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• The Chandigarh administration has proposed permitting fragmentation of industrial plots measuring four kanal or more in Industrial Area Phase I and Phase II as part of amendments to the Chandigarh Master Plan (CMP)-2031.
• The move forms part of the administration’s ongoing Deregulation-II exercise aimed at improving industrial land utilisation and supporting business activity.
• Larger industrial plots could be subdivided into smaller units, subject to revised planning approvals, zoning compliance and conditions under a separate fragmentation policy.
• The proposal is expected to improve access to industrial space for MSMEs, startups and service-sector businesses that often find larger plots financially inaccessible.
• The administration is also considering broader industrial reforms, including mixed land use, higher development flexibility and ease-of-doing-business measures.
The Chandigarh administration has proposed allowing the fragmentation of industrial plots measuring four kanal and above in Industrial Area Phase I and Phase II, marking a significant shift from existing planning regulations that prohibit subdivision of industrial land. The proposal has been introduced through an addendum to the proposed amendments to the Chandigarh Master Plan (CMP)-2031 and forms part of the administration’s ongoing Deregulation-II reform programme.
The addendum, approved by the Administrator of the Union Territory, is intended to facilitate more efficient utilisation of industrial land and improve flexibility within Chandigarh’s industrial zones. Under the proposed framework, larger industrial plots would be permitted to be subdivided into smaller units, subject to approval of revised planning and zoning layouts and compliance with conditions that will be specified under a separate policy notification.
At present, Chapter 16 of the CMP-2031 explicitly prohibits fragmentation of industrial plots. The administration has proposed replacing this provision with a revised clause under which fragmentation would be governed by an applicable policy framed by the Chandigarh administration, along with prescribed planning and regulatory approvals.
Officials associated with the urban planning department indicated that the proposed policy could allow a four-kanal industrial plot to be subdivided into multiple smaller units. Preliminary discussions have suggested that such plots may be divided into parcels of at least one kanal each, although the final norms are expected to be specified separately. The administration has stated that the detailed fragmentation policy will be notified after completion of the consultation and approval process.
The proposal is expected to benefit micro, small and medium enterprises (MSMEs), startups and service-sector operators seeking industrial space within Chandigarh. Industry stakeholders have argued that many existing industrial plots are too large and expensive for smaller businesses, resulting in underutilisation of land despite growing demand for compact industrial and commercial workspaces.
Alongside plot fragmentation, the administration is also examining measures aimed at increasing flexibility in industrial land use. Proposed reforms include permitting mixed and multi-use activities such as light manufacturing, trading and service operations within the same premises, subject to planning norms. These measures form part of a broader effort to optimise industrial land use while supporting economic activity in the city.
The fragmentation proposal is one element of a wider reform agenda being pursued by the Chandigarh administration. Recent discussions have also included increasing floor area ratio (FAR), relaxing building regulations, promoting mixed-use development in Industrial Area Phase III and introducing additional ease-of-doing-business measures. Authorities have, however, maintained that industrial plot conversion into retail commercial use remains outside the scope of the current reform programme.
Urban planning officials stated that the proposed amendments are aimed at improving utilisation of existing industrial land while retaining the broader planning framework established under the Chandigarh Master Plan. The administration is expected to review stakeholder feedback before finalising the fragmentation policy and associated regulatory conditions.
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