Gurgaon and Faridabad – An Exercise in Contrasts
Bibek Debroy and Laveesh Bhandari1
Section 1: Background and Motivation
There is a general sense that the legal system in India is inefficient. First, there is
over-legislation and unnecessary State intervention, both in the form of statutes and
administrative law (rules, regulations, procedures). This increases non-transparency
and contributes to rent-seeking, which is not distributionally neutral, because the
relatively poor tend to suffer more. Second, over-legislation exists simultaneously
with under-governance, because laws aren’t enforced and the dispute resolution
system, including enforcement of contracts, isn’t credible. Reforming legal
institutions is not only a desirable end in itself, it also has the byproduct of adding to
GDP growth. While these points are unassailable, most empirical work on
documenting inefficiencies of the Indian legal system is fraught with problems. For a
start, cross-country comparisons tend to be overly simplistic, ignoring the specifics of
the legal regime and the context within which the country is situated. In addition,
legal indicators used, even when they are not cross-country, tend to be too macro and
aggregate and are indiscriminately used. For instance, data collected for Hyderabad
are applied to all of Andhra Pradesh. This paper adopts a different approach. It draws
contrasts between Gurgaon and Faridabad, districts (and towns) not only located
within the same State, but also districts with similar historical and geographical
backgrounds. This enables one to control for many variables that cause different
trajectories of legal and economic development within and across countries. The
paper then seeks to explain the differential growth in these two geographical regions
through differences in the legal land regimes.
Section 2: The Land Issue
Significant economic reforms have been introduced since 1991 that have resulted in
higher rates of GDP growth, with some inter-regional variations. Since economic
development is invariably correlated with increased urbanization, there has been
greater demand for “urban” land. But constraints have adversely affected the supply
of land required for urban growth.
What is relevant is that land is classified as agricultural and non-agricultural, with
agricultural equated with rural and non-agricultural equated with urban, though the
correspondence is of course not that simple. Most rural land is privately held, while
significant urban land is held by the State.
In catering to demands for
commercialization and urbanization of land, three kinds of issues arise.
First, what is the process of acquiring privately held rural land? In some instances,
free private-to-private land transfers are prohibited by the State and land can only be
1
Centre for Policy Research and Indicus Analytics respectively. The authors would like to
thank Sivaramakrishnan, Hemant Batra, Silvi Kurian, Amaresh Dubey, and Deepa Nayak for their help
and insights. All errors are ours. Contact: bdebroy@gmail.com and laveesh@indicus.net.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
1
acquired by the State. As fall-outs, there are questions about the compensation paid,
the sanctity of contracts, the dispute resolution system, and so on.
Second, once land has been acquired, what is the process of conversion of agricultural
land to non-agricultural use? This is discretionary and non-transparent, providing
opportunities for rent-seeking.
Third, once land has been converted to non-agricultural use, there is still discretion on
the kind of use that can be made of this land. Therefore, land markets are distorted
and prevent free land transfers. Both urbanization and urban planning are
constrained.
Urbanization
Consequently India is a country that is under-urbanized in that urbanization levels in
India are low, both in comparison with developed countries, and also in comparison
with other developing countries. India’s rate of growth in urbanization has also
slackened over the decades. Apart from the availability of land, several factors
determine urbanization: India’s positive, high levels of economic growth, decline in
the percentage of the work-force employed in agriculture, higher levels of literacy and
reduced transaction costs associated with migration, are bound to increase the forces
pushing towards greater urbanization.
1.1 Urban Planning
Urbanization raises issues of urban planning and distribution of population within
urban centres, since there is a concentration of populations within larger metropolitan
areas. Depending on population sizes, cities are divided into six categories and twothirds of the urban population is in Class I cities, that is, cities that have population
more than 1 million as per the Census 2001. For the first time, the Census of 2001
collected data on slums and 607 cities and towns reported slum populations. About
22% of the population in these cities lived in slums, though figures are much higher
for Greater Mumbai, Delhi and Kolkata.
While urban planning has many dimensions, building regulations (floor space
indices), rent control regulations and land-use restrictions (master plans, zoning
regulations) constrain availability of housing, real estate and urban land. Not all
available urban land becomes available on the market, creating artificial shortages and
inefficiencies in usage. Investments in real estate are deterred. Not all real estate
becomes available on the market, creating artificial shortages and inefficiencies in
usage.
1.2 Acquiring Land
The core of land law remains the Land Acquisition Act of 1894.2 This covers
acquisition of land for “public purpose” by the government or by a government
agency, after paying compensation to individual land-owners. The process of
acquisition is important and begins with a preliminary notification. Section 4(1) of
2
However, the quotes are not from the original 1894 text, since there have been several
amendments. Incidentally, the original British legislation was partly motivated by the intention of
developing railways and acquiring land for these.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
2
the Act states, “Whenever it appears to the appropriate Government the land in any
locality is needed or is likely to be needed for any public purpose or for a company, a
notification to that effect shall be published in the Official Gazette and in two daily
newspapers circulating in that locality of which at least one shall be in the regional
language, and the Collector shall cause public notice of the substance of such
notification to be given at convenient places in the said locality.” Appropriate
government usually means the Central or State government. But local authorities and
societies, cooperative or otherwise, can also acquire land through the government.
After notification, there is a process of inviting objections and a final award that
involves payment of compensation.
Many objections centre on the amount paid as compensation and their perceived
deviations from market rates. Therefore, quotes from Sections 23 and Section 24 of
the Land Acquisition Act are also relevant. Section 23 states,
(1) “In determining the amount of compensation to be awarded for land acquired
under this Act, the Court shall take into consideration- first, the market-value of
the land at the date of the publication of the notification…; secondly, the damage
sustained by the person interested, by reason of the taking of any standing crops
trees which may be on the land at the time of the Collector's taking possession
thereof;
thirdly, the damage (if any) sustained by the person interested, at the time of the
Collector's taking possession of the land, by reason of serving such land from his
other land; fourthly, the damage (if any) sustained by the person interested, at the
time of the Collector's taking possession of the land, by reason of the acquisition
injuriously affecting his other property, movable or immovable, in any other
manner, or his earnings; fifthly, in consequence of the acquisition of the land by
the Collector, the person interested is compelled to change his residence or place
of business, the reasonable expenses (if any) incidental to such change, and
sixthly, the damage (if any) bona fide resulting from diminution of the profits of
the land between the time of the publication of the declaration … and the time of
the Collector's taking possession of the land. …
(2) In addition to the market value of the land as above provided, the Court shall in
every case award a sum of thirty per centum on such market value, in
consideration of the compulsory nature of the acquisition.” Section 24 has the
caveat “But the Court shall not take into consideration - first, the degree of
urgency which has led to the acquisition; secondly, any disinclination of the
person interested to part with the land acquired; thirdly, any damage sustained by
him which, if caused by a private person, would not render such person liable to a
suit; fourthly, any damage which is likely to be caused to the land acquired, after
the date of the publication of the declaration…, by or in consequence of the use to
which it will be put; fifthly, any increase to the value of the land acquired likely to
accrue from the use to which it will be put when acquired; sixthly, any increase to
the value of the other land of the person interested likely to accrue from the use to
which the land acquired will be put; seventhly, any outlay or improvements on, or
disposal of the land acquired, commenced, made or effected without the sanction
of the Collector after the date of the publication of the notification…; eighthly,
any increase to the value of the land on account of its being put to any use, which
is forbidden by law or opposed to public policy.”
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
3
Hypothetically, land acquisition can only apply to barren land, forests, swamps or
land under water bodies. Unfortunately, there isn’t that much of land of that category.
Hence, agricultural land is also acquired and converted to non-agricultural use.
Originally, most of this was done for the public sector for housing, setting up
industries and setting up of industrial estates. While compensation issues were
contentious even then, they became more contentious when an amendment to the
Land Acquisition Act in 1984 allowed land to be also acquired for companies.
Though originally this clause was only meant for housing, it now covers any “public
purpose” and allows private developers to acquire land in the same manner. A city
development authority can reclassify agricultural land as non-protected land, meant
for non-agricultural use. Simultaneously, an industrial development board can
acquire village land. In these processes, the local government or the gram panchayat
is meant to be consulted. But this principle is honoured in the breach. This acquired
land can be handed over to private developers, often in non-transparent fashion.
Alternatively, in independent contracts, private developers can buy up agricultural
land. Subsequently, local authorities can be persuaded to allow conversion of this
agricultural land for non-agricultural use. Zoning laws can be altered.
The criticisms are about non-participation and non-transparency in decision-making
processes in the Land Acquisition Act and have now led to an amendment Bill that is
pending before Parliament. “The Land Acquisition (Amendment) Bill, 2007 amends
The Land Acquisition Act, 1894. The Bill redefines 'public purpose' as land acquired
for defence purposes, infrastructure projects, or for any project useful to the general
public where 70 per cent of the land has already been purchased. The Bill bars
acquisition for companies except under the 70 per cent condition. For acquisition
resulting in large-scale displacement, a social impact assessment study must be
conducted. Tribals, forest dwellers, and those with tenancy rights are also eligible for
compensation. Acquisition costs will include payment for loss or damages to land,
and costs related to resettlement of displaced residents. While determining
compensation, the intended use of land and value of such land in the current market
is to be considered. The Bill establishes the Land Acquisition Compensation
Disputes Settlement Authority at the state and central levels to adjudicate disputes
resulting from land acquisition proceedings.”3
In the SEZ (special economic zone) debate in India, some controversies concern
distortions in land markets. The idea of free trade zones or special economic zones is
not new to India. SEZs have been around since 1965. However, what is new about
SEZs since 2000 is that private sector development of SEZs, as opposed to private
sector entities existing in publicly developed SEZs, is allowed and fiscal incentives
have also been granted to such private developers. That apart, distortions are created
in land markets, with State governments offering subsidized land and allowing
conversion of agricultural land or usage for purposes (real estate, education, hospitals)
that wouldn't have been allowed had a SEZ not been there. That is, in these SEZ
enclaves, land usages are permitted that are not permitted elsewhere, outside the
enclaves. In that sense, there are distortions. This is complicated by questions of
compensating people who earn a living from the land (as opposed to possessing
titles), court intervention and the certainty of land prices increasing after the contract
3
http://www.indiatogether.org/2008/may/law-land.htm
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
4
to sell has been executed. For instance, unless one seeks Court intervention, the
District Collector’s4 decision is final. This is not purely a SEZ issue, since it has also
figured in other non-SEZ type projects. West Bengal is a case in point, in the news
recently, because of a proposed Tata automobile producing factory in Singur. Before
that, there was controversy over a SEZ in Nandigram. Nandigram is a SEZ, while
Singur is not. But in both instances, the nature of the controversy concerns the
adequacy of government-provided compensation for land acquisition. Determination
of ‘adequate compensation’ could either be based upon the current value of
agricultural land or the expected future value of the land once it is used for
commercial purposes.
Notwithstanding euphoria about panchayats and the local government itself owning
equity in a development project, no one has yet been able to figure out how all such
stake-holders can benefit from resultant multiplier benefits, apart from the obvious
proposal of reserving some jobs for locals, with its resultant inefficiencies. Panchayats
involve decentralization of decision-making powers, with participation by stakeholders. In contrast, existing laws are often centralized and colonial, with
untrammeled powers in the hands of the executive, without decentralized
consultations being mandatory.
However, the provisions of the Land Acquisition Act do not apply if the
acquisition is completely carried out by a private entity, as opposed to
acquisition by the government that is then handed over to a private entity. In
other words, if the private entity (say, a construction company) acquires
agricultural land at the prevailing agriculture land prices, converts it to nonagriculture purposes with the state government’s acquiescence, and obtains the
resulting rents for itself, the Land Acquisition Act is irrelevant. This is the story
of Gurgaon.
One should also mention the Urban (Land Ceiling and Regulation) of 1976, or
ULCRA, now rendered dysfunctional. This was an Act “to provide for the imposition
of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in
excess of the ceiling limit, to regulate the construction of buildings on such land and
for matters connected therewith, with a view to preventing the concentration of urban
land in the hands of a few persons and speculation and profiteering therein and with a
view to bringing about an equitable distribution of land in urban agglomerations to
subserve the common good”. There was a specific definition of “urban” in terms of
government notifications issued, but the point was that Section 21 of ULCRA also
permitted non-transparent exemptions from the ceiling legislation. Instead of
eliminating the urban land shortage, as was intended in 1976, ULCRA accentuated the
shortages through these exemptions. However, ULCRA was repealed in 1999, after
having failed to remove the urban land shortage. Haryana, Punjab and the UTs
(Union Territories) were the first to repeal ULCRA.
Both the Land Acquisition Act and ULCRA inhibit the functioning of free land
markets in India in different ways. The former applies to rural areas, where markets
are also constrained by laws on land ceilings, which vary from State to State. In
4
District Collector is a state government official who oversees most matters of the state
government’s activities at the district level.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
5
addition, in many States, tenancy is also prohibited, driving tenancy underground.
This creates disincentives in investing in land and prevents land from being offered as
collateral and thus affects finance and insurance too. Cadastral surveys are also old
and land titles unclear. In urban areas, ULCRA and its equivalent creates land
shortages. Combined with high stamp duties, building regulations and tenancy laws,
this creates artificial shortages in real estate and housing. Excess demand drives
prices up. Though difficult to quantify, both rural and urban land laws thus inhibit
GDP growth and efficiency.
The sections that follow investigate how land availability of land has affected urban
growth. To do this, as mentioned, we compare the growth of Gurgaon and Faridabad
– two cities that border Delhi. Admittedly, neither Gurgaon nor Haryana are
representative of an average Indian city; though both are comparable in many
different ways.
Gurgaon and Faridabad border Delhi, one of the higher growth centres of the country.
Though, obviously, all cities are different and Gurgaon and Faridabad are quite
different in size and character from most cities in India. However, most urban centres
have one factor in common. They all have the potential to gain from the opportunities
that high growth brings. And high growth, despite its regional variation, is quite well
spread in India. The figure below shows GDP growth of all the states and Union
Territories (UTs) in India for the period 1999-00 to 2007-08. India’s GDP grew at a
little above 7.3% and Delhi at 7.4% on an annualized basis; and 23 of the 35 states
and UTs had a GDP growth between 5 to 9 percent annually.
Figure 1: GDP Growth in India and its States
CARG 1999-00 till 2007-08
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
Nagaland
Chandigarh
Gujarat
6
Manipur
Haryana
Uttaranchal
Jharkhand
Chhattisgarh
Sikkim
Tripura
Delhi
Orissa
India
Arunachal Pradesh
Himachal Pradesh
Kerala
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
Andhra Pradesh
Goa
Maharashtra
Mizoram
Karnataka
West Bengal
Meghalaya
Tamil Nadu
Bihar
Assam
Andaman & Nicobar Islands
Punjab
Rajasthan
Uttar Pradesh
Puducherry
Jammu & Kashmir
Madhya Pradesh
0.0%
Source: Central Statistical Organization, Government of India
The story that follows is symptomatic. There is high growth, and there is pressure on
urban areas to grow. Various factors constrain land availability thereby constraining
urban growth. But urban growth is occurring despite these constraints. How does
that happen?
But as will become clear later, the issues identified are prevalent across the country
and continue to affect urban growth in India.
Section 3: Gurgaon and Faridabad
Gurgaon and Faridabad offer a very useful contrast in studying differential patterns of
development for various reasons. First, both are located in the same State, this allows
one to control for determinants of development that may vary from one State to
another. Second, both are located in the south-eastern parts of the State, in the plains,
and this enables one to control somewhat for variations due to topography and
climate. Third, to the extent that this is important, both districts share common ethnic
cum religious backgrounds. Haryana’s Muslims are mostly concentrated in
Mahendragarh district, while Sikhs are concentrated in districts neighbouring Punjab
State, though there are some Sikhs in Faridabad, as there are descendants of migrants
from Pakistan after 1947. Subsequently, there have been migrants from Rajasthan,
Bihar, UP and West Bengal. Both Gurgaon and Faridabad have a predominantly
Hindu and Jat background. Fourth, both districts have a common historical legacy
and we will come back to this point later. Fifth, since both are proximate to Delhi and
NCR, they have good transport connectivity. It is estimated that 50% of Haryana’s
income tax collections come from Gurgaon and Faridabad districts.
As per the 2001 Census, Haryana had a population of 21.14 million.
Administratively, the State is divided into 19 districts, 47 sub-divisions, 67 tehsils, 45
sub-tehsils and 116 blocks. There are 81 cities and towns and 6,759 villages. Both
the districts of Gurgaon and Faridabad were a part of a larger single district (also
called Gurgaon) since the state of Haryana was formed on 1st November 1966. On 2nd
August 1979 the erstwhile Gurgaon district was bifurcated into Faridabad and
Gurgaon districts. Each district contains a town of the same name respectively.
3.1 Faridabad
The core of Faridabad district is Faridabad city, said to have been founded in 1607
ACE. It is not very clear who Faridabad is named after. It might have been named
after Sheikh Farid, Jehangir’s treasurer, or it might have been named after Baba Farid,
a sufi saint. If the Sheikh Farid story is believed, accounts suggest that Sheikh Farid
built the city to preserve and protect a major road (the Sher Shah Suri Marg or the
Grand Trunk Road) that passed through this area. This is now Delhi-Mathura
National Highway No. 2 that goes on all the way up to the eastern parts of the
country, with road connections also to cities like Agra and Gwalior. The broad gauge
New Delhi-Mumbai railway line runs through Faridabad. In the 2001 Census,
Faridabad city had a population of 1.05 million, the only million-plus city in Haryana.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
7
Depending on how the two end-points are defined, Faridabad city is 25 to 28 km from
Delhi.
Faridabad district is divided into five sub-divisions, Faridabad, Ballabgarh, Palwal,
Hodal and Hathin, of which, four are proper sub-divisions. Of these, Faridabad, that
is Faridabad city, is governed by a municipal corporation, the first and only
functioning municipal corporation in Haryana. This municipal corporation was
established in 1993 and divides Faridabad city into 35 wards. Certain trends about
Faridabad’s development are evident. First, agriculture has moved out of Faridabad
city limits to the outskirts and to other parts of Haryana. This is significant because
land to the east of National Highway No. 2 was prime agricultural land, partly thanks
to the spread of canals. Second, agricultural land was converted to non-agricultural
use, both residential and commercial. In an attempt to de-clog Delhi, many central
government offices were consciously moved to Faridabad city. Third, while
Faridabad traditionally has had an industrial cum manufacturing base, it is
increasingly losing out to Gurgaon and Noida5, with industries relocating.
Figure 2
3.2 Gurgaon
The antecedents of Gurgaon district go back several thousands of years, since it is
believed, reflected in the etymology of the name, that this was a village that was
gifted by Yudhishthira to Dronacharya at the time of the Mahabharata. Through the
Mughal and early British period, Gurgaon remained under minor chiefs and formally
came under complete British administration in 1858, with reorganization into five
tehsils (Gurgaon, F.P. Jhirka, Nuh, Palwal and Rewari) in 1861. It was also
transferred from the North-Western Provinces to Punjab and in 1912, Ballabgarh
5
A district in the neighbouring state of Uttar Pradesh and which also borders Delhi.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
8
tehsil was taken from the then Delhi district and included in Gurgaon district. Some
more changes took place in 1950, with some areas transferred to Rajasthan and some
areas gained from the then Pataudi State and PEPSU (Patiala and East Punjab States
Union). In 1972, Rewari tehsil was moved to Mahendragarh district. But the most
significant change took place in 1979, when Faridabad district was formed and the
former Gurgaon district lost some of its area. There are now 9 blocks of Tauru, Nuh,
Pataudi, Nagina, Punhana, F.P.Jhirka, Sohna, Gurgaon and Farrukhnagar and again
depending on how one defines the end-points, Gurgaon city is around 32 km from
Delhi. Barring Nuh and Ferozpur Jhirka tehsils, the bulk of the population consists of
Hindus, of Jat or Rajasthani origin. In the 2001 Census, the total population of
Gurgaon district was 870,539. Gurgaon city only had a population of 173,542. The
district headquarters are in Gurgaon city and other smaller towns are Nuh, Ferozepur
Jhirka, Sohna and Pataudi. The point to note is that, especially after the formation of
Faridabad, Gurgaon remained predominantly rural, until the last few years. Gurgaon
city still does not possess a municipal corporation.
Figure 3
The origins of Gurgaon’s recent development owe much to the development of real
estate, initially residential and then commercial, by DLF and later developers. DLF
(originally Delhi Lease and Finance) was established in 1946 and in the late 1940s
and early 1950s was involved in developing neighborhoods such as like Krishna
Nagar, South Extension, Greater Kailash, Kailash Colony and Hauz Khas in Delhi.
However, statutorily, the Delhi Development Authority (DDA) came into existence in
1957 and this effectively eliminated the private sector from real estate development in
Delhi. The private sector had to look elsewhere, such as in Haryana, and the early
expansion began in the second half of the 1970s.
Other than real estate, automobiles, retail and banking, Gurgaon became an outsourcing and off-shoring hub. The perception of Gurgaon being an IT hub is not quite
true on two counts. First, many out-sourcing and off-services are actually non-IT and
are more likely to be IT enabled services than IT per se. Second, quite a bit of
manufacturing has moved in and around Gurgaon, Hero Honda and Maruti Udyog
being the two most visible. While proximity to Delhi and Indira Gandhi International
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
9
Airport may explain part of Gurgaon’s development, one must remember that rail
connectivity is far superior in Faridabad. Intra-city public transport is non-existent in
Gurgaon, though the Delhi metro will now extend to Gurgaon and an eight-lane toll
expressway now connects Delhi and Gurgaon.
The rest of this study is devoted to understanding the differential development
patterns of Gurgaon and Faridabad. While other parameters are similar across the two
geographical regions, Gurgaon has outstripped Faridabad’s growth by a considerable
magnitude. And our argument is that this is largely explained by differences in land
use patterns, in policy, as well as in favourable interpretation of those policies.
Section 4: Relative Growth
This section brings forth the underlying story behind the relatively fast paced growth
in Gurgaon accompanied by the relative stagnation in Faridabad. It uses both hard
and circumstantial evidence to put together this story of growth differential between
two neighboring cities of Delhi. It finds that a confluence of macro-economic, geospatial, political economic and institutional factors conspired to provide tremendous
advantages to Gurgaon but not to Faridabad till the mid 2000s.
4.1 Faster relative growth in Gurgaon
Why is Gurgaon’s relative growth surprising? Both Faridabad and Gurgaon as has
been discussed before, are similar sized for the districts (though not for the towns), are
in the same state of Haryana and therefore have similar local laws and regulatory
structure, they both border the southern part of Delhi, have a major National Highway
running through them, and broadly had similar infrastructure parameters. If anything
Faridabad was significantly more developed, had a significantly higher manufacturing
sector base, was relatively better endowed in terms of agricultural land and overall
can be presumed to have a higher average household income than Gurgaon. The
growth momentum was also far stronger in Faridabad city than in Gurgaon and spiked
in Faridabad in the period 1971-81 when population grew by greater than 150% in the
10 year period.
Table 1: Population in the Two Cities
Area of
Density
City 2001 2001
City
2001
1991
1981
1971
1951
1901
Faridabad MC
198.75
5,313 1,055,938
617,717
330,864
122,817
37,393
9,816
Gurgaon
28.91
7,915
228,820
135,884
100,877
57,151
18,613
4,765
Note: Faridabad MC stands for Area overseen by Faridabad Municipal Corporation; Source: Census of
India, various years. However a large part of Gurgaon which is clearly urban has not been classified as
such by the Census of India. The figures for Gurgaon’s urban population are therefore clearly underestimates.
However, between 1981 and 2008 significant changes have occurred in both districts;
they both are among the most rapidly growing districts of Haryana with decadal
population growth above 40%, to a large extent due to in-migration of workers. As
the tables below and in the Appendix show, industrial activity increased in both the
districts, but much more in Gurgaon than Haryana. It is also evident that the tertiary
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
10
sector grew much faster in Gurgaon than in Faridabad. As late as the early nineteen
eighties Faridabad was among North India’s largest manufacturing bases whereas
Gurgaon was a minor town in Haryana. Today conditions are different.
Table 2: Percentage Distribution of Workforce
1991
Agriculture
Workers
District
Faridabad
35.91
Gurgaon
46.64
Source: Census of India, 1991 and 2001
2001
Agriculture
Workers
1991
Non-agri
34.18
40.29
2001
Non-agri
64.09
53.36
65.82
59.71
Table 3: Main characteristics of registered manufacturing sector
Units
(Rs. Lakhs) (Rs. Lakhs) (Rs. Lakhs) (Rs. Lakhs)
No. of
Net Value Number of
units
Workers
Year
Output
Input
Depreciation Added
1993-94
1100
461936
358007
10899
93030
58188
2003-04(P)
1457
1354746
1094060
37113
223573
72297
District
Faridabad
Faridabad
Trend annual
rate of
Growth
5.2%
16.7%
16.5%
22.0%
14.6%
3.4%
Gurgaon
1993-94
241
299770
242805
10773
46192
16267
Gurgaon
2003-04(P)
944
2961934
2393236
116240
452458
89599
Trend Annualized
Growth
22.8%
36.8%
37.2%
41.3%
33.4%
27.7%
Note: All rupee amounts in nominal terms; Rs 1 lakh = Rs. 100,000
Source: Economic and Statistical Organization, as reported in Statistical Abstract of Haryana, Govt. of
Haryana, 2004-05.
Though Faridabad has lower share of its work-force devoted to agriculture, the share
is more or less stagnant. Gurgaon’s on the other hand is changing rapidly, moving
away rapidly towards non-agriculture activity. This shift in occupations is also
reflected in the relatively greater growth in Gurgaon’s manufacturing sector – in terms
of output, value added and employment of the registered (organized) manufacturing
sector.
Note that the above data are from early nineties onwards, older data are not available
at sufficient level of disaggregation. However, anecdotal evidence and journalistic
accounts suggest that these trends began in the 1980s.6
Scores of result come up under the search term “growth of gurgaon since 1980s” on Google. “...
Gurgaon was basically a village that began to see prominence in the mid 1980s. ...”
www.streetdirectory.com/travel_guide/76543/india_properties/property_in_gurgaon.html; “Gurgaon
began to see prominence in the mid 1980s” www.articlesbase.com/real-estate-articles/the-spreadingout-of-gurgaon-86707.html; “It all started in the early 1980s and two decades later it hasn't stopped. ...”
www.gurgaonsearch.com/index8.html. . “The impressive growth that this cyber city has shown is
hardly comparable” www.indianrealtynews.com/real-estate-india/gurgaon/real-estate-investments-ingurgaon.html; “In early 1980s, these colonisers had hundreds of private borewells and were drawing
water free of cost.” www.indiaenvironmentportal.org.in/node/14939; “The main growth of the sector
started with joint-ventures in the 1980s” www.nosweat.org.uk/story/2007/06/08/gurgaon-workersnews-indian-sweatshop-conditions-resistance-documented; “Gurgaon’s phenomenal growth in the
6
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
11
4.2 Cheaper Land in Gurgaon
As mentioned before, prior to 5th August 1979 Gurgaon and Faridabad were both part
of the same administrative unit – the Gurgaon District. By a state order the erstwhile
Gurgaon district was divided into two parts on that day - the new smaller Gurgaon
district and Faridabad district. Each of these districts contained the city of the same
name. The divergent growth story of the two cities starts from this point.
Geographically the Aravali hill range separated the two new districts. Faridabad lies
between the Aravalis and the Yamuna, one of North India’s largest perennial rivers.
The land is relatively richer alluvial with a high water table and consistent land
sloping from the Aravalis in the West to East towards the Yamuna. In other words,
agriculture is far more productive in Faridabad – with relatively richer soil, easy
access to water through tube wells and irrigation channels, and good drainage.
Consequently the new Faridabad district had more productive and valuable land.
The new Gurgaon on the other hand was not as well endowed. The Aravalis to its
east cut off both drainage as well as possibility of water for irrigation from the
Yamuna. Sub-surface water remains the primary source of water for agriculture but is
brackish, the soil is also not considered as rich.
Not surprisingly the differences between the two districts agriculture are quite stark.
Faridabad being far ‘richer’ than Gurgaon. This, we argue, was instrumental in
Gurgaon’s early growth as it ensured easier access to land (low population density)
that was also presumably cheaper (though comparable data on land values are
unavailable, the productivity differences were quite pronounced). Moreover, the
productivity differences have only widened in the last two and a half decades. Being
less productive and less in demand for agricultural purposes, Gurgaon’s land was
more readily convertible to non-agricultural purposes and government policies
allowed this conversion. This didn’t happen in Faridabad, where land was relatively
more fertile.
Table 4: Gross Value From Agriculture Per Hectare at Current Prices (Rs)
District
80-81
85-86
90-91
95-96
00-01
04-05
Faridabad
4,323
6,382
12,289
22,562
40,613
49,252
Gurgaon
4,141
5,510
11,297
19,254
31,787
36,083
Faridabad as a
% of Gurgaon
104%
116%
109%
117%
128%
136%
Source: Statistical Abstract of Haryana 2005-06, Govt. of Haryana.
There are many reasons why productivity differences may have widened. For one,
irrigation has improved far more in Faridabad than in Gurgaon; this is only partly a
result of its natural advantages. (See Table A7 in Appendix)
recent years gave rise to generation of ... plant that started in early 1980’s Gurgaon developed as an
automotive hub. ...” www.mygridjobs.com/india/jobs-in-gurgaon.html; the point is, that this is
universally acknowledged phenomenon.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
12
But irrigation is only one component of the story. The government is a large buyer of
agricultural commodities, especially cereals. These purchases go to feed the
subsidized public distribution system across the country. Typically government
purchases are at higher than market prices. Government and quasi government
organizations open market purchases of cereals occurred on a large scale in
Faridabad, but less so Gurgaon. The obvious answer is that, given the quality of land,
such marketable surpluses were more in Faridabad than in Gurgaon. After all,
procurement primarily meant rice and wheat. This would also have impacted relative
agricultural land prices in the two districts in favour of Faridabad. (see Table A8 in
Appendix)
The land size distribution was also skewed towards larger plots-sizes in Gurgaon than
in Faridabad. In other words, land for non-agricultural purposes was cheaper and
larger plots were more available in Gurgaon. To this end, limited growth in irrigation
and insignificant government purchases in Gurgaon further added to the value
differential in land. Converting agriculture to non-agricultural land was therefore far
easier and cheaper for the private construction firms in Gurgaon, and the monetary
returns to the entities involved in this were also consequently far higher in Gurgaon.
Table 5: Agri-Land Distribution
1980-81
1980-81
Faridabad Faridabad Gurgaon Gurgaon
Size Group (in hectares) No.
Area
No.
Area
Below 0.5
16091
7024
23110
6648
0.5 to 1
13752
8231
15171
12562
1 to 2
12578
23864
19385
33813
2 to 3
7205
1657
11774
24833
3 to 4
5883
15652
8286
28044
4 to 5
3834
16716
5433
26363
5 to 7.5
3653
19327
5598
39854
7.5 to 10
1516
12821
2447
20261
above 10
1325
20744
1868
35663
Total
65837
141036
93072 228041
Average size of holdings
1.91
2.45
Source: Statistical Abstract of Haryana 2005-06, Govt. of Haryana.
4.3. Preference for Gurgaon’s Infrastructure
Two aspects of infrastructure are extremely critical in the commercial development,
especially in the Indian context where infrastructure bottlenecks are well known.
These two are roads and electricity. By the early eighties it was quite apparent that
Faridabad required intensive infrastructure improvements. Its large manufacturing
sector required a well spread and maintained road infrastructure, and also required a
well spread power network. However, where non rural infrastructure investments are
concerned we find that the majority of growth occurred in Gurgaon rather than in
Faridabad.
Why might this be the case? Since a large economically active base already existed in
Faridabad, the state government could have generated greater economic returns with
greater investments in Faridabad. Both electricity and roads are controlled by the
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
13
state government and therefore the direction is not provided through the market or
through any other institution. Instead, priorities related to investment in infrastructure
are decided by the state government through its various arms. However, the trigger
for road development was a Central government initiative through the National
Highway Development Programme (NHDP), which upgraded national highways,
under the purview of the Centre. State highways, under the purview of State
governments, were upgraded later and were not part of the NHDP. NH (National
Highway) 8 passes through Gurgaon and goes on to Jaipur. NH-2 passes through
Faridabad and goes on to Mathura. However, upgradation of national highways also
requires land acquisition and conversion. Consequently, Gurgaon gained at
Faridabad’s expense. Conversely, Faridabad is on a railway network, while Gurgaon
isn’t. But unlike reforms in the road sector, there were no reforms that improved the
railway network. As for electricity, reforms stagnated in both Gurgaon and
Faridabad, since the issue wasn’t just generation or transmission, but distribution too.
There is no government document that explicitly lays out this preference for Gurgaon.
Later sections also discuss why Faridabad with its own local government was unable
to circumvent such hurdles. As a side-note, also mentioned in the previous sections,
earlier data are unavailable for electricity but the trends that played out since the mid
nineties reflect a longer trend.
Table 6: Electricity Infrastructure
District
Faridabad
Gurgaon
Year
1996-97
1996-97
Faridabad
Gurgaon
2005-06
2005-06
Low Tension
lines (Circuit
11 KV. Lines
No. of
km.)
(Circuit km.)
transformers
7123
3022
6065
8340
3106
4948
9244
10400
3736
4737
8417
7874
Faridabad
% Growth
30%
24%
Gurgaon
% Growth
25%
53%
Source : State Electricity Board, Haryana; earlier data are not available
39%
59%
Table 7: Metalled roads in km
District
1979-80
2005-06
% Growth
Faridabad
943
1172
Gurgaon
1241
1635
Source: Statistical Abstract of Haryana 2005-06, Govt. of Haryana.
24%
32%
4.4. Macro-economic forces: Why the Faridabad Lobby Weakened
The above sections argue that cost and availability of land favoured the development
of a new city rather than the expansion of an old one. The state government also did
its bit to ensure both adequate and cheap availability of agriculture land and greater
infrastructure investments in Gurgaon relative to Faridabad. One question that
therefore emerges is, were there not any political forces emanating from those
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
14
dependent on Faridabad’s economy? Why could Faridabad’s elite, members of a
much larger city with a strong manufacturing base, not lobby for greater investments
in their city? The answer lies in the differential incentive structure emanating from
differential land owning patterns. In Faridabad, those who would have gained the
most did not have the wherewithal to push for rapid changes. But in Gurgaon those
who owned the land found a willing partner in the political class.
Before proceeding further on these lines, it would be pertinent to mention some
macroeconomic changes that were occurring in India at the time.
Indian economic reforms started in the mid-eighties and gathered momentum in the
early nineties. The bulk of Faridabad’s manufacturing base developed before this
period. In line with overall economic structure of India during that period, the large
industrial base of Faridabad produced for a domestically-oriented market. High
import tariffs and various benefits for small scale and import substituting units
supported this manufacturing base.
Further entry and production in most
manufacturing sector were controlled through an elaborate licensing regime. The
1990s reforms led to de-licensing of most manufacturing, open entry both for
domestic and international firms, rapid lowering of import tariffs, depreciation of the
rupee, reduced subsidies and benefits to the manufacturing sector in general. This led
to a range of negative shocks to the manufacturing sector in India in general and
Faridabad’s in particular.
Thus through much of the 1990s Faridabad’s
manufacturing sector was not among the city’s most dynamic sectors (also see
Appendix tables A11 and A12).
Sectoral dynamics constitute another aspect of the Faridabad – Gurgaon story, for the
simple reason that the slowdown in the manufacturing sector growth affected
Faridabad’s industrial lobby’s ability to push for greater investment and focus towards
Faridabad both within Haryana and at the national level in Delhi. Meanwhile the
rapid growth of the services sector, the entry of MNCs, and the rapid rise of the export
oriented Information Technology (IT) and IT enabled services (such as business
process outsourcing) required large floor spaces which the large private entities were
willing to supply in Gurgaon. Moreover, the proximity of Gurgaon to the
international airport also supported the growth of export oriented units such as in the
garments sector.
Appendix Tables A11 and A12 indicate the range of large-scale economic activities in
the two districts. It is apparent, Gurgaon with its newer infrastructure, and active state
government support, along with greater and more pro-active actions of the private
sector construction companies was able to attract a far richer set of corporate entities.
Let us make this argument a bit more explicit. Agricultural land was easier to acquire
in Gurgaon than in Faridabad. The land was acquired not only by private sector
construction companies, but also (it is claimed by many though not confirmed) by the
political class, which had some inherited in Gurgaon as well. This land now needed
to be converted into non-agricultural use. And since the political class was also (as
claimed) a beneficiary from this conversion, with higher sale values resulting, the
conversion was readily done in Gurgaon. The interests tended to or were made to
coincide. Perhaps it is worth mentioning that private sector companies such as DLF
did purchase land in Faridabad as well. However, since conversion didn’t occur, that
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
15
land was eventually sold out, the key difference being that the political class owned
little land in Faridabad.
One further strand needs to be added to complete the story. Haryana was the first
state in India that allowed entry of private developers in real estate. In that sense, the
Haryana Urban Development Authority (HUDA) policies were uniform across both
Gurgaon and Faridabad. However, the so-called third-tier of government: urban local
bodies (ULBs) were missing in Gurgaon. Gurgaon only had a municipal committee,
not a municipal corporation, since it was below the relevant population threshold.
Had there been a municipal corporation, as was the case in Faridabad, there would
have been yet another tier of government, with possible countervailing checks on
arbitrary conversion of village land to urban areas. The participation of the urban
local body would have been mandatory. Since there was no such tier of government
in Gurgaon, the decisions of the Chief Minister’s office alone were sufficient. The
democratic process didn’t exist.
4.5 Lack of Local Government in Gurgaon and Centralized Administration
We now turn to an elucidation of how this land conversion process was managed for
private gain.
Land conversion requires many permissions and complex procedures. It requires the
ascent of the state government (Government of Haryana), the land development
agencies (Haryana Urban Development Authority – HUDA), and also the local
government. Within the state government the Chief Ministers (CM) office has the
key veto power in allowing land conversion. The urban development authority is also
typically controlled by the CM’s office. However the local government has its own
political-development dynamics.
Significantly the bifurcation of the Gurgaon district in 1979 led to a situation where
there was a strong local government in Faridabad – Municipal Corporation of
Faridabad, but there was no such entity in Gurgaon (in fact till today there is no
Municipal Corporation in Gurgaon city). Hence all of land conversion and
development related issues were highly centralized for Gurgaon, controlled directly
by the CM’s office, but Faridabad had a more complex environment. Given this
centralization, it was possible for the state government to take measures highly
specific for Gurgaon. This centralization ensured that decisions could be taken and
implemented rapidly. In such a situation if gains from land conversion are
concentrated in the hands of a few (large businesses and/or land owners) it would be
easier for them to synergize the incentives of the political class with their own. Of
course in the process sub-optimal decisions can be taken, urban planning can be given
short shift, etc., but that is a matter we pursue later.
But democratic institutions, even at the local level, have their own dynamic.
Procedures take time, many voices need to be heard, and idiosyncratic decisions
cannot be taken easily. Had the state government focused on improving this aspect of
local governments or Urban Local Bodies (ULBs), the Faridabad story may very well
have been different.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
16
As per the 12th Schedule of the 74th Constitutional Amendment Act of India the
Urban Local Bodies have 18 tasks under their functional domain.7 These are:
1. Urban planning, including town planning
2. Regulation of land use and construction of buildings
3. Planning for economic and social development
4. Roads and bridges
5. Water supply for domestic, industrial and commercial purposes
6. Public health, sanitation conservancy and solid waste management
7. Fire services
8. Urban forestry, protection of environment and promotion of ecological aspects
9. Safeguarding the interests of weaker sections of society, including the disabled
and mentally retarded
10. Slum improvement and upgrading
11. Urban poverty alleviation
12. Provision of urban amenities and facilities such as parks, gardens, playgrounds
13. Promotion of cultural, educational, and aesthetic aspects
14. Burials and burial grounds, cremations, cremation grounds, and electric
crematoriums
15. Cattle pounds; prevention of cruelty to animals
16. Vital statistics including registration of births and deaths
17. Public amenities including street lighting, parking lots, bus stops, and public
conveniences
18. Regulation of slaughter houses and tanneries
Decentralization to ULBs circumscribes the powers of the state government; the
ULBs can affect state governments plans in many different ways. The first is through
putting in rules and procedures related to various permissions to be granted. Apart
from town planning, these can be the in the realm of environmental clearances,
identification of priority areas for infrastructure development, etc. in line with the
powers delineated by the Constitution. The second route is more political, strong
local politicians can directly or indirectly affect state government plans. And the third
is simply the inefficiency route. Local governments typically are quite slow and
inefficient in granting the required permissions. Again, by design, Gurgaon was
spared all of this, but not Faridabad.
In Gurgaon therefore the local government did not impact road building, water supply
and sanitation, street lighting, parks etc. Rather private builders who had purchased
and controlled large tracts of land in Gurgaon were to be responsible for their own
areas, and this was supplemented by the efforts of the state government. The next
section describes the apparent consequences of this.
Until the amendment, local governments in India were organised on the basis of the ‘ultra
vires’ principle [beyond the powers or authority granted by law] and the state governments were free to
extend or control the functional sphere through executive decisions without an amendment to the
legislative provisions. The important provisions specified in the Act include constitution of
municipalities, devolution of greater functional responsibilities and financial powers to municipalities,
regular and fair conduct of municipal elections, and constitution of Wards Committees, District
Planning Committees, Metropolitan Planning Committees and State Finance Commissions.
7
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
17
While missing local governance in Gurgaon may have aided its infrastructural growth,
Faridabad was not as fortunate where urban infrastructure growth was concerned. For
one, at the outset the limits of the Faridabad Municipal corporation was a large area of
slightly less than 200 square kilometers. The land further out of these limits would
not be able to provide the same returns as that closer to the city center. Second,
Faridabad is located on a National Highway connecting Delhi to the large population
concentrations in Uttar Pradesh, Bihar and eastern India. The bulk of road transport
goes through this route. And right in the middle of Faridabad is a large bottleneck
around the Badarpur Power station. For many decades it was apparent that a flyover
needed to be built over this bottleneck, but no such infrastructure development
occurred (and is only now being built). This further constrained the flow of passenger
traffic between Delhi and Faridabad further preventing the growth of residential
suburbs in Faridabad that could service Delhi. Third, unlike in the case of Gurgaon,
the bulk of the land development occurred through HUDA in Faridabad. HUDA went
in largely for plotted residential units for individual households rather than apartment
complexes. Large private operators were therefore largely missing in Faridabad. A
good number of developed sectors within Faridabad as presented in the adjacent
figure are under the administration and management of HUDA.
Figure 4: List of functions of MCF
Figure 5
Note: Shaded areas are those controlled by HUDA.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
18
Section 5: The Institutional/Legal Background
5.1 Absent Urban Government in Gurgaon
Before we venture into the problems and advantages associated with unregulated and
unstructured private sector development of Gurgaon, we will first venture into the
question of why no municipal/urban local body (ULB) was created in that city. There
is a structured system that explains this outcome, which involves three entities. The
state government, the Census of India and the Central government’s Ministry of
Urban Development (C-MoUD).
The CMoUD on the basis of Census population figures in an area asks the state
government to set up a ULB. The state government is then supposed to take
appropriate measures. The type of the ULB to be set up depends upon the
demographic characteristics of the area. This in turn is based on the information
available with the CMoUD on that area from the last available Census. The Census
takes an area to be urban on either of two criteria.
The first set of criteria is as follows:
• A minimum population of 5000;
• At least 75% of the male working population should be engaged in nonagricultural pursuits and
• A density of population of at least 400 per sq.km.(1000 per sq. mile)
If as per the Census 1991 each of these criteria were not met, then in the 2001 Census
counting this area would not be classified as urban. Therefore there is some gap
between the time an area’s population expands and the time it formally gets
recognized as urban by the Census. Though information is unavailable, the last
criteria (that of density) was probably not met as per the 1991 in the area of Gurgaon
where the bulk of growth resides.
The second criteria used by the Census is as follows: if the state government declares
an area to be urban, then the census has to categorize that area as urban. And if the
population of that area is beyond 50,000 then CMoUD would need to recommend the
formation of a ULB to the state government. This regulation effectively ensures that
the state government does not have to wait for these demographic parameters to be
met and can take pro-active measures.
In this particular case, no such action was taken by the state; the area where rapid
development is taking place was classified as rural Gurgaon, and consequently the
setting up of the relevant ULB was delayed. As has been mentioned before, Gurgaon
does not have a municipal corporation, because developments ostensibly took place
on land that was rural, but reconverted for commercial use. There is a municipal
council in Gurgaon, but its jurisdiction only covers the old Gurgaon town. That is, all
the developments in new Gurgaon are outside the purview of this municipal council
too. Consequently, the mandated public scrutiny of urban planning proposals and the
requirement of a master plan doesn’t yet apply to the new Gurgaon.
5.2 Structure of land/property transfers
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
19
To understand how land transfers are effected, a brief digression on Indi’a land laws
is in order. The major heads under which land is classified in India are agricultural
land, commercial land, industrial land, residential land, institutional land and land
reserved for forests/green belts. The relevant laws are the Indian Registration Act of
1908 (some instruments have to be compulsorily registered), the Indian Stamp Act of
1899 and the Transfer of Property Act of 1882. The Transfer of Property Act
provides for transfers through State intervention (intestate succession, insolvency,
execution) and transfers that are done by the parties, the latter divided into transfers
by will after death and transfer inter vivos, meaning transfers by one living person to
another. In the present context, what is relevant is transfers by one living person to
another, through sale, lease, mortgage, exchange, gift and sales of share of a
company. The legal definitions of these, and the implications, are different.
Specifically within Haryana, the relevant laws for both residential and commercial
property are the Haryana Apartment Ownership Act (1983), the Haryana Apartment
Ownership Rules (1987), the Haryana Ceiling of Land Holdings Act (1972), the
Haryana Development and Regulation of Urban Areas Act (1975), the Faridabad
Complex (Regulation and Development) Act (1971), the Haryana Industrial Estates
(Development and Regulation) Act (1974), the Haryana Municipal Act (1973), the
Haryana Municipal Building Bye-Laws (1982), the Haryana Special Economic Zones
Act (2005) and the Haryana Urban Development Authority Act (1977). Note that the
Faridabad Complex (Regulation and Development) Act (1971) set up a separate
licensing regime for Faridabad and so did the Haryana Municipal Act (1973), which
did not apply to Gurgaon. The Haryana Urban Development Authority (HUDA) has
the task of developing urban land (residential, commercial, industrial) through
acquisition and the development of a land-use plan, but its flexibility is restricted in
Faridabad. Some industrial estates are planned through the Haryana State Industrial
and Infrastructure Development Corporation (HSIIDC) and this includes both
Gurgaon and Faridabad.
In the absence of any jurisdiction under the Haryana Municipal Act, all that applies to
Gurgaon are HUDA and HSIDC decisions. As has been mentioned before, these are
malleable to what a Chief Minister’s office requires.
5.3 Discretion in Land Use
The government’s discretion in land use enters through the Department of Town and
Country Planning (DTCP), Haryana. DTCP is supposed to ensure planned
development by implementing the Punjab Scheduled Roads and Controlled Areas
Restriction of Unregulated Development Act, 1963, which applies to Haryana, the
Haryana Development and Regulation of Urban Areas Act, 1975 and the Punjab New
(Capital) Periphery Control Act, 1952, which also applies to Haryana. In order to
involve the private sector in the process of urban development, the DTCP grants
licences to private colonizers for the development of residential, commercial,
industrial and IT Park/Cyber Park colonies. For granting licences, DTCP has divided
Haryana into zones. While the urban area around Gurgaon has been declared a hyper
zone, that around Faridabad is a high potential zone. In general, this means that larger
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
20
areas for development are permitted in Gurgaon than in Faridabad and change of land
use (CLU) is easier, though it also means that higher development fees are charged.
Note that under Section 7(A) of the Punjab Scheduled Roads and Controlled Areas
Restriction of Unregulated Development Act, the government can relax any
restriction or condition related to land use, if it is in “public interest”. Note also that
in municipal areas, a no objection certificate (NOC) is required from municipal
authorities. But in non-municipal areas as in Gurgaon, a NOC from the state
government’s department - DTCP is required. The point being that this NOC requires
no citizen participation (unlike a municipal council) and can be managed by the
executive.
Section 6: Conclusion - Who benefited and why
In sum, the private incentives to develop Faridabad were not as strong as those in
Gurgaon. These private incentives were in part aided by state government actions and
in part due to exogenous conditions and forces. Normal instruments of governance,
administrative systems and democratic institutions were all either circumvented or
used to ensure that Gurgaon progress rapidly. These forces produced rapid results in
Gurgaon, whereas status-quo characterized Faridabad.
There clearly are many beneficiaries in the Gurgaon story. The large private
construction companies that have developed the land have financially benefited the
most. Of these DLF would have benefited the most as it controls the bulk of the land
in the new Gurgaon, however, it would be not the only one – the Ansal group,
Unitech group, are some of the other larger companies with property interests in the
area. The state government has also benefited in the sense that greater economic
activity would have yielded greater tax and non-tax revenues for the stategovernment. (Though it is likely that the state government tax and non tax revenues
would have been higher still had Faridabad also grown rapidly.) The new private
sector dominated economy also benefited since large floor spaces were rapidly made
available, unlike in most other parts of India. These companies (both national as well
as MNCs, large and small) as well as their employees were able to quickly start and
scale their activities. It is also claimed by many (though no documented evidence
exists) that the political elite of Haryana also benefited as elites own significant
property interests in the area. If true, this last point ties in very well with the
preference shown to Gurgaon by the policy-making elites in state government, as well
as by the absence of an urban government in the city.
The key point is that if decision-making is concentrated then it is possible for lobbies
to use legal and/or extra legal means to synergize the incentives of the decisionmakers with those of their own. This can lead to greater responsiveness of
governments, as it appeared to have in the case of Gurgaon. However, if decisionmaking is spread out, as it tends to be in democratic institutions, lobbies of different
types will find it costlier and more difficult to incentivise the political class. But
despite the necessity of the government to be highly responsive to changing
requirements, it cannot be at the cost of centralization and consequent idiosyncratic
decision-making.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
21
Clearly, there are many beneficiaries in the short term. But long term sustainable
urban progress requires more than improved infrastructure and short term growth.
Development also requires a conducive environment, planning, urban services, and so
on. For some of these factors, private initiatives backed by a rapidly growing
economy and consequently high incomes could be a substitute. Private schools,
building societies with own power generators, private ground water extraction, septic
tanks in place of sanitation infrastructure, are some examples. Of course, it could be
argued that these are second-order solutions required by the continued lack of public
urban infrastructure, but they are solutions nevertheless.
There are many issues that high incomes such as those earned by Gurgaon’s residents
cannot solve. Poor urban planning has led to lack of public transport, few public
amenities, lack of footpaths, traffic bottlenecks (though arguably that exists
everywhere), garbage disposal, and lack of adequate wastewater disposal etc. As
Gurgaon grows, some of these constraints will become more and more noticeable.
Again, some of these warts can be dealt with later, however poor urban planning does
have long-term consequences.
The key question is therefore whether the absence of appropriate democratic
institutions is beneficial. The answer is straightforward. The absence of democratic
institutions can lead to long term benefits only if appropriate and adequate
institutional structure exists. Monopolistic markets do not typically lead to optimal
outcomes. Private sector monopolies have extracted rents due to their significant
market share in Gurgaon, where Gurgaon did not have a competitor city in Haryana or
in other neighboring states. On the other hand the existence of a democratic
institution such as the Municipal Corporation in Gurgaon, would also not have been
necessarily a first best solution if it was characterized by poor practices, lack of
internal systems, corruption, and low responsiveness to changing economic
conditions, as most ULBs are in India.
***
Appendix Tables
Table A1: Decennial Population Growth Rate
City
1991-2001
1981-1991
1981-1971
1951-1971
1901-1951
Faridabad MC
71%
87%
169%
81%
31%
Gurgaon
68%
35%
77%
75%
31%
Source: Census of India, various years
Table A2: Main characteristics of annual survey of industries (registered
manufacturing sectors)
Units
District
Faridabad
Faridabad
Faridabad
(Rs. Lakhs) (Rs. Lakhs) (Rs. Lakhs)
Year
1993-94
1994-95
1995-96
(Rs. Lakhs)
Net Value Number of
No. of units Output
Input
Depreciation Added
Workers
1100
461936
358007
10899
93030
58188
961
545219
459301
10855
105063
60973
1003
687198
558352
24367
104479
61877
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
22
Faridabad
Faridabad
Faridabad
Faridabad
Faridabad
1996-97
1999-2000
2000-01
2002-03
2003-04(P)
969
992
1181
1368
1457
729155
1038710
1119592
1122853
1354746
581026
871724
886962
877199
1094060
18406
34936
33801
40068
37113
129723
132050
198829
205586
223573
61558
62905
69731
72965
72297
Faridabad
Gurgaon
Gurgaon
Gurgaon
Gurgaon
Gurgaon
Gurgaon
Gurgaon
Gurgaon
Trend
Annualized
Growth
1993-94
1994-95
1995-96
1996-97
1999-2000
2000-01
2002-03
2003-04(P)
5.2%
241
311
356
418
489
684
950
944
16.7%
299770
492516
776843
943559
1380981
1893832
2089828
2961934
16.5%
242805
392795
597514
734935
1057847
1590280
1682042
2393236
22.0%
10773
17890
23808
31062
49725
87893
88391
116240
14.6%
46192
81831
155521
177562
273409
215659
319395
452458
3.4%
16267
20639
31460
30966
41035
60975
72738
89599
Trend
Annualized
Growth
Gurgaon
22.8%
36.8%
37.2%
41.3%
33.4%
27.7%
Note: All rupee amounts in nominal terms; Rs 1 lakh = Rs. 100,000
Source: Economic and Statistical Organization, as reported in Statistical Abstract of Haryana, Govt. of
Haryana, 2004-05.
Table A3: Bank Credit in Gurgaon and Faridabad as % of Total in Haryana
Year
Sector
1996
2006
FARIDABAD FARIDABAD
AGRICULTURE
4.08
4.20
INDUSTRY
22.23
19.12
TRANSPORT OPERATORS
6.71
1.64
PROFESSIONAL
16.83
16.95
AND OTHER SERVICES
PERSONAL LOANS
12.16
11.89
TRADE
10.50
16.44
FINANCE
20.79
6.71
ALL OTHERS
19.99
18.49
TOTAL BANK CREDIT
16.00
12.97
Source: Reserve Bank of India
1996
2006
GURGAON GURGAON
3.44
2.65
12.29
22.01
9.73
14.65
10.05
7.62
7.95
43.21
19.04
9.90
15.66
15.65
11.84
90.19
14.35
16.96
Table A4: Gross Value From Agriculture Per Capita (Rural) at Current Prices
District
80-81
85-86
90-91
95-96
00-01
04-05
Faridabad
1,219
1,562
2,540
4,564
6,783
6,896
Gurgaon
987
1,317
2,239
3,449
4,713
4,259
Faridabad as a
% of Gurgaon
124%
119%
113%
132%
144%
162%
Source: Statistical Abstract of Haryana 2005-06, Govt. of Haryana.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
23
Table A5: Agriculture Production and Productivity
Tonnes per
Tonnes per
hectare
hectare
Hectare
Tonnes
Hectare
Gurgaon
Faridabad
Faridabad
Gurgaon
Faridabad
Total Cropped Total
Total Cropped
Production
Area
Year
Total Production Area
Productivity
Productivity
1999-00
598,100
296,400
1,043,400
261,591
2.02
3.99
2000-01
658,100
300,110
1,021,300
264,765
2.19
3.86
2001-02
645,800
298,632
1,027,400
268,541
2.16
3.83
2002-03
586,900
279,157
1,013,500
247,595
2.10
4.09
2003-04
651,300
300,660
979,400
266,726
2.17
3.67
2004-05
601,700
288,155
918,800
269,901
2.09
3.40
Source: Ministry of Agriculture, Government of India
Unit
District
Tonnes
Gurgaon
Table A6: % of Net Irrigated Area to Net Sown Area
Normal annual
rainfall in mm
District
80-81
85-86
90-91
95-96
00-01
04-05
(2000-2004)
Faridabad
47.9
55.2
50.2
74.2
76.3
79.1
534.4
Gurgaon
38.3
39.2
51.8
32.3
42.6
54.5
484.9
Source: Statistical Abstract of Haryana 2005-06, Govt. of Haryana.
Table A7: Net Area Under Irrigation '000 Ha
2004-05
Net Area
Under
Irrigation
District
Faridabad
Gurgaon
% Irr to Net
Sown Area
117
90
79.1
54.5
1981-82
Faridabad
90
53.6
Gurgaon
81
40.1
Source: Statistical Abstract of Haryana 2005-06, Govt. of Haryana.
Table A8: Procurement of wheat
District
Year
Faridabad 1996-97
Gurgaon 1996-97
State Govt HAFED*
30
50
20
20
Faridabad 2005-06
Gurgaon 2005-06
48
1.2
59
2.6
Faridabad % Growth
61%
18%
Gurgaon % Growth
-94%
-87%
Note: HAFED: Haryana Agro Marketing Federation, is a state government controlled entity.
Source: Statistical Abstract of Haryana 2005-06, Govt. of Haryana.
Table A9: Metalled roads per 100 sq km area
District
Faridabad
Gurgaon
1979-80
2005-06
43.9
45.7
54.5
60.1
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
24
Table A10: India’s Growth Rate in 1990s & 2000s
(Rs. Crores)
Year
Manufacturing GDP
(1999-2000 prices)
1990-91
158,590
1991-92
152,802
1992-93
159,122
1993-94
172,637
1994-95
191,123
1995-96
219,528
1996-97
243,511
1997-98
247,192
1998-99
253,919
1999-00
264,113
2000-01
284,571
2001-02
291,803
2002-03
311,685
2003-04
332,363
2004-05
361,115
2005-06
393,956
Trend Annualized
Growth Rate (1990s) %
(Rs. Crores)
Tertiary Sector GDP
(1999-2000 prices)
449,686
471,257
496,477
534,551
572,012
630,988
677,791
744,406
806,597
887,771
938,217
1,005,324
1,079,486
1,171,368
1,283,253
1,409,357
7.23
8.48
Trend Annualized
Growth Rate (2000s) %
6.88
8.01
Source: Central Statistical Organization, Government of India.
Table A11: Illustrative List of Companies in Gurgaon
Source: http://en.wikipedia.org/wiki/List_of_companies_in_Gurgaon
IT Companies
Company Name
Origin
Domain
Closed Gap
Netherlands
IT Services (SaaS) Utilities
Nokia Siemens Networks
Finland
Telecommunications
Alcatel-Lucent
USA
Telecommunications
Motorola
USA
Telecommunications
Adasoft India Pvt Ltd
Switzerland
IT Services
Agilis Information
Technologies International Pvt
USA
IT Services
Ltd
AVL Software
India
IT Services
Aequor Technologies
USA
IT Services
Albireo-STS
USA
IT Services
Amrop International
India
IT Services
Appulse Technologies
USA
IT Services
Avanade
USA
IT Services
Bizcom Interactive
India
IT Services
Creative Interactive
India
IT Services
Catabatic Automation
Technology Pvt Ltd
India
IT Services
Daffodil Solutions
India
IT Services
Evalueserve
USA
KPO
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
25
Satyam Computer Service Ltd.
HCL Technologies
India
India
Information Technology Services
Information Technology Services
Desktop and Laptop machines,
Services, consulting
IT Services
Information Technology Services,
Consulting
Telecommunications Equipment
IT services
Internet, Computer software
IT Services
IT Services
IT Services
IT Services
IT Services
IT services
Internet marketing, IT and consultancy
IBM
Infinity eSearch
USA
India
Koves Technologies Pvt Ltd
Ciena Corporation
Evalueserve
Google Inc
Infiniteoutsourcing
InfoIndia
KLG Systel
Libra Solutions
Infinite IT Solutions
Microsoft
Modulus Systems
Optimistic Software Solution
(P) Ltd
Polaris Software Lab Limited
Genpact
Nagarro
Dell Inc
Niksun
Aricent
Sapient
i-flex Solutions
Infosys BPO Ltd.
Copal Partners
Hughes Systique Corporation
Interglobe Technologies
SAP
NCR
Sagacious Softwares
RSB Systems
TCS
Wipro Technologies
Tekriti Software Pvt Ltd
ORACLE
Financial Services
Futures First
iTrust
HealthCare/IT Services
USA
USA
USA
USA
India
India
India
India
India
USA
India and UK
New Delhi, Hyderabad,
Chennai, Bhubaneswar
India
India
USA
USA
USA
USA
USA
India
India
India
USA
INDIA
USA
USA
India
India
India
India
India
USA
INDIA
INDIA
Electronic Trading
Financial Advisory
UnitedHealth Group
USA
HealthCare
USA
India
USA
USA
USA
Multinational
India
USA
Management consulting services
Management Consulting Services
Management consulting
Management consulting
Management consulting
Placement and HR Services
BPO
Relationship Marketing, Advertising
Web Hosting, Development and SEO
IT Services, Consulting
BPO
IT services
Computer hardware
Network Solutions, network security
IT services
IT services
Computer Services on Finance/Banking
BPO
KPO
Telecommunications
IT services
IT services
IT services
IT Services
IT Services
IT services
Information technology services
Information technology services
IT services
Management Consulting
Keane Inc
Technopak Advisors
McKinsey & Company
marketRx
A.T. Kearney
Amrop International
Arvato Services India
RMG Connect
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
26
Convergys
Ernst & Young
Hewitt Associates
USA
UK
USA
Accenture
Bain & Company
Opera Solutions
Xchanging
USA
USA
USA
UK
Professional Services, Management
Consulting Outsourcing, Billing,Call
Centre
Professional services
HR Outsourcing and Consulting
Management consulting, technology
services and outsourcing
Client Solutions
Management Consulting
BPO (Insurance, HR & IT etc)
Origin
India
USA
Domain
Pharmaceutical
Pharmaceuticals
India
India
Healthcare and Hospitals
Pharmaceuticals
India
Japan
India
India
Germany
Japan
India
India
Bicycle manufacturing
Automotive components manufacturer
Two wheelers: Bikes, Scooters
Automotive
Automobiles
Automobile & Truck manufacturer
Tyres
Four Wheelers
Company Name
ABN Amro
Agilent Technologies
American Express
Alpine Electronics
Air Sahara
Ballarpur Industries Limited
Cosco India Ltd
Coca-Cola
Pepsi
Enkey India
Origin
Netherlands
USA
USA
Japan
India
India
India
USA
USA
India
EFD (eFunds Corporation)
Evergreen International
Limited
Tex Corp
Amtek Auto Limited
Eveready Industries
Adidas
Bata India Ltd
Osram
Asian Paints
Asahi Glass Co.
Nestlé
USA
Domain
Financial services
Test & Measurement Equipment
Finance and Insurance
Consumer electronics
Airlines
Paper Market
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Financial Services, Electronic funds
transfer, Retail
India
India
UK
India
Germany
India
Germany
India
Japan
Switzerland
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Sportswear and Sports Goods
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Food
Pharmaceutical Companies
Company Name
Ranbaxy Laboratories
Eli Lilly and Company
GlaxoSmithKline Consumer
Healthcare India Ltd.
Morepen Laboratories
Automobile
Atlas Cycles
Denso
Hero Honda
HMSI
BMW
Honda
Apollo Tyres
Maruti Udyog
Other Industries
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
27
Ansal Properties &
Infrastructure Ltd
Indigo Design & Engineering
Associates PLC.
Corporate Executive Board
ABB Lummus Global Inc.
Bharti Airtel
Pearl Global Limited
Orient,Craft Limited
GIVO
Dheer Global
Hindustan Unilever
India
Real State
Multinational
USA
Multinational
India
India
India
India
India
India
Architecture & Urban Planning
Research and consulting
Power and Automation Products
Telecom
Textile Manufacturing
Textile Manufacturing
Textile Manufacturing
Textile Manufacturing
Fast moving consumer goods
Nature, Nature Biotechnology, Nature
Medicine
Food
Food
Conglomerates
Telecommunications Equipment
Sunglasses
Share Trading - Financial Services
Export House
Air express carrier and premium
logistics-services
Airlines
Refinery & Petrochemical Technology
Nature Publishing Group
Mahashian Di Hatti
Prefetti India Limited
Siemens AG
Tellabs
Polaroid Corporation
Geojit Financial services Ltd
Crew BOS Products Ltd
UK
India
India
Germany
USA
USA
India
India
Blue Dart
IndiGo Airlines
UOP LLC
India
India
USA
Table A12: Illustrative List of Companies in Faridabad
Source: http://faridabad.nic.in/industri1.htm
Small Scale Industries
Name of the Industry
Advance Forgings P. Ltd.
AGI Switches P. Ltd.
Agro Engineering Works
Ajay Enterprises
Alchem International P. Ltd.
Alcon India
Alloy Cast P. Ltd.
Alpine Appearls
Ambika Forge P. Ltd.
Amforge Industries Ltd.
Anil Rubber Mills P. Ltd.
Anu Products Ltd.
Archem Industries
Aristocraft Int'l P. Ltd.
Ashoka Insulations
Associated Engg.
Associated Strips P. Ltd.
Auratrax P. Ltd.
Auto Lamps Ltd.
Bee Ell Industries
Belmount Rubber Industries
Belmaks Pvt. Ltd.
Bhartiya Udyog Ltd.
Bhupendra Steels Ltd.
Manufacturers of
Raw Steel Forgings.
Switch Fuse units, Starters & Switches for electrical appliances.
Sheet Metal Pressed Fabricated Components for Automobiles.
Fan Parts.
Extraction of Herbs.
Automobile Sheet Metal Parts.
Die Casting.
Driving gloves, Goggles.
Brass Forgings & Turnes Components.
Tractor & Wheel Rims.
Rubber Conveyor Transmission & Train Light Beltings.
Pesticides.
Chemicals.
Light Engg. Goods.
Fibre Glass Sleeving Varnished, Fibre Glass Cable.
Industries Auto Parts.
Steel tubular poles, pipes & tubes.
Wooven labels for garments.
Automobile & Incadescent Electrical Lamps.
Ceramic Products.
Rubber Automotive Parts.
Engineering Industry.
Bull Gas Generators.
Steel & Stainless Steel SG Iron Rounds squares flats of alloy steel,
Casting, Hot rolles alloy steel bars in various grads.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
28
Bhartiya Electricals P. Ltd.
Birla VXL Ltd.
B. KAY Engineering Works
BL Containers P. Ltd.
Blue Stampings & Forgings
Ltd.
Bolton Pvt. Ltd.
Bony Rubber Co. P. Ltd.
BPR Tex Prints P. Ltd.
Bright Oxygen & Actylene
Co.
Brawn Laboratories Ltd.
Well Rope Intl. Ltd.
Capital Flour Mills
Centrifugal Casting Co.
Century NF
Chanda Enterprises Ltd.
Charu Electrical P. Ltd.
Classic Furniture Mfg. Co. P.
Ltd.
Colts Auto P. Ltd.
Concord Controls P. Ltd.
Consolidated Plastics P. Ltd.
Creative Dying & Printing
Mill
Crystic Resins India P. Ltd
Curewell India Ltd.
Dalmia Electronic Corp.
D & D Organics P. Ltd.
Delhi Forgings Ltd.
Delton Cables Ltd.
Diana Organics P. Ltd.
D.S. Diesel P. Ltd
Dujodwala Industries
Eastern Engg. Corpn.
Elkay Strips Ltd.
Elkay International P. Ltd.
Elkay Telelinks Ltd.
Elemec Tools & Devices P.
Ltd.
Elofic Industries Ltd.
EM EL Duggal & Sons P. Ltd.
Encon Chemicals Ltd.
Encon Thermal Engineers P.
Ltd.
EP Electro Pressings P. Ltd.
Equipment Conductors &
Cables Ltd.
Everest Steel Fabrications
Faridabad Fabrications P. Ltd.
Fas Pack Industries P. Ltd.
FER Auto India
Fibretex Industries India
Finesse Exports P. Ltd.
Forgewell P. Ltd.
Gallium Equipment P. Ltd.
Gem International
Wiring harness & Auto Parts.
Ready made garments.
Tractor Parts.
Corrugated shipping containers & 'E' Flutes Mono Cartons.
Forgings.
Loud Speakers.
Rubber Moulded Parts & O ring bounded metal bushes & Engine
Mountings, House Pipes etc.
Dying & Printing of Fabrics.
Industrial Oxygen Gas.
Pharmaceuticals.
PP Rope & Yarn.
Maida, Suji Atta & All Types of Wheat Products.
Tractor & Oil Engine Components.
Casting Aluminium & Zinc Alloys.
Electroplating Rims.
Electrical Home Appliances.
Wooden Furniture & Other Products.
Motor Vehicle Parts.
Low Tension Control Gear Accessories.
Blowing & Injection Moulding.
Dying & Printing.
Unsaturated Polyster Resins.
Human Gamma Globulin Serum.
Electronic Consumer durable Audio Video Products.
MS Castings, CI Graded Castings, SG Iron Castings.
Rough Forging.
Thermoplastic insulated cables & wire for telecommunication.
S.O. Dyes.
Tractor & Car Parts.
Resing Allied Resins Synthetic Resins, Tarpene Oil.
Sheet Metal Pressed Components.
Cable Armouring Flat & Round Wire.
LDPE/LLDPE/HDPE Sheathing Compound.
Telecommunication/ Power & Control/ Instrumentation Cable Under
Progress.
Metal Components & Sub-assembly.
Automotive, Agricultural, Earthmoving Industrial & marin filters.
Automobile Sheet Metal.
Formaldehyde.
Industrial Furnace.
Sheet Metal Components.
AASR & ACC Components.
Bolts, Nuts & Rail Screws.
Sheet Metal Works & Fabrication of Tractor Components.
Corrugated Card Board Boxes Sheets etc.
Auto Electrical Parts.
FIBRECRETE Multipurpose Insulation Boards, Control Heat Humidity
and Fungus in all Kinds of Buildings.
Readymade garments.
Steel Rough Forgings.
Tube Mill Accessories & Equipments.
Watch Analysers, Stop Watches, Timers, Hgrometers, Thermometers,
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
29
GD Industrial Engineers
Globe Hi-Fabs
Golden Peacock Overseas Ltd.
Goyal Steels Bright
Gopal Sons Auto P. Ltd.
Gurdayal Shyamlal P. Ltd.
Greiner Engg. Products
GS Kochar & Co.
Goyal Industrial Corpn.
Gulati Industrial Fabrication
Guru Nanak Industries Regd.
Hammer Forge
Haryana General Industry
Haryana Radiators Ltd.
Haryana United Tools India P.
Ltd.
Hemla Embroidery Mills P.
Ltd.
HPL Industries P. Ltd.
H.S. Easwer & Co.
Husaka Refractories
Imperial Auto Industries
Ilpea Paramount P. Ltd.
Inco Wax Limited
Indapco P. Ltd.
Indication Instruments Ltd.
Indo Industrial Engineers
Indus Precision Castings
India Fashion
Jainco Steel Fasteners P. Ltd.
Jagson Pal Pharmaceuticals
Ltd.
Jain Die Casters
Jain Plastic Industries
Jai Enterprises Pvt. Ltd.
Jindal Gas Appliances P. Ltd.
Kapoor Lamps Shade Co.
Karam Engg. Works
Karnita Tex Prints P. Ltd.
Karma Processors P. Ltd.
Kay Gees
Keselec India P. Ltd.
Khanna Industries
Khaitan Electricals Ltd.
Khemka Ispat Ltd.
Kismet Industries
K.K. Plastics
Kobe Suspension Co. P. Ltd.
Khanna Fabrications Ltd.
KSF Products
Kubera Alcot
Kunal Automotive
Components Ltd.
Lakhani Rubber Works
Laldee Pvt. Ltd.
Lauls Ltd.
Snooker, Billiards Tables.
Steel Flats, Rounds etc.
Aircraft Refuelter, Dairy Equipment, Reaction Vessels & Storage
Tanks.
Assemble of lampholders & brass parts.
Steel Bars, Forging Sheet Metal Components
Bright Steel Bars/ Turned & Ground Bar/ CHQ Wires.
Inter Lining.
Automotive Parts, Wheel Cylinder, Assemblies, Air Brake Couplings,
Adaptors, Break Fittings & Sheet.
Tractor Parts.
Flush Doors, Panel Doors, Placrol Doors, Decorative Doors, Stain
Glass Doors, Black Boards & Plywood.
Steel Fabrication.
Precision Printing & Converting Machines.
Close Die Forgings.
Pressure Die Castins.
Radiators for Tractors & Automobiles.
Sheet Metal Components Die Tools, Jigs & Fixtures.
Embroidery Works.
Rubber & Plastic Chemicals
Xerographic Plates & Drum Torch Reflectors.
Steel Melting Shops & General Engg. Industries
Fuel & Oil Hoses, Fuel Injection Pipes.
PVC Extrusions.
Paper Coating, Adhesives, Prinitng Inks & Wax Blends.
PVC Rigid Semi Rigid & Soft Profiles.
Dash Board Instruments.
Sheet Metal Fabrication.
Stainless Steel & Super Alloy Castings.
Exporter of Readymade Garments.
High Tensile Fasteners.
Pharmaceuticals.
Pressure Die Casting of Aluminium & Zinc Components.
Bottons, Melamine Crockery, Industrial Moulding Components.
Home Appliances
LPG Gas Stove, Parts, Components.
Decorative Light
Tractor Parts
Dyeing & Prinitng.
Dyeing & Prinitng.
Knitting Mills Knitted Fabrics.
Street, Industrial, Commercial & Decorative Lighting Fixtures.
Sheet Pressed Components.
Electric Fans & Motors.
Cold Rolled Sheet Strips Tempered Steel & Galvanised Steel Tapes.
Trailers, Trollies & other Steel Structural Fabrication.
Plastic Injection Moulding Parts.
Leaf Spring.
Sheet Metal Components.
Dyestuff.
Anodising & Mfg. of Almunium Nameplates.
Tractor & Crane Parts.
Automobile Rubber Components.
Chaff Cutter Knives & Agricultural Implemts.
Steel Rounds, Squares/ Flats, Angles & Channels.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
30
Lemount Garments P. Ltd.
Luthra Textiles Ltd.
Maharishi Ayurveda Corpn.
Ltd.
Mahavir Enterprises
Maharaj Prints P. Ltd.
Mahavir Powders
Mandap International P. Ltd.
Mangla Udyog P. Ltd.
Manish Vinyles
Mega Forge P. Ltd.
Meenasha Casting
Melco India P. Ltd.
Melco Precisions P. Ltd.
Menon & Patel LPG Cylinders
M.G. Shahani & Co. P. Ltd.
Micro Precision Products
Minstel Insulations P. Ltd.
Mitasso Appliances Ltd.
Mitasso Appliances P. Ltd.
M.K. Petro Products P. Ltd.
Mode Prints P. Ltd.
Modern Engineering Co.
M.R. Steel Forgings P. Ltd.
Munchure Industries P. Ltd.
Nagina Metals & Engineers.
Nagpal Flooring.
Nap Sales P. Ltd.
Nestor Pharmaceuticals P. Ltd.
New India Conduits P. Ltd.
Niki Tasha India P. Ltd.
Nipha Exporters P. Ltd.
Northern Tools & Gauges P.
Ltd.
Northern India Leather
NSP Engineers & Fabricators
P. Ltd.
NSP Forgings P. Ltd.
Nufarm Chemicals
Omega Bright Steels P. Ltd.
Orient Packaging P. Ltd.
PPL Feedback P. Ltd.
Paramount Rubber Industries
Pahwa Chemical P. Ltd.
Pee Cee Castings P. Ltd.
Pee Empro Exports P. Ltd.
Perfect Pac Ltd.
Pioneer Refractories Co.
Polycast Delhi P. Ltd.
Plastipack Industries
Pooja Metal Processors P. Ltd.
P.R. Packaging P. Ltd.
Pratibha Ceramics P. Ltd.
Precision Casting
Print Craft Press
Press Cast Industries
Preswel Industries
Progressive Packaging
Readymade Garments.
Textiles Dyeing & Printing.
Ayurvedic Medicines.
Moulded Rubber Plastic PVC, FRP, Components.
Printing of Silk Fabrics.
UF Powder/ MF Powder.
Wheel Rims for Motor Cycle.
Sheet Metal Components, Muffler Assy. Fasteners, Oil Pipes, Hydo
Pipes, Brake & Fuel Pipes.
Coated Cotton Fabrics.
Mfg. of Iron & Steel Forgings.
Graded grey Iron Casting Components.
Ash Handling Plant Equipment & Spares for power houses, Fertiliser
Plants etc.
Alloy Steel Castings, Super Allloys & Wires etc.
Filling Plant Equipment.
Swan Office Paste Adhesives & Industrial Adhesives.
Instrumentation Accessories.
Steel & Foundry Fluxes and Chemicals.
Home Appliances.
Automotive Parts.
Bitumen Water Proofing Felt & Components.
Dyeing & Printing.
Paper Corrugated Board & Box Making Machines.
Auto Parts Forgings.
Agricultural Machinery & Tractor Parts.
Railway Coach Works.
Venetian Blinds & its parts.
Industrial Gases.
Allopathic Medicines.
ERW Steel, Conduit Steel, Steel Tubes & Oxygen Lacing Pipe.
Fabrication of Automobile Parts.
Cotton Ginning & Textile Machinery.
HSS Cutting Tools, Precision Components & Assembly for Agro
Space.
PVC Leather Cloth
Railway Components, Fish Plates, Clamps.
Die Forgings & Railway Parts.
Thermosetting resins & Moulding Powder.
Bright Bar & Shafting.
Corrugated Boxes.
Flexible Packing Material.
Rubber Moulding.
Thermoplastic Adhesives Textile Auxillary.
Aluminium Sand & Gravity Die Casting.
Export of Readymade Garments.
Corrugated Boxes, Thermocole Products
Steel Castings.
Plastic Moulded Goods.
Slitting of CARNGO/CRCA Co.
EPS Packaging & Printed Dulex Carton.
Refractories & Kilns.
Copper Base Alloy Castings.
Printed Articles.
Die Casting for Auto Parts.
All Type of Hydraulic Pressed & Machine Tools.
Corrugated Cardboard Boxes.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
31
Industry
Progressive Thermal Controls
P. Ltd.
Punjab Industries
Rachitech Engineering P. Ltd.
Rachna Sabun Udyog
Ranivas Collection P. Ltd.
Rare Edition Prints P. Ltd.
Rare Prints P. Ltd.
Refrigeration Accessories Ltd.
Reunion Engg. Co. Ltd.
RPG Transmission Ltd.
R.R. Automotive Components
P. Ltd.
Ruchika Engg. P. Ltd.
RV Industries
Sadhu Auto P. Ltd.
Sadhu Steel Forging Industries
P. Ltd.
Sai Security Printers P. Ltd.
Samanta P. Ltd.
Sandvik Auto P. Ltd.
Sebros Enterprises
SGS Associates
Sheel Packaging P. Ltd.
Shree Industries
Shyam Alloys
Shyam Metals
Shyam Steels
Shivani Locks P. Ltd.
Sidwal Refrigeration
Industries P. Ltd.
Sirocco Pressings P. Ltd.
Sita Singh Engineers & Sons.
SJ Knitting & Finishing Mills
P. Ltd.
Skytone Electricals
Skylab Industries
S&P Threads Ltd.
S.S.P. P. Ltd.
Steel & Steel Fabrications
Studds Limited
Studds Accessories P. Ltd.
Sudtrack Linkage P. Ltd.
Sud & Waren P. Ltd.
Sumati Engineering P. Ltd.
Sunder Service Center
Sunflam Enterprises P. Ltd.
Super Alloy Cast
Super Auto Electricals P. Ltd.
Super Auto India P. Ltd.
Super Electrical & Engg. Co.
Super Electro Capacitors P.
Ltd.
Superfine Packaging
Super Fibre Ltd.
Super Parts Ltd.
Super Screws P. Ltd.
Water Meter.
Steel Rounds, Squares & Flats.
Fabricated Equipment for Lavasa Cane Handling Arrangement.
Job Work of Pure Silk Saree Printing.
Textile Prinitng.
Printing of Silk Sarees.
Brass Fittings & Refrigerator Valves.
Rewinding/ Repairing of Electrical Motors/ Generators.
Tools for Vehicle Service Center.
Tractor & Automotive Components used by OEM.
Pressure Die Castinf in Aluminium & Zinc
Sheet Metal Components.
Copper Wire
All Types of Closed Die Steel Forgings & Open Forgings.
Printing of Lottery Tickets, MICR Cheques, Share Debentures & other
Security Prinitng.
Job Work of Dying & Printing of Export Fabrics.
Auto Electrical Equipments.
Brake Pipes, Brake Hoses.
Automobile Printing Cardboard Boxes.
Printed, un-printed Card Board Boxes.
Fan Blades.
Manufacturing of Tractor Parts.
Forgings.
Rerolling of Carbon & Alloy Steels.
Automotive Door Latch Locking System.
Air Conditioners & Water Coolers.
Clutch Systems.
Auto Parts & Body Building
Processing of Cotton & Art Silk Fabrics.
India Electrical Wires & Cables.
Plastic Injection Moulded Plastics.
Sewing Thread Processing.
Dairy Plant Food Processing & Chemical Plant Industrial Dryer,
Evaporator, Miling M/c
Steel Fabrication & Machining.
Safety Helmets
Helmets.
Forgings, Castings.
Computer Forms mfg. Plant & Paper Conversion Machine.
Mfg. of Tractor Parts.
Petroleum Products
LPG Appliances & OTG.
Pressure Die Casting Components.
Automobile Pressure Die Casting Parts.
Automobile Parts.
Aluminium Die Castings
Capacitors.
Corrugated Rolls, Sheets, Automobile Parts
Jute Twine
LPG & Electrical Home Appliances.
Industrial Fasteners.
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
32
Supreme Plastic industries
Taj Forgings P. Ltd.
Talbros P. Ltd.
Tarachand Saluja & Sons
TechnoFab Engg. P. Ltd.
Technospring Industries
The Chemicals of India.
Thermosteel Enterprises
Toshi Auto Industries Ltd.
P.P. Engineering Works
Tractor Tirfore India Limited
Texico Tools P. Ltd.
Unimax Laboratories
Unisystem P. Ltd.
United Oil Mill Machinery &
Spares P. Ltd.
Venus Industrial Corp. Ltd.
Venus Fabrics
Victoria Tool Engineers
Vijay Mallable Pvt. Ltd.
Vikas Forgings P. Ltd.
Vipul Plastics
V & R Auto Gauges P. Ltd.
Windorz India Limited
Plastic Industries.
Forgings.
Rubberised Cork Sheets, Articles of Cork.
Petroleum Products
Heat Exchangers, Pressure Valves, Air Cannons,LP Piping Structure
Conveyor Belt Cleaning System.
Industrial Springs
Chemicals, Paints & Varnish
Hand tools & Tool Kits.
Plastic Automobile Parts.
Rolling Mill Equipments.
Hoists, Cranes & Chains.
Steel Beams & Automobile.
Pharmaceutical Equipments.
Corrugated Boxes.
Vegetable Oil Mill Machinery & Spares.
Sheet Metal Corp.
Suitings, Shirtings & Sarees.
Sheet Metal Componentd, SM Auto Electrical Parts.
C.I. Castings.
Steel Forgings of all types.
Plastic Components.
Speedometers
Aluminium Doors, Window, Curtain Wall, Structural Glazing.
Medium Scale Industries
Name of the Industry
AAC Factory (C/o Ballarpur
Industries Ltd.)
Amforge Industries Ltd.
Asea Brown Boveri Ltd.
Auto Ignitions P. Ltd.
Auto Pins India Ltd.
Avery India Ltd.
Batra Associates Ltd.
Beco Engineering(A Division
of Mukand Ltd.)
Belliss India Ltd.
Bhai Sunder Dass & Sons Co.
P. Ltd.
Birla Kent Taylor India Ltd.
Castrol India Ltd.
Clutch Auto Ltd.
CMI Limited
Continental Devices India Ltd.
Delton Cables Ltd.
Escorts Employees
Escorts Communications Ltd
Escorts Ltd.
Escorts Ltd.
Frick India Ltd.
GE Motors India P. Ltd.
General Engineering Works
Ltd.
Manufacturers of
Autoclaved Aerated Concrete Blocks & Slabs
Tractor & Wheel Rim
LT Motors
Ignition Coil, Oil Pressure Switch and Horn Relays
Leaf Spring & Various Types of Pin
Weighting Counting & Testing Machine
Auto Head Lights, Tail Lights, Blinkers, Hyd. Jack Clips, LP Valves,
Ind. Valves & Home Appliances
Machine Tools- Lathes, Planners, Plano, Millers, Special Purpose
Machines
Steam Turbines & Parts, Pressure Reducing Valve & DE Super
Heating STN
--Process Control Instruments & Control Panels
Filling of Lubricating Oil in Small Packs
Automotive Clutches, Covers Assemblies & parts thereof
Undergroung telephone cables, Optical fibre cable, Cat-5 computer
cables
Semiconductor devices
Thermoplastic insulated cables & wire for telecommunications
Ancillaries Carburators & Fuel cocks
Electronic private automatic exchange & allied equipment
(Crankshaft & hydraulic division) Crankshaft
(Railway equipment division) Railway equipments
Refrigeration & Air conditioning equipments
Special purpose electric motors, Lamination pump etc.
ACSR, PC Wires, UR Wires, Spring fine, Clutch
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
33
Gurera Gas Cylinders P. Ltd
Haryana Coated Papers Ltd.
Havells India Ltd.
Hindustan Leathers Ltd.
Hindustan Syrings & Medical
Devices P. Ltd.
Hindustan Vaccum Glass Ltd.
Indian Gas Cylinders
Injecto Limited
Jagatjit Engg. Works P. Ltd
JBM Tools Ltd. M
Jhalani Tools India P. Ltd.
JMA Industries Ltd.
JV Electronics Ltd.
Kaushico Machine Tools P.
Ltd
KG Khosla Compressors Ltd.
Khemka Containers Ltd.
KK Kohli & Bros (P) Ltd.
Knorr Bremse India P. Ltd.
Larsen & Toubro Ltd.
Lumax Industries Ltd.
Mik Fujiyama India Ltd.
New Allenberry Works
North West Switchgear Ltd.
Orient Fans
Orient Steel & Industries Ltd.
Oswal Electricals
Plasser India Ltd.
Polar Industries Ltd.
Polymer Papers Ltd.
Pooja Forge Ltd.
Porritts & Spencer Asia Ltd.
Precision Stampings
Schenk Avery Ltd.
Samtel India Ltd.
Sanden Vikas India Ltd.
Sikands Ltd.
SJ Knittings & Finishing
SPL Industries Ltd.
Sterling Tools (P) Ltd.
Super Seals India Ltd.
Suzler Flovel Hydro Ltd.
Talbros Automotive
Components Ltd.
Talbros Engineering Works
The Printer House Ltd.
The Star Wire India Ltd.
Thomson Press of India Ltd.
United Metal & Plastic Pvt.
Ltd.
Usha India Ltd.
UT Limited
VXL Engineers Ltd.
Woodward Governer India P.
LPG Cylinder & Sheet metal components
Art & Cromo Paper
Motor Control Gear & Switch Gear
Job work of finished leather
Hypodemic Glass & surgical blades, disposable syrings & needles,
scalp venis etc.
Vaccum glass & Glassware items
LPG gas cylinders
Fuel injection pipes, fuel & oil pipes, metallic flexible tubes,
aluminium & zinc pressure die cast
Sheet metal for tractor components
Tools, Dyes, Jigs Fixture, Sheet metal Componets,Welded assembly &
sub assembly, SP
Assorted Hand Tools
Automobile Ancillaries
Dipped mica capacitors & silvered mica plates, EMI filers, lamps, light
dimmers and connectors
Power press, Shearing machine
Air & gas compressors, Chilling plants, Aluminium & Grey Iron
castings
Corrugated card box boxes
Suiting & Shirtings
Air brake equipment for Indian Railways
Switch boards
Automotive parts
Auto electronic ignition systems
Gears, Shafts & axle for tractor & automobiles
Low tension switchgears
Electric fans
Hot & Cold rolled steel strips
Pressure die castings, motors & pumps
Railway track maintenance machine
Electrical stampings & laminations
Filter mant & testing machinery, Filter paper, Filer
Industrial Fasteners
Industrial paper making
Electrical stampings & lamination for fans, motors,dies
Dynamic balancing machines, dynamometers, garage equipment,
vibration measuring monitoring & control equipment
14" SVGA monitor, video monitor, 14" B/W TV ,14" TV kits
Automobile air conditioning systems & parts thereof
High tensile cold forged precision bolts & nuts
Processing of cotton & art silk fabrics
Dying & printing fabrics
High tensile steel fasteners
Oil seals & flexible hoses
Hydro turbine
Automotive gaskets of all types
Automotive gaskets
Automotive Printing Machine
Special steel, valve steel, tool & die steel
Printing books
Auto & tractor parts
Polyster capacitors
Hydraulic pumps & valves
Defence stores, relays, control panels
Power control equipment
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
34
Ltd.
Xpro India
Coextured plastic sheet & cast plastic films
Large Scale Industries
Name of the Industry
Bata India Ltd
Bhartia Cutler Hammer
Eicher Tractor Ltd.
Escorts JCB Ltd.
Escorts Ltd.
Escorts Yamaha Motors India
Ltd.
GKN Invel Transmission Ltd.
Goodyear India Ltd.
Hindustan Wires Ltd.
Hyderabad Industries Ltd.
Jindal Strips Ltd.
Lakhani India Ltd.
Nuchem Limited
Tecumseh India P. Ltd.
Whirlpool India Ltd.
Manufacturers of
Hawai & canvas shoes
Electrical/Electronics control devices & systems
Automotive agriculture tractor
Excavators Loaders
Tractors & bi wheelers
Motor cycle
Front wheel drive shaft (CV Joint)
Automobile tyres
Steel Wire, LPG cylinder, valves & regulators
Filbre & cement sheet jointing & pre fabricated prinitng panel
HR plates, slabs, blooms strips of all grades oxygen gas & argon gas
Canvas vulcanised shoes
UF/MF resins & moulding powders, hexamine, formaldehyde, medium
density fibre board
Compressors
Refrigerator
Gurgaon and Faridabad – Bibek Debroy and Laveesh Bhandari
35