Update on India’s States: April 26, 2017

States can now borrow ODA directly from lenders for infrastructure projects; Haryana will cut power to areas with high rates of non-payment and exempts solar equipment from tax; Delhi ranks first in internet readiness; Rajasthan experiments with private power distribution; Telangana assists Tripura to improve its business environment; and more.

Goods and Services Tax Tracker: Two states, Telangana and Bihar, have passed their version of the Goods and Services Tax (GST). All 29 states must pass their own version of the law for the tax to become effective nation-wide.

Center–State relations

States and state’s agencies will now be able to directly borrow development assistance in certain cases. The Union Cabinet approved policy guidelines to allowing “financially sound” states to borrow from development assistance banks to pay for vital infrastructure projects. The Mumbai Metropolitan Region Development Authority will act as the test case for the new policy, borrowing $2.3 billion directly from the Japan International Cooperation Agency to pay for the Mumbai Trans-Harbour Link. The center will co-guarantee such loans. Source: Indian Express In Detail: Press Release

State and central government officials assembled in Delhi for the third meeting of NITI Aayog’s governing body, with Prime Minister Narendra Modi presiding. The group discussed a new approach to long-term planning that would give states a greater say in determining national priorities. They also discussed a draft three-year, 300-point action plan to be completed by the end of the 2019-20 fiscal year. Source: LivemintLivemint

Governor Boris A. Dubrovskiy of Russia’s Chelyabinsk region visited Visakhapatnam to explore  partnerships in defense, automobile manufacturing, shipbuilding, and other sectors. Source: The Hindu

South Korean carmaker Kia Motors has decided to open a plant in India after five years of evaluating prospects there. Kia will sign a memorandum of understanding (MoU) with the Andhra Pradesh government later this month; the state has already begun the process of acquiring 600 acres for the plant. Source: Business Standard

Chief Minister Chandrababu Naidu inaugurated “Pariskara Vedika,” a 750-seat call center for citizen services. The center will help residents navigate social welfare programs and also respond to grievances. Residents can interact with the center through phone, SMS, chat, or mobile apps. Source: India Today

Nothing critical to report.

Delhi ranked first in overall Internet readiness according to a survey conducted by the Internet and Mobile Association of India and market research firm Nielsen. The study measured internet readiness on four components: infrastructure, participation, environment for IT firms, and e-governance. Source: Economic Times

Reliance Industries announced the commissioning of its ethane gas plant at the Dahej manufacturing facility. The project, which includes ethane transport, receipt, and handling facilities, was completed in three years. The facility uses ethane imported from the United States. Source: Business Standard

Haryana will exempt solar devices and equipment as well as parts used in the installation of solar power projects from its Value Added Tax. Source: Economic Times

Haryana will pay a 19 cent annual accident insurance premium for all state residents aged 18 to 70. The insurance will be provided under a national insurance scheme which provides payouts of up to $3,100 for accidental death or disabling injury. Source: Times of India

The cabinet approved establishment of the Gurugram Metropolitan Development Authority, a development body for the Gurugram area. The chief minister will serve as chair of the Authority. The cabinet also approved the Gurugram Metropolitan Development Authority (GMDA) Bill, 2017. Source: Indian Express

Haryana’s two power distribution companies (discoms) have decided to correlate power supply hours per day with the transmission and distribution losses of different feeder stations, effectively cutting power for two to eight hours per day in areas where power theft and non-payment of electricity bills are most frequent. The discoms are struggling with total debt of $5.4 billion. Source: Times of India

Karnataka signed an MoU with the civil aviation ministry to join India’s regional air connectivity plan. The scheme covers 19 airports in Karnataka; the state government has agreed to cut sales taxes for the airline industry and provide airlines with free land to expand the airports. Source: Times of India

Madhya Pradesh will provide nearly 18,500 solar-powered water pumps to farmers at subsidised rates under the Madhya Pradesh Chief Minister Solar Pump Scheme. The borewell and surface pumps will be fitted with remote monitoring systems. Source: Times of India

Suzlon Group has won a 100.8 megawatt (MW) order from ReNew Power Ventures for the latter’s Limbwas wind power project in Madhya Pradesh. Suzlon will install 48 wind turbine generators with a capacity of 2.1 MW each. Source: Economic Times

Reliance Industries began commercial production from its coal bed methane block at Sohagpur on March 24. The block is connected to the Indian gas grid through the 187-mile Shahdol-Phulpur gas pipeline. Source: Economic Times

Continuing its winning streak in Maharashtra, the ruling Bharatiya Janata Party (BJP) won control of the Latur and Chandrapur municipal corporations in elections held April 19. Congress won in the Parbhani municipal corporation. Source: Business Standard

Hindustan Petroleum (HPCL) has signed a preliminary pact with the government of Rajasthan to set up a refinery/petrochemical complex at Barmer. Construction is proposed to begin in the current financial year. This is the second time HPCL has signed such an agreement; a change in government in the state resulted in renegotiations of terms. Source: Economic Times

Tata Power has signed a Distribution Franchise Agreement with one of Rajasthan’s discoms to handle electricity distribution in Ajmer. Tata Power formed a special purpose company, TP Ajmer Distribution Ltd., to execute the 20-year contract. Source: Hindu Business Line

The Tamil Nadu government instructed all municipal and Corporation Commissioners to pass resolutions by April 25 taking control of National Highways. The highways will be converted into municipality and corporation-maintained roads. The move was likely a response to a recent Supreme Court order banning the sale of alcohol on national highways. Source: India Today

Nothing critical to report this week.

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has entered into an agreement with the Uttar Pradesh government to provide electricity during the summer. MSEDCL will provide around 700 MW of power at night for the months of April and May at the rate of 6 cents per unit. Source: Indian Express

The state cabinet decided to award government contracts only through ‘e-tendering’. Source: Economic Times

Companies from China’s Shandong province and West Bengal have established six major joint ventures in the past six months. Each project has at least 50 percent investment by the Chinese partners in each project. Source: Times of India

Best of the Rest


Odisha plans to develop a 1,000 MW solar park on a total of 5,000 acres using the public private partnership model. The government has purchased land in six districts and intends to build the park on the cluster model. Odisha is expected to buy at least 20 percent of the power produced, while giving the developers the options to sell the balance outsode the state. Source: Business Standard


The Telangana government will train Tripura government officials to improve Tripura’s ranking in the center’s Ease of Doing Business (EoDB) index, official said. Officials from the Telangana Industries Department will travel to Tripura to mentor state officials there. Source: Economic Times

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