The number of health trade licences issued in Delhi has surged since the Municipal Corporation of Delhi ( MCD ) eased its norms after the Hauz Rani fire, but a bulk of these have been handed out in areas barred from being issued these licences under the old rules, according to senior municipal officers, a move that experts said turns the onus on establishments to self-regulate and cuts the civic body’s burden on enforcement.
Non-conforming areas, which cover unplanned settlements, are zones where existing land uses, such as industrial units, warehouses or commercial activities, violate the land-use zoning laid down in the Master Plan for Delhi. A commercial unit running in a residential zone is one example. Responding to HT’s query, MCD did not comment on the number of licences issued in non-conforming areas or the numbers under the new regime but attributed the rise in licences numbers to the new FSSAI -linked health trade licence system. Eating establishments alone have seen six fold increase over the corresponding period. Concerns about inadequate checks have been raised since the fire, in which the violator was found to be operating a restaurant under a tea and snacks licence. If they fail to rectify problems, the licence will be withdrawn. “Issuing licences and regulating these trades is an obligatory function of MCD under the Delhi Municipal Corporation Act. Such changes cannot be enforced like this. Secondly, safety has become the victim in all these self-contradicting rules.
The conforming areas under the previous regime included 987 notified commercial streets, 834 mixed land-use streets and market areas. It stated that total applications on health trade licence portal between April and September 15, 2025, were 4,669, with revenue generated worth ₹ 15,08,80,802 The applications over this period in 2026 is 5022 while revenue generated is ₹ 24,13,44,691. Until last year, MCD issued about 13,000 health trades. A second municipal official said Delhi has 10 times as many Food Safety and Standards Authority of India (FSSAI) certificates as health trade licences, and a windfall increase in licences is expected. “We have fewer than 200 inspectors on the ground to check the licences, so field checks cannot be carried out in all cases. If any deficiency is found, the applicant will be given 21 days to respond. In 2011, trades were allowed on mixed land-use streets to provide some relaxation but that too came via DDA.
About two-thirds of the 2,091 licences issued since June 7, when licensing moved to the new regime – around 1,400 units – went to “non-conforming areas”, said a senior municipal official aware of the matter. “The total number of licences has almost doubled as compared to the same cycle in the previous year,” the official said, adding that the change would bring more food businesses under the licensing net and increase the corporation’s revenue. The new licensees are not being inspected for safety at present, a senior civic official said. “Currently, the focus is on bringing more units under the regime,” the official said, requesting anonymity. Under a risk-based criterion, random inspections will be carried out at high-risk places in future, the official said. “Both the number of licenses issued, especially for eating establishments and revenue generated increased in 2026 compared to 2025, which is due to FSSAI factor,” MCD said. We will have to prioritise more risky units,” the official said. The civic body decided to deregulate licensing for 67 types of food-related trades, including restaurants, banquet halls, bakeries and “tea and snacks outlets”, in June, immediately after the Hauz Rani fire that claimed 23 lives. On verification and safety, civic officials said a “risk-based assessment will be carried out, with priority on larger establishments where risks are bigger. Jagdish Mamgain, urban planning expert and former MCD works committee chairman said that MCD cannot directly remove the requirement for non-conforming areas without amending the master plan and building by-laws. MCD is not taking its responsibility and just focusing on revenue,” he said.
The licence confers no legal or ownership right and cannot be used for any other purpose. “The licensee will completely indemnify MCD for any incidence of fire. Fire safety standards are to be taken care of by the licensee. The licensee will be squarely responsible for fire safety of the premises,” the new regime states.
Applicants must agree to 31-point regulations before applying.
The 67 deregulated trades fall under four sub-categories: eating establishments (restaurants, banquet halls, coffee houses, food courts), storage and sale (paan shops, milk products, cold storage), hawking, and manufacturing units. Licences for all of them can now be issued instantly. The policy places the onus of ensuring public safety and property in running the trade on the licensee alone.
For several categories, including restaurants, banquet halls, food carts and cloud kitchens, the FSSAI certificate will be treated as a “deemed licence ” once the licensing fee is paid to the corporation.
