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BW Businessworld

"A Hub For Services"

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The pace of delhi's growth over the years has been sluggish, owing to rising population and infrastructure demands. Power and water shortages still continue. The 2010 Commonwealth Games boosted the city's infrastructure growth, but it could not maintain the pace to complete new projects this year. Too many authorities and lack of coordination among government departments hinder infrastructure growth. Despite these, Delhi has emerged as India's most competitive city for business in the BW City Competitiveness Report. M. Rajendran spoke to Delhi's chief minister Sheila Dikshit on what makes the state click.

Excerpts:

Our survey shows Delhi's infrastructure growth has slowed down.
Last year, we were adding infrastructure at high speed to be ready for the Games. That kind of an emergency is not there now. Perhaps, that is the reason.

Not just that. In many sectors, Delhi's growth has been lower than last year's.
The overall slowdown in the country has impacted Delhi, too. In Delhi, whatever we had targeted to collect as part of revenue generation has been achieved. The government had increased stamp duty, circle rates and excise duty, along with entertainment tax. We have been slow on (implementing) value-added tax (VAT), but I am sure we will be able to pick up.

Does proximity to the central government help get work done faster?
No. But the Centre has been kind to us, whatever party they may belong to. We have the kind of multiplicity that no state has. We are a ‘State-Union Territory'. Delhi does not have land to call its own or police to call its own, something other states can take pride in. I can't transfer a constable; nor allocate land for building a house. These are two big drawbacks. Since the federal government and diplomatic corps are also in Delhi, we have to ensure that we fulfil the vision of the federal government and also live up to the expectation of the diplomatic corps.

Better environment to do business is also a challenge.
We are North India's largest trading centre. Delhi is also one of the biggest import and export centre for goods and services. We do not have large industries, but we have 28 industrial centres, with more than 100,000 small-scale industrial units. Delhi's power reforms is a good example for privatisation of the sector. We are not going to give any incentives to attract business, but are going to get them into the habit to pay for the services they get.

But your roads and traffic are in a bad shape.
We have built the best infrastructure, but demand has been growing much faster. There are seven million cars in Delhi; we tried to deter purchase of additional cars (in a family). Now, we have to do much more. But I need support from the people. I thought the metro and low-floor buses would make some difference. Still, people continue to buy cars as a status symbol. Frankly, I have still not found an answer to this problem. But we are working hard to find one.

As Delhi is sandwiched between two states, traffic from these states continues to come and go out of Delhi. It does not impact Haryana and Uttar Pradesh, but it does impact us. Our plan to build an expressway is stuck over the cost of land acquisition. I hope it is not stuck forever because you cannot choke Delhi further. 

But companies need land to set up businesses.
As I said earlier, I do not have the powers to give them land. Companies also do not expect the Delhi government to do it for them. So they go to Noida or Gurgaon. But Delhi is a comfortable city to live. This movement (of businesses) has not impacted us yet.

But I cannot comment on the future because every corporate house that has reached a certain stature has to have a presence in Delhi. We are striving to make Delhi a hub of modernity for services business to flourish. For instance, in the past two years, Delhi has become a great place for setting up food businesses.

What has been done to promote Delhi as a services destination?
More than 97 per cent of our economy comprises services, and about 2-3 per cent are industries. We have made administration transparent. Delhi, along with Goa, was the first state to implement the Right to Information and the Right to Education Acts. The Citizen Charter was first announced by us.

(This story was published in Businessworld Issue Dated 19-12-2011)