Update on India’s States: December 22, 2015


This week: states will be allowed to mine their own coal; Mumbai is causing trouble for high-speed rail; Rajasthan is restructuring its power utilities; Rajasthan will present SEB restructuring plan in its state assembly; the CAG questions Rajasthan’s policies to encourage solar power; Uttar Pradesh has signed on to a centrally-sponsored program to improve power distribution, and may allow Dalits to sell land to non-Dalits soon; West Bengal is expanding food subsidies.

Center-State relations

The Urban Development Ministry received 85 of an expected 98 smart city proposals by the December 15 deadline. Only Tamil Nadu, which requested an extension due to heavy flooding, and Telangana, which sought to replace Hyderabad with another city, failed to submit proposals on time. The 85 Smart City plans would cost $37.7 billion to execute. Source: Economic Times

Ending the 41-year-old monopoly of the central government over mining and sale of coal, the Cabinet Committee of Economic Affairs (CCEA) approved a proposal allowing states to operate coal mines for the purposes of commercial sale to medium and small industries in the state. Source: Business Standard

The government unveiled plans to build 16 expressways in relatively underdeveloped regions of the country. The 16 projects include Vadodara-Mumbai, Jaipur-Ajmer-Ahmedabad and Amravati-Hyderabad-Bengaluru roads. Several of the highways were announced during previous administrations, but the government has added nine more to the list. Source: Economic Times

The central government is open to dropping the 1% origin-based tax on inter-state sale of goods—a major point of dispute between the government and the parliamentary opposition—and is willing to allow the Goods and Services Tax (GST) Council to decide on a dispute resolution mechanism. With three working days remaining in the Winter Session of Parliament, the Rajya Sabha has not yet voted on the Goods and Services Tax (GST) Amendment. Business Standard, Financial Express

The Union government plans to spend $2.9 billion this fiscal year to improve basic infrastructure hundreds of cities under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). According to city-level action plans approved by the Urban Development Ministry, 90 percent of the expenditure will be on improving water supply and sewage infrastructure. Source: Economic Times

Chief Minister Chandrababu Naidu released a report that showed agricultural and related sectors powering Andhra Pradesh’s economy in the second quarter of the fiscal year. Agriculture, including fishing, horticulture, and livestock, grew 47.10 percent. The industry and service sectors grew only 6.25 and 8 percent, respectively—down from the previous quarter, when they grew 7.2 and 10.2 percent. Source: The Hindu

The National Highways Authority has found a new investor to complete the construction of a $260 million highway project between Vijayawada and Gundugolanu in Andhra Pradesh. Brookfield India Holding has agreed to take over the project with a new equity investment of $100 million.  Source: Economic Times

The Andhra Pradesh government signed an MoU with Malaysia’s Performance Management and Delivery Unit (PEMANDU) to conduct performance management and monitoring of public programs, education, and retail services.  PEMANDU has already partnered with Niti Aayog to roll out impactful public sector initiatives at the national and state level. Source: Economic Times

The Delhi Assembly will meet for a single day on December 22 to discuss recent events related to allegations of corruption at the Delhi & District Cricket Association (DDCA). The Central Bureau of Investigation last week raided the office of Delhi chief minister Arvind Kejriwal as part of an investigation into the activities of one of Delhi’s top civil servants. Source: Economic Times

The Supreme Court imposed a ban on the registration of diesel cars with an engine capacity of over 2,000 cubic centimeters (cc) in New Delhi and other areas of the National Capital Region (NCR), such as Gurgaon, Noida and Faridabad. The Court also set an April 1 deadline for Delhi’s government and civic agencies to take a host of measures to curb pollution, including repairing dilapidated pavements and constructing new ones where they don’t exist, cleaning streets, and stopping the incineration of bio-waste. Source: Economic Times, Business Standard


The Gujarat government will pay cotton farmers a bonus of $1.50 beyond the federally-set minimum support price (MSP) of $12.35 per 44 lbs. Gujarat’s cotton farmers have complained that the MSP is too low given that cotton prices have crashed on the global market. Source: The Hindu

Pakistan’s Marine Security Agency apprehended 70 fishermen from the Saurashtra region off the Gujarat coast. The Gujarat fishermen’s association also reported that Pakistan had fired on a boat of Indian fishermen off the Jakhau coast in northwest Gujarat. Source: The Hindu


Karnataka is linking all State government departments through a shared network and providing them with access to the network built for India’s unique identification number, known as Aadhaar. Source: Hindu Business Line

The Union ministry for urban development has approved $189 million in infrastructure development for Karnataka’s cities under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme. Twenty-seven cities in Karnataka, including Bangalore and Mysore, will receive improvements to the water supply, sewage system, and urban transport.

Source: The Hindu

Bangalore and San Francisco have signed a sister city agreement and will work to foster closer cultural bonds by collaborating on public art projects, promoting women entrepreneurs, and creating cleaner public spaces. Source: Mint


Ten of Maharashtra’s municipal corporations are unanimously opposing tax increases or the imposition of new taxes to finance development under the smart city scheme and are also opposing any dilution of their powers in order to build special status zones in each city. The civic bodies have proposed to raise the funds through increases in building density. Source: Business Standard

The $13.5 billion Mumbai-Ahmedabad bullet train project has hit a hurdle as the Maharashtra government has categorically ruled out providing land in the commercial district of Bandra-Kurla Complex for the proposed terminal. The government has instead asked the rail ministry to consider land it already owns in other areas of the city. Maharashtra’s chief minister said that the Mumbai Metropolitan Region Development Authority cannot afford to lose the revenues that would come from selling the land to commercial clients. Source: Business Standard

Maharashtra chief minister Devendra Fadnavis informed the Assembly that the government will not issue a notification to reinstate 5% reservation in educational institutes for backward castes in Muslim community, since no legal framework exists to support it. The chief minister’s remark came after the State’s Minority Affairs minister Eknath Khadse had assured the House that the government was positive on reservation demands of Muslim community. A year ago, the BJP-led State government had issued an ordinance ensuring reservations for both Maratha and Muslim communities in educational institutes and jobs. Source: The Hindu

Maharashtra announced a $1.56 billion relief package for more than 15,000 drought-hit villages in the Marathwada and Vidarbha regions. More than two-thirds of the funds will go towards direct financial assistance to cotton and soybean farmers in Vidarbha and Marathwada. The remaining will be used as grants for various long-term welfare projects. Source: Mint


The Rajasthan government will present legislation for the financial restructuring of power companies in the next Assembly session. Chief Minister Vasundhara Raje will also issue an ordinance so that restructuring can begin even before the Rajasthan Electricity Distribution Management Responsibility Bill is introduced in the next session of the Assembly. Source: The Hindu

The Comptroller and Auditor General of India (CAG) has raised questions regarding the allotment of land to six solar companies for setting up solar thermal power plants in the Jodhpur and Jaisalmer areas. According to the CAG report, Rajasthan gave preferential treatment to private developers, allocating government land at below-normal rates and changing the land’s status. Source: Hindustan Times

Chief Minister Vasundhara Raje cleared investment proposals worth $307 million in a recent cabinet meeting. Among the proposals cleared by the state cabinet is a manufacturing unit for Galaxy Shoppe Private Limited in Udaipur and a hospital in Chitrakoot. Source: Times of India


Severe flooding has resulted in losses for around 14,000 micro, small and medium enterprises (MSMEs) in Tamil Nadu. Union minister for MSME Kalraj Mishra said that the major issues that need to be addressed are easy access to credit and the possible restructuring of existing loans. Source: Business Standard

The Tamil Nadu Government sought the Center’s intervention to secure the release of 41 fishermen detained in Sri Lanka. Source: Huffington Post

The Ministry of Environment and Forests has given the green light to a power project in Telangana by the state-owned National Thermal Power Corporation (NTPC). The NTPC is planning to expand a coal-based 2,600 megawatt (MW) thermal power station in Telangana’s Karimnagar district by adding 1,600 MW of capacity and also plans to build an entirely new station to provide an additional 2,400 MW. Source: Economic Times

Telangana chief minister K. Chandrasekhar Rao has asked the central government to replace Hyderabad with Karimnagar in the Smart City scheme. Source: The Hindu


Uttar Pradesh is introducing a new Police Emergency Response System that will allow for a single state-wide emergency number. The system is expected to come online within a year. Source: Economic Times

Uttar Pradesh has formally joined the Center’s ‘UDAY’ scheme for reviving debt-laden public power distribution companies (discoms).  Under the voluntary scheme, states will be allowed to back bonds for discom debt and use the savings generated by lower interest rates to improve their power distribution systems. Source: Economic Times

Chief Minister Akhilesh Yadav laid the foundation stone for a 660 MW unit at the thermal power plant at Harduaganj, Qasimpur being built by Japanese firm Toshiba. The new power plant is set to provide electricity to rural as well as urban areas by 2019. Source: Times of India

Uttar Pradesh governor Ram Naik gave his assent to the controversial UP Revenue Code (Amendment) Ordinance 2015, allowing it to move forward to a vote in the legislative assembly. The bill reforms Uttar Pradesh’s laws concerning the sale of land; among other changes, it allows Dalits to sell land to non-Dalits. The current law forbids Dalits to sell land to non-Dalits when they own less than 3.5 acres. Source: Economic Times


West Bengal chief minister Mamata Banerjee has announced that her government will bring 17 million more people in the state under a food security scheme. Banerjee said her government would supply subsidised food grains to 17 million people not currently enrolled in the National Food Security Act (NFSA). The program will cost the state nearly $1.2 billion. Source: Deccan Herald

Opposition parties protested and staged a walk-out in the West Bengal Legislative Assembly over what they portrayed as “political intolerance” by the governing Trinamool Congress. Source: Economic Times

West Bengal is expanding an existing program designed to encourage the development of agricultural cooperatives in the state. Under the scheme, small “self-help” groups are given training in producing cash crops as well as an initial loan of $1,900. Source: Economic Times


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