ARTICLE

India’s best-functioning ecosystem —

The Delhi-NCR region
Regardless of the structural challenges posed to the IT sector in India, Delhi NCR offers a dynamic
and highly-functioning ecosystem that sees investors, government policymakers, skilled
professionals and entrepreneurs, and startup incubators and accelerators. These positives
coupled with its expanded territory and excellent connectivity and infrastructure ensures its
steady growth towards becoming India’s top IT hub. — Asia Briefing Ltd. (http://www.india-
briefing.com/news/delhi-ncr-an-emerging-it-hub-in- india-13888.html/)

Tapati Banerjee

he Delhi NCR region is the largest such purposes of the EODB rankings (see box Criteria

T agglomeration in the world comprising

prime business areas of the national
capital region of Delhi, Rajasthan, Uttar
Pradesh, Haryana and spanning over some 33,578
sq. kms. By and large, the region has the best
standards of economic affluence and includes
prime cities of New Delhi, Gurugram, Noida,
Ghaziabad, and Faridabad. Some 17 million people
live here and the region sets the benchmark for
ease of doing business in India. What obtains in
Delhi NCR (and Maharashtra) is what determines
India’s overall ranking. Delhi NCR is thus critical for
for Doing Business evaluation 2018)
Starting a business
It was clear when the World Bank team was in India
in June 2017 that the improvement in all-round
infrastructure was palpable. In terms of starting a
business, Delhi has overtaken Mumbai. The World
Bank’s ranking of economies on the ease of
starting a business is determined by sorting their
distance to frontier scores for starting a business.
These scores are the simple average of the
distance to frontier scores for each of the
component indicators. (See graph on ease of
starting a business)
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Realty was another happy story. Construction
permits and approvals associated with such work
had become easier to secure and the World Bank
team had assessed that “procedures/ steps for
obtaining construction permit in Delhi is now
reduced to only eight from earlier 29 and time taken
for all approvals related to construction projects
has been brought down to 60 days from 213 in
Doing Business captures several important
dimensions of the regulatory environment as it
applies to local rms. It provides quantitative
indicators on regulation for starting a business,
dealing with construction permits, getting
electricity, registering property, getting credit,
protecting minority investors, paying taxes,
trading across borders, enforcing contracts and
resolving insolvency. Doing Business also
measures features of labor market regulation.
Although Doing Business does not present
rankings of economies on the labor market
regulation indicators or include the topic in the
aggregate distance to frontier score or ranking
on the ease of doing business, it does present the
data for these indicators. — Doing Business
2018; Reforming to Create Jobs — A World Bank
Group Flagship report
2016” . Grant of only construction 1 permits saw
average time taken drop three times; from 31.63
days during April-June 2016 to only 10.5 days
during the same period this year, according to
urban development ministry sources.
Moreover, the quality of regulation had been
improved courtesy introduction of latent defect
liability, stipulating qualifications for professionals
and introducing risk based classification of all
buildings enabling fast approvals. The South Delhi
Municipal Corporation presentation on process,
time, quality and cost related improvements with
construction permits in the region featured exactly
what the World Bank was looking for to assign
ranking.
Home building easier
Things were happier for home-builders too. Much
of the regional progress is the result of the
government’s digital push. In the home building
sector, for instance, the record was set by a home
builder; the first beneficiary of the government’s
digitization vision. Prithu Homes received a
completion certificate online from the South Delhi
Municipal Corporation of Delhi. It paid the
prescribed municipal fee online, and submitted all
necessary documents digitally for the completion
certificate on May 19, 2017. The certificate arrived
on June 23, 2017, clearly a result of the Municipal
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Corporation of Delhi’s initiative to bring all citizen-
centric services online a new website,
www.mcdonline.gov.in that was launched in May
2017 . 2
“Our earlier assumption in June was we would
focus on start-up funding deals in Mumbai but
suddenly we realized that about 20 per cent in-
cremental deal flow was coming from Gurgaon,
for both offline and online start-up models. This
shows that Gurgaon has overtaken Mum- bai in
start-ups though Bangalore continues to retain
the top slot” —
Madhukar Sinha, Senior investment manager
with seed fund Aavishkaar — The Hindu
Businessline
24
PURCHASE
Nitin Bansal, managing director of Prithu Homes, a
residential home developer who received the first-
ever digital Completion Certificate to be issued by
SDMC said, “All the paperwork for completion
certificate was done digitally. And finally when the
certificate for four apartments at N-80, Greater
Kailash Part-1 dropped into our email box, to our
delight, it also concluded the process digitally”.
Start-up hub
otherwise, the Delhi-NCR is becoming a start-up
hub, giving Bengaluru a run for its money, having
such successful start-ups as Yatra.com, Snapdeal,
Jabong, Yebhi, Cleartrip, Alacurity, Fashionandyou
and Meritnation and others. This has been made
possible by lower rentals and better infrastructure.
December 2017
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Manmohan Agarwal, founder of fashion portal associated with the government, educational
Yebhi.com, says: “Gurugram has lots of space, institutions, and venture capitalists. At present, it is
thus making it good for warehousing purpose. home to almost 23 per cent of India’s startups,
Besides, most online retailers need good air which include Grofers, Paytm, and Snapdeal.
connectivity for delivery of goods” which the
region provides, making it worthwhile for online
retailers to start their business in the region as
northern India is the main sourcing hub for the
country. About 60-70
per cent of raw material is sourced from the
manufacturing units present in the region and the
major distributors operate out of here". Given the
trading background of the regional entrepreneurs
the emerging ecosystem has attracted venture
capital and seed funds to the region. Nitesh Bhasin,
Managing Director (Delhi-NCR), Jones Lang
LaSalle, told the Hindu Businessline that several Cost and convenience hold the key and electricity
developers are constructing IT parks and SEZs to connections have helped Delhi get improved
boost infrastructure and other facilities for these ratings. World Bank “Ease of doing business”
firms contributing to the start-up ecosystem. initiative ranks countries on the basis of ten

Recent Gurugram based start-ups include
Dogspot.in, Mapmytalent.com and offline start-
ups such as The App Kiosk among others, many of
which are still at their nascent stages.
Madhukar Sinha of Aavishkaar says: “While the
success rate of these new start-ups remains to be
seen, the fact that there is lot of interest and
activity, coupled with several incubators coming up
across India to streamline their business models
and develop an ecosystem, augurs well for this
sector. This is just the starting point for start-up
boom and it is far from getting saturated
guaranteeing growth potential in this segment
going forward,” he added.
Asia Briefing says: There are currently more than
4,100 start-up enterprises in India and industry
experts note that the number of start-ups is
expected to rise to 11,500 by 2020. Out of the total
$1.8 billion raised by Indian startups in 2016, more
than half of it was invested in the Delhi NCR region.
This is because it provides firms with easy access
to foreign investors, government agencies, and
early stages funding that are vital for any new
venture’s success. There are several startup
incubators and accelerators in the region
parameters. ‘Getting Electricity’ is the one of these
parameters. For ‘Getting Electricity’, World Bank
measures the performance on 4 criteria: (i) Number
of procedures; (ii) time for obtaining a commercial
electricity connection; (iii) Cost for obtaining a
commercial electricity connection up to 140 KVA;
and, (iv) Reliability of power supply. The
government of India release says: “On Getting
Electricity, the report recognized the efforts of Tata
Power in Delhi to make it faster and cheaper to
obtain an electricity connection. These efforts,
combined with efforts in Mumbai last year, have
allowed India to improve its rank on this indicator
from 137 in Doing Business 2015 to 26 in this year’s
report, a 111 rank improvement”.
According to the government, the World Bank has
also:
• Recognized the establishment of Commercial
Divisions within the High Courts in Delhi and
Mumbai to deal with commercial cases above Rs. 1
crore. This has allowed India to improve its rank by
14 places in 2 years.
• In the area of Trading Across Borders, the report
recognized the implementation of the Single
Window Interface for Trade (ICEGATE), which
integrates approvals and risk-based frameworks of
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customs and nine departments to provide traders
with a single online interface for import clearances.
• On Paying Taxes, the report recognized online
filing and payment of returns at the Employee’s
Social Insurance Corporation.
From courts to corporations, convenience and
costs hold the key and places like Gurugram provide
the best deals responding to the growing demand
for excellence. “Owing to the IT boom, Gurgaon
offers a ready target group of young professionals
staying away from their families and in need of
services that are supplied by start-ups. Moreover,
the operational cost including rentals and salaries is
higher by 40 per cent in Mumbai, which is a huge
cost for a small start-up that needs to minimize its
cost and maximise revenue”, says Neha Jain,
Founder, FlyByKnight.
IT +
IT is another sector that sets the trend and the
region has given an excellent account of itself with
people skills that have helped Delhi NCR become
one of the fastest growing economic regions of
India, accounting for seven to eight per cent of the
nation’s GDP. “Its proximity to government
institutions, the presence of a business friendly
infrastructure, and a burgeoning entrepreneurship
culture make the city a viable IT hub. Consequently,
several companies have set up their delivery
centres and liaison offices in Noida, Delhi and
Gurugram in order to take advantage of the high
quality infrastructure, manpower, real estate, and
supportive government policies”, says Asia
Briefing. It talks of a 3-point success indicator:
regional connectivity, skilled workforce and the
start- up successes.
The Delhi NCR region is an extremely well
connected; it has amongst the busiest international
airports in the world – Indira Gandhi International
Airport, with an excellent network of railways,
roadways, and metro rail and good connectivity to
the satellite cities of Gurugram and Noida via the
Delhi Gurugram expressway and the DND flyover,
respectively. The enhanced inter-state connectivity
enables easy accessibility to a diverse labor pool
and market from its neighbouring states, says Asia
Briefing.
Premier educational institutions such as the Indian
Institute of Technology (IIT), Delhi; Jawaharlal
Nehru University (JNU), Delhi Technological
University (DTU), and University of Delhi (DU),
among others, has ensured a steady supply of
educated and skilled workforce, from all over the
country that are essential for not just for the growth
of the IT industry but other industries as well.
With India keen on improving its rankings for 2018
to get into the top 50 of the EODB rankings, there is
a 10-point agenda that Delhi must follow.
Importantly, transformative reforms like the
Insolvency and Bankruptcy Code and GST can
serve as launching pads for India to drastically
improve its ranking in future reports . Indeed, how
Delhi and Mumbai handle these parameters of
performance is key to the improved rankings:
1. Implement the Insolvency and Bankruptcy Code
by notifying regulations and institutionalizing
proceedings at the National Company Law
Tribunals.
2. Effectively implementing GST.
3. Implementing a single form for company
incorporation, name availability and director’s
identification number and making it mandatory.
4. Merging registries of charges at MCA and
CERSAI into a single registry to build a unified
online data base of security interests over movable
assets.
5. Further streamlining processes related to
customs clearances to bring about faster and
cheaper processing time including increase in
direct delivery of goods and integrate clearances/
NoCs of all agencies for both export and import.
6. Introducing paper less court procedures and
systems including e-filing, e-payment, e-summons
and downloading of electronically signed orders in
commercial courts.
7. Making colour coded maps of Airports Authority
of India, Delhi Urban Arts Commission, Delhi Metro
Rail Corporation and Archaeological Survey of India
GIS enabled and integrate them with the Single
Window System of Municipal Corporation of Delhi.
8. Allowing online filing of application, scheduling
of appointment and payment of fees for
registering properties.
9. Digitizing all encumbrances and record of rights
of lands for last 30 years and make them
available online.
10. Integrating land records with sale deeds at Sub-
Registrar offices. The agenda is set. It is action time
now.