Update on India’s States: January 15, 2016


This week, the center is collecting ideas from states to boost exports; Gujarat is subsidizing payroll for labor-intensive industries, and also announcing new natural gas subsidies while hiking taxes on petroleum products; Maharashtra will guarantee businesses a timely answer to their applications for permissions; Uttar Pradesh’s Samajwadi Party wins a landslide in local elections; Mamata hosts the second annual Global Bengal Business Summit in West Bengal.

Center-State relations

At the first meeting of the Council for Trade Development and Promotion, the center asked state governments to hold bi-monthly meetings with exporters to address infrastructure and tax-related issues. Input received from states will be considered by the central government as it mulls further steps to reduce exporters’ transaction costs and boost the competitiveness of India’s exports. Source: The Hindu

The Union Home Ministry approved a grant of $153 million for development work in the 35 districts most affected by Naxalite violence. The affected areas include 16 districts in Jharkhand, eight in Chhattisgarh, six in Bihar, two in Odisha, and one each in Maharashtra, Andhra Pradesh, and Telangana. The funds will also be used to improve policing capacity in each district. Source: Economic Times

The Andhra Pradesh government announced it had signed memoranda of understanding (MoUs) with 32 businesses for investments worth around $30 billion that will employ nearly 95,000 people. According to the MoUs, 20 firms will build power plants with a total capacity of more than 17,000 megawatts (MW). The deals were signed on the first day of the state’s three-day Partnership Summit. Source: Economic Times

Government departments in Andhra Pradesh will be able to draw their entire budgetary allocations for 2016-17 on April 1, provided they include blueprints for the projects and development works they propose to execute in the new financial year. Source: The Hindu

The state government has approved $299 million in road works for Scheduled Caste and Scheduled Tribe communities. Source: The Hindu

Delhi’s power distribution companies (discoms) have asked the Central Electricity Regulatory Commission to allow them to terminate their power procurement contracts with state-run companies NTPC Ltd., NHPC Ltd., and THDC India Ltd. The two discoms are looking at cheaper power sources, including power banking arrangements under which they would supply surplus electricity to other states and be allowed to draw on those states’ power supply when in need. Source: Economic Times

The Gujarat government announced a new labor-intensive industry policy under which the state will provide payroll assistance to units in labor-intensive sectors (i.e. the garment, apparel and made-ups, agro- and food-processing, and assembly sectors). Source: Hindu Business Line

The state government is adjusting power prices in the state by raising taxes on petrol and diesel while lowering taxes on piped natural gas (PNG). The per-liter price of petrol and diesel will rise by less than three cents, while PNG will cost more than seven cents less per cubic meter. Source: Economic Times, Economic Times

The center has released $230 million to Karnataka for subsidies for farmers following widespread drought. Crops covering more than seven million acres were damaged during the 2015 monsoon season. Source: The Hindu

The High Level Clearance Committee of the Karnataka government approved projects with a total investment outlay of $3.5 billion, including a 2,000 MW solar park in Tumkur district. Karnataka Solar Power Development Corporation plans to build the park at a cost of $2.2 billion. Source: Hindu Business Line

The Maharashtra cabinet cleared a plan that will forbid board members of co-operative banks involved in irregularities from seeking leadership positions in the banks for ten years. A number of co-operative banks controlled by opposition parties are under investigation for financial irregularities. Source: Economic Times

Maharashtra is close to finalizing a policy that will allow industries and businesses to apply for permissions under the Right to Public Services Act, 2015, and receive an answer from the appropriate regulatory agency within the month. If permission is denied, businesses will be able to appeal to the Maharashtra Industry, Trade, and Investment Facilitation Cell, which will have to approve or reject the policy within two months. Source: Economic Times

Nothing critical to report this week.

The next session of the Tamil Nadu Legislative Assembly will begin on January 20. The session is likely to be the last before elections, scheduled for April or May of this year. Source: Times of India

State-run power plant equipment manufacturer Bharat Heavy Electricals Ltd. (BHEL) has commissioned a 600 MW unit at the Kakatiya Thermal Power Plant. BHEL has commissioned 84 percent of the coal-based power stations in Telangana. Source: Economic Times

The ruling Samajwadi Party (SP) won 60 out of 74 districts in the district panchayat (council) chairman polls. The SP ran unopposed in 36 of the districts. Source: DNA

Following in the footsteps of Delhi, the Uttar Pradesh government has directed district administrators to take measures to bring down air pollution levels. In Meerut, where the district magistrate has already formed a committee to study the issue, airborne particulate matter is twice the permissible levels. Source: Times of India

The central government approved financial assistance to drought-hit Uttar Pradesh of around $200 million, which is $115 million less than the amount requested by the state. Source: Business Standard


Chief Minister Mamata Banerjee told guests at the first ever Global Bengal Business Summit that West Bengal was open for business and that her government would work “as their employee.” Following the Summit, Banerjee announced that the state received proposals worth more than $38 billion, including $17.8 billion in the manufacturing sector. Source: Business Standard, Economic Times

Chief Minister Banerjee blamed violence in West Bengal’s Malda district on the Border Security Force, which she claimed fired on protesters. News reports suggest that a mob of over 100,000 people attacked a police station and a bus. Source: NDTV


Leave a Reply

Your email address will not be published. Required fields are marked *