Delhi Drops Police Approval for Hospitality Businesses: How Will It Impact The Industry?

Delhi’s decision to drop police from the licensing requirement may have been prompted by staff shortages, but for the hotel industry, long weighed down by high entry barriers, it’s a much-needed step toward easier business.

Hotels/motels/guesthouses, restaurants, discotheques, amusement parks, and other establishments in Delhi will no longer need No-Objection Certificates (NOCs) from Delhi Police.

According to a new order from Lieutenant Governor VK Saxena, seven categories of trades in the Capital have been removed from the Delhi Police licensing system. These include: hotels/motels/guest houses, restaurants or eating houses, swimming pools, discotheques, video game parlours, amusement parks, and auditoriums.

Delhi Chief Minister Rekha Gupta said the licensing responsibility for these trades will now lie with municipal bodies and relevant departments. Civic agencies such as the Municipal Corporation of Delhi, New Delhi Municipal Council, and Delhi Cantonment Board already have policies in place to regulate these businesses. The extra layer of police licensing is being removed to ease the burden on the force and let it focus on core policing duties.

Industry Welcomes the Move: The hospitality industry has long complained about the multiple approvals needed to start or run a business. K Syama Raju, president of the Federation of Hotel & Restaurant Associations of India (FHRAI), called the change a welcome step toward reducing red tape.

"For the hospitality industry, which is still recovering from the disruptions of recent years, such a reduction in compliance burden will go a long way in encouraging entrepreneurship and boosting investor confidence," Raju said. He also expressed hope that other states would follow Delhi’s lead and reform what he called “archaic” licensing systems.

Last year, Hyatt Hotels CEO Mark Hoplamazian had