Update on India’s States: August 23, 2017


The center issues new guidelines for metro projects receiving central funding; West Bengal passes a host of industry-friendly legislation; Andhra Pradesh discoms start accepting mobile money; Rajasthan offers farmers a loan interest waiver; and more.

Center–State relations

The central government issued new guidelines for metrorail projects receiving central funding. The guidelines include a requirement that all projects have private participation and present a plan for ‘last mile connectivity’ in a 3-mile radius around each station. Plans will also now be approved using different projections for economic benefit. Central assistance will be in the form of either viability gap funding; a 10 percent block grant; or 50/50 equity sharing. Source: Livemint

The cabinet approved a scheme to refund the central goods and services tax paid by industrial units in special category states (Himachal Pradesh, Uttarakhand, Jammu & Kashmir, and the North-East) until 2027. The refund scheme has budgetary support of $4.26 billion. Source: Press Information Bureau

State-run power transmission utility Power Grid Corp today said it will get a loan of $500 million from the Asian Development Bank (ADB) for its various projects. According to the statement, the proceeds of the loan are proposed to be utilised for funding of Green Energy Corridor (Part D); 800 kilovolt (KV)  High Voltage Direct Current (HVDC) bipole link between Western Region (Raigarh, Chhattisgarh) and Southern Region (Pugalur, Tamil Nadu) and 320 KV HDVC link between Pugalur and North Trichur (Kerala). Source: Economic Times

The Union Environment Ministry gave environmental clearance to a new international airport in Vizianagaram district, with an estimated cost of $352 million. Source: Economic Times

Two state power distribution companies (discoms) have started accepting digital bill payments via BharatQR, becoming some of the first discoms to accept digital payments. BharatQR, launched by the Reserve Bank of India, is an interoperable payment method that accepts payments via all four major payment networks: Visa, Mastercard, RuPay, and American Express. Source: Economic Times


Nothing critical to report this week.


Nothing critical to report this week.


Nothing critical to report this week.


Nothing critical to report this week.


Nothing critical to report this week.


The Bharatiya Janata Party (BJP) won 26 of the 43 local council seats that went to polls in Madhya Pradesh. Recent farmers’ protests, which led to the death of five people, did appear to have an impact on the results, however, with the BJP’s tally falling by three since the last election. Congress won three seats in Mandsaur, the center of the protests. Source: Economic Times

The state government unveiled a loan program to promote entrepreneurship among farmers’ children. The government will act as guarantor for bank loans to children of farmers between $15,570 and $311,450. Borrowers will also enjoy a subsidized interest rate. Source: Indian Express

Chief Minister Shivraj Singh Chouhan announced a 33 percent reservation for women in all state departments except the forest department. Source: Daily News Analysis

Nothing critical to report this week.


The Rajasthan government signed an agreement with Hindustan Petroleum Corporation Limited (HPCL) to set up a joint venture company to build a petroleum refinery/petrochemical complex at Barmer. HPCL will have a 74 percent and the state government a 26 percent stake in the new firm, HPCL Rajasthan Refinery Limited. Source: India Today

The National Bank of Agriculture and Rural Development (NABARD) has approved loan assistance of $210 million to the Rajasthan government for creation of rural infrastructure in the state under the Rural Infrastructure Development Fund. The allotment includes assistance for rural drinking water supply projects, rural roads, and modernization of three irrigation projects. Source: Money control

The state government announced a one-time, waiver of 50 percent of interest on overdue agricultural loans. Source: Hindustan Times


The Tamil Nadu Electricity Regulatory Commission has lowered cross-subsidy surcharges by 2 cents to 3 cents per unit and directed the state’s power utility to reduce power tariffs for industrial and commercial consumers. Source: Economic Times

The Tamil Nadu Generation & Distribution Co (Tangedco) has asked the winners of a solar power capacity auction held in January-February 2017 to reduce tariffs to 5.4 cents per unit, down from the 6.9 cents per unit originally bid, to match the winning bid in a subsequent auction. Tangedco has refused to sign power purchase agreements at the higher tariff. Source: Economic Times

Tamil Nadu approved the rules enacting the central Real Estate (Regulation and Development) Act 2016. The rules require developers to register projects with the regulator before advertising or selling units. Source: Economic Times


The Telangana government announced a new set of incentives for the textile industry under the Telangana Textile and Apparel Incentive Scheme 2017. Incentives include complete GST reimbursement for seven years and a capital subsidy of 25 percent for conventional manufacturing units and 35 percent for high-tech ones. Source: Money control


The state cabinet approved a proposal to allow the Public Works Department (PWD) to borrow $950 million from the central Housing and Urban Development Corporation for infrastructure development projects like upgrading and construction of roads and bridges. The state finance department will act as guarantor. Source: Indian Express


The governing Trinamool Congress (TMC) won majorities all seven local councils that had held elections on August 13, in three cases winning all the seats. The BJP won six seats in total and came in second in most places, making it the primary opposition party. The Left Front one won seat and Congress none. Source: Hindu Business Line

The West Bengal Assembly passed a series of bills with important implications for economic development:

  • The West Bengal Panchayat (Amendment) Bill, 2017, gives village councils authority to grant permits for all construction within their jurisdiction and to levy fees on all commercial permits. Source: Business Standard
  • The West Bengal Land Reforms (Third Amendment) Bill which offers a one-time amnesty for those who have converted land to industrial or institutional use without permission. Source: Millennium Post
  • The West Bengal Single Window System (Management, Control and Miscellaneous Provisions) Bill, 2017 creates a Single Window System for industrial clearances, as well as a new state agency, Silpa Sathi, to run the portal. Source: India Today
  • The West Bengal Housing Industry Regulation Bill 2017 brings into effect the Real Estate (Regulation and Development) Act 2016 in West Bengal and creates the Housing Industry Regulatory Authority to monitor the industry. Source: Business Standard

Best of the Rest

Assam and Manipur

The Union Home Ministry will devolve its power to impose the ‘disturbed areas’ tag on Assam and Manipur, giving the states the power to continue or revoke the Armed Forces (Special Powers) Act (AFSPA). AFSPA grants special powers to the military and can be imposed in places where “the use of armed forces in aid of the civil power is necessary.” Source: The Hindu

Odisha

ICICI Bank, a private bank, signed a Memorandum of Understanding with the Odisha Department of Electronics & Information Technology to provide e-governance services to state residents. This initiative will enable all residents, including those who are not customers of ICICI Bank, to pay their utility bills online using an ICICI Bank payment gateway. Source: India Blooms

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