New Delhi: In a landmark move to simplify industrial regulations and reduce bureaucratic hurdles, the Delhi Government has scrapped the requirement for a separate factory license from the Municipal Corporation of Delhi (MCD) for units operating in recognised industrial areas.
Effective immediately, factories located in industrial zones developed or recognised by the Government of NCT of Delhi (GNCTD) or the Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) will no longer need to obtain a separate license from the MCD. Instead, a valid MSME Udyam Registration Certificate or an allotment letter/lease deed from GNCTD/DSIIDC will be treated as the factory license under Sections 416 and 417 of the Delhi Municipal Corporation (DMC) Act, 1957.
“This decision will significantly promote Ease of Living and Ease of Doing Business in Delhi,” a senior official
said, adding that the change will reduce redundant compliance and improve transparency.
The order stated, “The industrial areas established/recognised by GNCTD/DSIIDC are, by their very purpose, meant for industrial activities… Issuing of an independent permission/licence by Factory Licensing Department, MCD… is an additional redundant compliance burden.”
The reform also addresses environmental and fire safety concerns by leaving enforcement to respective agencies like the Delhi Pollution Control Committee and the Delhi Fire Service. Additionally, the government has removed the license fee based on horsepower usage, calling it “a distortion that promotes under-reporting and penalises mechanisation.”
Under the new rules, factory owners will need to upload their MSME certificate or lease deed on the Property Tax portal, pay a nominal fee, set at 5% of the property tax, and download a payment receipt, which will serve as the deemed license.
A declaration of legal responsibility for safety and compliance will be part of this receipt. “No separate factory licence will thus be issued,” the order confirmed.
Existing licenses will remain valid until their expiry.