Manufacturing Travails: Experience of Running EnNatura

We run EnNatura, a green chemicals company, which is a R&D spin-off from IIT Delhi. We manufacture zero-odour & food-grade printing inks for applications in commercial printing & packaging.

  We operate a manufacturing unit in Gurukul Industrial Area, near Badarpur, on the border of Delhi & Faridabad for past 3 years. We have had first hand experience of the dismal state of manufacturing infrastructure in the National Capital Region. 

The industrial area houses factories of biggies like Escorts, Bharat Gears, Plasser India et, al. This is 30 minutes drive from South Delhi and near to Railway track and Delhi - Mathura highway. This is required for easier material transport from in & out of Industrial Area.

But what ails this industrial area is the last mile connectivity & lack of industrial infrastructure. 

Infrastructural Travails

Once you enter the area, the decrepit condition of roads make you realize why Industrialists in Delhi buy SUVs. Water-logging & improper effluent discharge on roads is common place. Their is no common effluent treatment plant for the SSIs operating in the area. Electric power cuts and transformer faults are common and become severe in summers. The industrial production is backed-up on diesel generators. Touts, masquerading as babus from Municipal Corporation of Faridabad extort money on an yearly basis in the name of 'MCF license'.

Taxation Mess hinders Growth

Indian taxation system is byzantine. If one operates a production unit in Faridabad & has customers in Delhi, UP& Haryana, he will be in spending a significant amount of his time on taxation & compliance in all three states. Managing DVAT, Haryana VAT, CST, excise, Income Tax filings require some serious legal skills. For a large business, it may be manageable but for a SSI, with limited resources, proper filings are expensive & tedious. No wonder SSIs evade tax and operate on cash. This hinders growth as most SSIs will want to remain geographically limited to avoid regulatory head-aches and have limited access to capital to finance losses associated with geographical growth.

Need of the Hour is simplification of taxation regime and better industrial infrastructure. If this is the situation of industrial areas in NCR, one wonders what would be the situation in lesser developed parts of the country. 

I can understand why there are so few industrial start-ups from technology institutes in India. Apart from the obvious risks associated with the start-up, the regulatory & infrastructural issues create further roadblocks to starting up.

But no country has 'developed' without industrialization, be it US, UK, Germany, France or China. If India has to 'develop', its leaders have to create manufacturing friendly policies & invest in industrial infrastructure.