outdated building plan requirements, including mandatory coverage area norms labelled as "outdated" by industry.
- Ownership rights restrictions that prevent the conversion of leasehold industrial plots to freehold. This has led to legal disputes, expansion constraints, and borrowing limitations, putting Chandigarh at a disadvantage compared to neighbouring states that allow conversion at minimal rates.
- The need to permit service activities in Industrial Areas as per the approved list under the MSME Act.
Harassment from Building Violation Notices
Industry representatives highlighted the persistent issue of building violation and misuse notices from the estate office. Thousands of such notices are pending, causing significant harassment. They argue that if the administration adopts the MSME Act, 2006, and increases the permissible FAR, a majority of these notices would become redundant.
While the UT administration has historically responded negatively to these demands—often referring matters like leasehold conversion to the Ministry of Home Affairs—the Centre's latest intervention has sparked hope. "Now, with the Centre taking initiative in deregulation for industry growth, there is hope that long-pending issues will be resolved," an industry representative stated.
The Chandigarh Administration has already begun acting on the task force's initial recommendations, indicating a potential shift towards a more industry-friendly policy framework. The outcome of the December 9 meeting is eagerly awaited by stakeholders who see this as a decisive moment for Chandigarh's industrial future.
