Update on India’s States : February 11, 2016


This week: states are threatening to hold the GST hostage; Maharashtra makes it easier for employers to hire contract employees; four heads of state in Mumbai for “Make in India” week; Rajasthan passes the first test of its liberalized labor laws; Jayalalithaa wants to block Kerala-Karnataka pipeline that crosses into Tamil Nadu; Uttar Pradesh gets a new, simplified, tax code.

Center-State relations

At a pre-budget meeting with Finance Minister Arun Jaitley, state Chief Ministers demanded that the Center pay all funds currently due to the states under the Central Sales Tax scheme, before instituting the Goods and Services Tax (GST). They also argued that states should receive more money from the central exchequer in the upcoming budget while the Union government’s share of funding for centrally-sponsored schemes remains the same. Source: Business Standard

The Union Cabinet will allow Indian Railways to form Joint Ventures (JVs) with state governments to mobilize resources for speedy implementation of rail projects. JVs will be responsible for identifying and monitoring projects, acquiring land, and possibly providing financing. Source: Economic Times

Over a thousand delegates, including heads of state of four countries, will attend the ‘Make in India’ expo in Mumbai this month. Top ministers and top ministers of 12 Indian states and 13 Union ministers, including the prime minister and finance minister, will also attend. Source: Indian Express


Ostro Energy Private Limited plans to build energy projects worth $425 million in Andhra Pradesh, including two wind farms with a total capacity of 197.4 megawatts. The International Finance Corporation will contribute funding. Source: Business Standard


Chinese technology company ZTE has inked a pact with the Andhra Pradesh government to work on various technology projects in the state, including smart city development and e-governance. Source: Hindu Business Line



Nothing critical to report.



 The Gujarat government will build the country’s first aviation park outside Ahmedabad. The park will have a flight training school and workshops for small manufacturers. Source: Economic Times



Karnataka gave initial approval to 147 investment proposals worth $19.6 billion during the Invest Karnataka event. In order to ensure that the interest shown by investors turns into actual investments, Karnataka has appointed an official to follow up on all projects worth more than $30 million and aims to have all projects approved by the relevant committees by May 15. Source: Business Standard


Three vacant Legislative Assembly seats will be filled in by-elections on February 13. Two of the seats were previously held by the BJP, while the third was held by a Congress MLA. Source: Economic Times




The Maharashtra government will now allow employers to hire as many as 50 contract employees without seeking permission from the state’s Labor Commissioner. Employers previously could not hire more than 20 contract employees without the permission of the Labor Commissioner and other associated clearances. Source: Economic Times




Two companies in Rajasthan became the first to test the provisions of the state’s amended labor laws by shutting down their units and firing around 100 employees without prior permission from the state government. The amended Industrial Disputes Act allows companies to retrench up to 300 employees without prior permission of the government and makes it more difficult for workers to create unions. Source: Business Standard


The Rajasthan government held a one-day start-up fest at Udaipur to advertise its new start-up policy. 100 start-ups, 30 start-up mentors and 15 venture capital investors participated in the event. Source: The Hindu



The Tamil Nadu government will present the interim budget on February 16 during a three to four day assembly session. Legislative Assembly elections will take place by May. Source: Times of India

Tamil Nadu chief minister Jayalalithaa asked Prime Minister Modi to cancel a planned natural gas pipeline that would cross the state on its way from Kerala to Bangalore. The project is opposed by small farmers in the state, who fear that it will render their land unfit for agricultural use. Source: The Hindu

The ruling Telangana Rashtra Samithi (TRS) won a clear victory in elections to the Greater Hyderabad Municipal Corporation on February 2, winning over 100 of 150 wards. Hyderabad’s urban areas had previously supported the opposition Telugu Desam Party and BJP candidates in the 2014 Assembly elections. Source: Hindu Business Line


Cognizant Technologies Services has sought government approval to set up a special economic zone (SEZ) focusing on IT services in the Ranga Reddy district of Telangana. The Board of Approval will consider the application at its meeting on February 23. Source: Economic Times


Telangana and Canada’s Ontario Province and signed memorandums of understanding (MoUs) in the areas of education, infrastructure, IT, and research during a visit to Hyderabad by Kathleen Wynne, premier of Ontario. Source: Hindu Business Line



Uttar Pradesh’s new revenue code will come into effect February 11. The new code is designed to make paying taxes simpler by abolishing old laws relating to land revenue and land reforms and facilitating dispute resolution. Source: Economic Times

Facebook is launching its ‘boost your business’ initiative in five districts of Uttar Pradesh. Facebook employees will train small and medium entrepreneurs to improve their services and marketing, and to expand their customer base. The program will visit Kannauj, Kanpur, Varanasi, Allahabad, and Lucknow between February 11 and March 11. Source: Economic Times

Microsoft is offering micro, small and medium enterprises (MSMEs) in Uttar Pradesh cloud-based technology services under a new initiative specifically aimed the sector. Uttar Pradesh has the largest number of registered MSMEs in India. Source: Business Standard

After much controversy and a delay of nearly two years, Governor Ram Naik swore in Justice Sanjay Mishra as the state’s new Lokayukta (anti-corruption ombudsman). Chief Minister Akhilesh Yadav had clashed with the governor and the chief justice of the UP high court over the appointment. Source: Economic Times


The 4th State Finance Commission, West Bengal, submitted its report and recommendations to the state government. The Chairman of the Commission told reporters that the revenue growth during the tenure of the Trinamool Congress government was 2.2 percent, compared to 1.7 percent under the Left Front government. Source: Business Standard


1 comment for “Update on India’s States : February 11, 2016

  1. February 12, 2016 at 06:54

    Pl send me regular copies of the newsletter on states of India. Good summary capturing the macro trends. Good show Richard. When are you next in Delhi? We must meet up. Best. Rakesh

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