The Municipal Corporation of Delhi (MCD) has approved two reforms in the factory license ecosystem to further ease of doing business.

As per reforms, floor-wise factory license policy has been rationalised giving relief to factory owners and factory license to actual occupier/tenant of relocation industrial plots.

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“In a big relief to factory owners carrying out the manufacturing process of different floors of a factory building, the policy requiring the need for factory license, floor wise, has been rationalised,” the civic body said in a statement.

Earlier, there was uncertainty whether the factory owner was required to take factory license for each floor where the factory activity was carried out, MCD Commissioner Ashwani Kumar has approved the principles guiding the policy on grant of floor-wise license.

It has been decided that in case there is a single owner running a factory whose industrial/manufacturing process are carried out on different floors of the factory building, then, he is required to take a single factory license provided the said industrial/manufacturing process being run on various floors of the building is integral to the single factory.

The civic body said in case of a single GST number for the factory whose industrial/manufacturing processes are carried out on different floors of the factory building, then, the factory owner is required to take a single industrial license. The factory/manufacturing activity carried out on different floors must be integral to the declared factory activity in the GST.

In case of a different GST number for a factory running on different floors of the factory building, then, the factory owner shall be required to take factory license in respect of each such GST related factory unit/activity running on different floors.

The MCD further said in case of different owners of the various floors of the factory building, each running their own factory on their respective floors, then, each such owner shall be required to take factory license for each such factory running on different floors.

The above guidelines will be subject to strict compliance of sanctioned building plan, Clause 7.23 of Unified Building Bye-Laws 2016, Fire Safety Rules, Development Control Norms as notified in MPD 2021, DPCC consent and orders and other applicable laws enacted from time to time.

There has been a long pending demand of factory operators for issuance of factory license to actual occupiers/users of industrial plots given under relocation scheme in Narela, Bawana, Badli among others.

The factory operators running factories on such relocation industrial plots occupied on sub-let or tenant basis or through GPA were not granted Factory License as the perpetual lease of industrial plots under relocation scheme did not permit sale, transfer, assignment or parting with the possession of the plot in industrial estates like Narela, Bawana, Narela, Badli, etc. unless consented by DSIIDC/Lease Executing Authority.

The MCD under section 416/417 of DMC Act has decided to grant factory license to such factory operators subject to fulfilling of environment/safety related norms by them through consent to operate/authorization by DPCC and Fire Safety Certificate by Delhi Fire Service, as applicable. The factory license shall, however, stand revoked in the event of closure of the factory by DSIIDC/Lease Executing Authority or DPCC. Further, the factory operators in relocation industrial plots shall have to give an affidavit that no industry is operating at the old place from where relocation was done.

Grant of license to the factory which is running in recognised approved industrial areas will help more than 25,000 factory owners to access finance from banks and avail the benefits of government schemes and programmes.