Regularising Unauthorised Urban Industrial Areas

Policy Challenges 2019-2024:
The Key Policy Questions for the New Government and Possible Pathways
Rapid urbanization; growing energy demands; environmental degradation; declining agricultural productivity; weak human capital; generating productive jobs; new security threats; and re-positioning India in a changing global order – the new government takes charge at an important policy juncture. This document is an effort to spark debate and ideas on how India can negotiate these challenges and build a cutting edge 21st century policy environment.
5 July 2019
Partha Mukhopadhyay, Eesha Kunduri

Regularising Unauthorised Urban Industrial Areas[1]

Informality and functionality are intricately interlinked in our cities, for “the informal city is very much the functioning city” (Mukhopadhyay 2011). Policymakers, urban local bodies and government agencies need to move beyond dichotomies such as formal and informal, planned and unplanned, and recognise the interconnections among these. The relationship between manufacturing and urban planning needs to be redefined. More attention to informal manufacturing in our cities, where women constitute a visible segment of the workforce, and facilitating its connections to the formal segment will bear rich dividends, not just in supporting manufacturing, but also in raising female labour force participation, another critical policy goal.

Beyond Slums and Vendors - Factories

Two strands of discussion appear to dominate the discourse about cities and informality. First, the auto-constructed nature of most urban neighbourhoods[2], and the need for regularisation and in-situ upgradation of informal settlements. Second, promoting and supporting informal livelihoods like street trading and hawking. There is, however, another form of informal activity that is central to our cities – informal manufacturing and informally employed workers in formal manufacturing. Even when regularisation is initiated, the focus in cities across the country – whether in Delhi, Bengaluru or even the smaller towns of Maharashtra – has been on residential and commercial activity, and rarely on industrial activity. Importantly, these enterprises constitute a significant source of urban employment, particularly for women, and as such, call for policy attention.

The question of informal manufacturing is not only a question of registration and tax status of an enterprise – indeed it may well be registered – it is also about the tenuous relationship between manufacturing and urban planning and needs to be understood in this context.

Industry and the city: The case of Delhi

Delhi’s industrial landscape is dotted with several small-scale industries, wherein garment and footwear manufacturers comprise the largest share, followed by electrical machinery production and repair services (GNCTD 2010). Industrialisation in Delhi has been marked by contestations over space, and the relocation of ‘hazardous and noxious industries’, ‘large and heavy industries’, and ‘non-conforming industries’ to peripheral areas of the city. This relocation was upheld by the Supreme Court in 1996, and in its immediate aftermath, resulted in unemployment for the urban poor and migrant workers who had come to depend on these industries for their livelihoods.

Currently, Delhi has industrial activity spread over 28 planned estates, 4 flatted factory complexes, and 22 industrial areas ‘notified for regularisation’. The areas ‘notified for regularisation’ or ‘non-conforming’ industrial areas as they are otherwise known are spaces of manufacturing activity that have emerged in residential areas, particularly around urban and rural villages in response to a range of market demands. Many of these unplanned industrial areas could be said to have emerged on village lands earmarked for residential (abadi) and/or agricultural use. While there are some planning exemptions within village boundaries – lal dora areas – these do not extend to industrial activity. Thus, these areas are unplanned, unauthorised and ‘non-conforming’ in the sense of being located in areas not zoned for industrial use.

The Master Plan for Delhi (MPD) 2021 states that unplanned industrial areas are eligible for regularisation if more than 70 % of the plots in the area are engaged in industrial activity and subject to fulfilment of other stipulated conditions. It lays down guidelines for the redevelopment of these areas; pertaining to aspects like road widening, provision of services, adherence to pollution control norms, and development of open spaces and parking facilities, among others. The redevelopment plan is required to be formulated by the local body or land owning agency in consultation with a society of land owners in the industrial area, which should be mandatorily formed (DDA 2010).

In practice, however, most non-conforming industries have been subject to sealing drives to close them down, and there has not been a push for their redevelopment: neither from the owners of small-scale enterprises in these areas nor from the local bodies or concerned government agencies. Industrial activity is seen as largely operating in violation of Master Plan provisions, as a source of pollution and therefore, as an aberration to a larger vision of the city. When the Supreme Court first ordered industrial relocation, units in non-conforming areas were asked to apply for plots in the new industrial areas that were developed (mostly on the fringes): a little over 50% of the applications were found eligible and allotted plots. The approach to regularisation has entirely been on relocation; units that were allotted plots but continue to function from the non-conforming areas (and did not shift for a variety of reasons), those that were found ineligible for an alternative plot, and those that function in violation of various industrial planning regulations are all subject to being closed down.[3]

In the push to create world-class, clean and green cities, the focus often seems to be on the knowledge economy – IT and IT-enabled services – with manufacturing activity relegated to the fringes of cities. The Delhi case illustrates this starkly. Further, in interviews, industrialists argued that Delhi is an unfriendly space for industrial growth, and emphasised the gradual shift of manufacturing hubs to the neighbouring state of Haryana, alluding to agglomeration benefits and tax incentives, among other reasons.

But relocations are disruptive processes: they adversely affect both factory and home-based work for those engaged in them, particularly disadvantaging women, disrupt local work networks, and increase search, time and distance costs for new jobs. In Chennai’s Kannagi Nagar resettlement colony, located along the city’s IT corridor, Coelho, et. al. (2013) found that: “Industrial relocations increase the costs for workers to access their jobs, and depress real wages due to the fall in demand for certain kinds of work.” As nearby factories shifted further away, they found it adversely limited work and livelihoods. 

Planned and unplanned industrial areas: Co-located and Inter-linked?

While the Master Plan for Delhi (MPD) 2021 and the Industrial Policy for Delhi 2010-2021 distinguish between planned and unplanned industrial areas, narratives from the field stress the linkages between these two typologies of areas. In both these areas, industries are engaged in a range of manufacturing activities spanning, inter alia, footwear, auto-parts, garments, plastics, steel, etc. and are typically described as ‘business-to-business’ (B2B) enterprises that supply raw material and intermediate products to bigger firms in the vicinity. In interviews in an industrial area in North-West Delhi, factory owners in both the planned as well as surrounding unplanned areas spoke about interlinked activity chains: footwear straps manufactured in an unplanned areas, for instance, supplied to factories manufacturing soles in the planned areas; sorting of residual cloth received from textile hubs like Jaipur and Gurgaon, which is sold in a ‘kattar’ (residual clothes) market. Owners in the planned areas also spoke of a ‘broken chain’ due to ongoing action in the city to close down the unplanned factories, at the time of field research.

The two kinds of industrial areas are also linked in the sense of labour circulation. Being located close to each other, they draw upon the same pool of workers residing in nearby bastis, urban villages, resettlement colonies and unauthorised colonies (see Sharma and Kunduri 2015). Workers typically access work through local networks of contractors and neighbours and move between planned and unplanned areas based on availability of work.

Women’s work and unplanned industrial areas

Unplanned industrial areas also provide relatively flexible work arrangements that some women may prefer. In earlier fieldwork in East Delhi for instance, some women reported preference for work in workshops on the periphery of an urban village on account of spatial proximity, and the ability to return home during breaks, particularly to attend to children (Sharma and Kunduri 2015).  Geert De Neve (2012) makes a similar observation in his distinction between large apparel firms and smaller workshops in Tiruppur in Tamil Nadu. In more recent fieldwork in Delhi, a female worker, who works on daily wages in an unplanned area and looks for work every day, stated she preferred this arrangement over earning a meagre wage in the authorised industrial units, where they are often expected to work overtime.

Co-located planned and unplanned industrial areas also create home-based work opportunities for women, which is localised and driven by spatial networks of “jaan-pehchaan” (familiarity)., Though it can be low-paying and precarious, home-based work may be preferred by women for reasons of flexibility and legitimacy. It enables women to manage housework and childcare responsibilities along with undertaking paid work from home. It is seen as a legitimate work choice for many women, for whom going out to work in factories is often accompanied by notions of stigma and shame (Sharma and Kunduri 2015).  In the areas studied, home-based workers were involved in a whole spectrum of work, such as putting threads into bookmarks, taping of speaker components, making decorative pieces, making buffs for machines polishing steel, making bindis, fixing insoles and upper parts for footwear, etc. Most of this work is outsourced from factories in planned as well as unplanned industrial areas, many of which are small workshops operating within urban villages and unauthorised colonies. Women are remunerated at piece-rates. In the absence of designated work spaces, work is undertaken in groups using shared spaces – in common courtyards of tenements, and on cots outside their homes in bastis. Contractors and sub-contractors (often female) who bring the work to the women are often embedded as residents, thereby leveraging their connections and building relationships of trust.

Key Policy Takeaways

Regulate and regularise existing industrial areas

Instead of pushing industries to city peripheries and industrial parks with poor transport connectivity, we need measures to regulate existing industrial areas in the city, while ensuring their conformity to environmental, safety and labour regulations. The latter two are particularly important in light of several cases of factory collapses and blatant violations of labour safety and welfare; but should not be used as an excuse to drive away factories themselves. It should also be noted that when it comes to regularisation/ redevelopment of unplanned industrial areas, ‘unrealistic planning norms’ continue to hinder.[4] Industrial planning norms, thus, need to be modified to allow more flexibility in redevelopment of unplanned areas. In this, planners can draw upon instances of regularisation of residential areas like unauthorised colonies in Delhi and gunthewaris in Maharashtra (Bhide 2014). Like residential and commercial areas, the regularisation of industrial areas too needs to become a part of our urban planning discourse.

Redevelop and redesign neighbourhood amenities to encourage female labour force participation

A key benefit of regularising these industrial clusters is the retention of a number of female jobs. Redevelopment of industrial areas must thus be accompanied by interventions in the nearby residential settlements in a manner that encourages more women to participate in the labour market. In the case of home-based workers, workspaces are intertwined with living spaces, creating constraints on space. Women make do with whatever little community spaces they can manage to access. It is essential for cities to recognise that urban neighbourhoods are beyond residential, and develop amenities from the perspective of both work and living. This would involve redesigning neighbourhood amenities like community halls for multiple uses, including common workspaces – in the fashion of the co-working spaces that have emerged to support modern start-up and innovation ecosystems -- for home-based workers with amenities like toilets, lighting and ventilation.[5] Urban local bodies should be sensitised and empowered to do this.


In line with unauthorised residential and commercial areas, the regularisation of unauthorised industrial areas needs policy attention, not only because they are deeply imbricated with authorised industry and are essential to the growth of manufacturing, but also because they provide flexible work options to many women, who would otherwise not be in the workforce. This can be done, in many instances, without harming the environment. Indeed, the planning philosophies that underpin the guidelines that render them illegal may no longer be appropriate, given the technical progress and the imperative of compact, mixed use cities. This entire approach to excluding industry, particularly the informal sector, from our cities needs to be discarded.



Bhide, A. (2014). The regularising state, Economic and Political Weekly49(22), 92-100.

Coelho, K., Venkat, T., & Chandrika, R. (2013). Housing, Homes and Domestic Work: A Study of Paid Domestic Workers from a Resettlement Colony in Chennai, Economic and Political Weekly, 48(43), 39–46.

DDA. (2010). Master Plan for Delhi 2021. New Delhi: Delhi Development Authority (Reprint Edition).

De Neve, G. (2012). Fordism, Flexible Specialisation and CSR: How Indian Garment Workers Critique Neoliberal Labour Regimes, Ethnography, 1–24.

GNCTD. (2010). Industrial Policy for Delhi: 2010–2021. New Delhi: Department of Industries, Government of National Capital Territory of Delhi.

Mukhopadhyay, P. (2011). Formality and functionality in Indian cities, Seminar, 617, 2-8.

Sharma, S. & Kunduri, E.  (2015). ‘Working from home is better than going out to the factories’ (?): Spatial Embeddedness, Agency and Labour-Market Decisions of Women in the City of Delhi, South Asia Multidisciplinary Academic Journal (SAMAJ).


[1] We draw upon Eesha Kunduri’s research engagements in Delhi’s industrial areas to illustrate issues in this note. Some of the examples here draw upon field interactions over August 2018 to January 2019, conducted with Ritika Gupta, as part of the IWWAGE-IFMR initiative at ISI, Delhi led by Farzana Afridi.

[2] Auto-construction refers to the process by which residents access resources, materials, “permissions”, lay out settlements and construct houses on their own. It is not necessarily “self-built”, in that it may involve the use of masons and contractors for construction of houses as well as common infrastructure, like drains, etc.

[3] Interactions with officials at Municipal Corporation of Delhi (Civic Centre Office) and Delhi State Industrial and Infrastructure Development Corporation Ltd. (DSIIDC), as part of the IWWAGE-IFMR study (at ISI, Delhi) referred to earlier.

[4] For instance, the MPD 2021 guidelines for redevelopment of unplanned areas stipulate a minimum reservation of space: 10 % for ‘circulation / roads / service lanes’, ‘parking and loading / unloading areas’, infrastructure like Pump House, Fire Station and Police Post; and 8% for ‘parks / green buffer’. Given the density of most unplanned industrial areas, such norms render redevelopment infeasible.

[5] Discussions with Shalini Sinha of WIEGO and Firoza Mehrotra of HomeNet South Asia.

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