Update on India’s States: January 6, 2016


This week, the center approved a massive increase in the budget for rooftop solar; Gujarat’s new labor law came into effect; major new highways were approved for Telangana and Uttar Pradesh; West Bengal plans to make 100,000 acres of land available for industrial development.

Center-State relations

The central railways ministry will form joint ventures (JVs) with states to speed the completion of rail projects. The JVs will enable the center to mobilize increased resources for railway infrastructure. Source: Economic Times

The Cabinet Committee on Economic Affairs has approved an increase in the budget for implementation of grid-connected solar rooftop systems from the current $90.65 million to $755 million by 2019-20. Source: Economic Times

The Andhra Pradesh government has signed a Memorandum of Understanding with Japan’s Toyama prefecture. Chief Minister N. Chandrababu Naidu and Governor Takakazu Ishii agreed to cooperate in the economic, academic, tourism, and cultural sectors. Naidu particularly requested investment in the state’s pharmaceutical sector. Source: Business Standard

Union minister for power, Piyush Goyal, has agreed to support a $1.13 billion scheme to replace 1.5 million agricultural pumps in Andhra Pradesh with energy efficient pump sets, free of cost. Source: The Hindu

The Ministry of Civil Aviation has approved the location of a proposed international airport at Bhogapuram in Vizianagaram district. The airport, which is fiercely opposed by local residents, has already received the necessary clearances from the defense ministry. Source: The Hindu

The central environment ministry directed the state governments of Delhi, Rajasthan, Haryana, and Uttar Pradesh to control air pollution and improve the air quality in Delhi and the surrounding region. Union environment minister Prakash Javadekar gave the states 90 days to comply with regulations regarding vehicular emissions, road dust, and mass burning and industrial air pollution. Source: Economic Times


The Gujarat government is demanding compensation to replace the revenue the state is likely to lose when the goods & service tax (GST) regime comes into force. A report prepared by the Gujarat commercial tax department found that if the GST regime is implemented, Gujarat will lose at least $1.63 billion per annum beginning in fiscal year 2016-17. Source: Times of India

The Gujarat government will soon announce a new medical policy that includes subsidies for building new hospitals and nursing homes and is aimed at encouraging medical education and medical tourism in the state. The amount of a subsidy will depend on the location and size of the hospital. Source: Economic Times

Gujarat’s new labor law came into effect on December 30. The new law allows for government mediation in the case of labor disputes, requires employees to be paid by check rather than cash, and increases the inspection requirements for industrial units with more than 50 employees. Source: Economic Times

The ruling Congress Party won 13 of the 25 Legislative Council seats that were up for election on December 27—two short of the 15 seats that would have given Congress control of the Council, or Vidhan Parishad. The Bharatiya Janata Party (BJP) bagged six seats, the Janata Dal (Secular) (JD(S)) party four seats, and independents two seats. Congress will have to rely on the support of the independents and the JD(S) to push through legislation in the 75-member Council. Source: Indian Express

A recent study by the Associated Chambers of Commerce and Industry of India found that Maharashtra was India’s most popular investment destination in 2014. Maharashtra received 10 percent of the total investment promised as of December 2014 (over $227 billion), followed by Gujarat (9.2 percent), Odisha (7.5 percent), Karnataka (6.8 percent), and Tamil Nadu (6.5 percent). Source: Hindu Business Line

Maharashtra is likely to become the first state in the country to exempt electric vehicles from value-added tax, road taxes, and registration fees. The proposal comes from Union power minister Piyush Goyal, who said the state government had agreed and would soon make an announcement. Source: Financial Express

Maharashtra’s senior bureaucrats will be required to visit field offices on the first and third Friday and Saturday of every month to monitor implementation of government policies. Source: Economic Times

Congress won three seats, Shiv Sena two seats, and the National Congress Party, BJP, and an independent one seat each in Maharashtra Legislative Council elections. 15 candidates contested seven seats in the indirect elections to Maharashtra’s upper house of parliament. Only local elected officials were eligible to vote. Source: Economic Times

Nothing critical to report this week.

Tamil Nadu chief minister Jayalalithaa Jayaram formally inaugurated several water management schemes, including an integrated drinking water project and stormwater drainage in Chennai. The projects, with a total cost of 393 million, follow last month’s catastrophic flooding, which exposed the weakness of Chennai’s infrastructure. Source: Economic Times

The Tamil Nadu government has submitted its Smart City plans for 12 cities: Tiruchirapalli, Tirunelveli, Dindigul, Thanjavur, Tirupur, Salem, Vellore, Coimbatore, Madurai, Erode, Thoothukudi, and Chennai. Source: Economic Times

The Telangana government is planning to build multi-level flyovers at 54 junctions in Hyderabad, at an estimated cost of $3 billion. The foundation stone for the first phase of the project, which is meant to reduce traffic in the capital, was laid at the entrance of the KBR Park. Source: Sakshipost

A central assessment unit has estimated crop loss due to drought conditions in Telangana at more than $450 million. Source: New Indian Express

The ruling Telangana Rashtra Samithi (TRS) party won four seats and Congress won two seats in elections to the Telangana Legislative Council. TRS now has 29 seats in the 40-member Council. Only local elected officials were eligible to vote in the indirect elections. Source: The Hindu

The central government approved construction of a 65-mile, four-lane outer ring road in Lucknow at a cost of $755 million. Union home minister Rajnath Singh had promised to build the road in his 2014 Lok Sabha campaign. Source: Financial Express

Union transport minister Nitin Gadkari announced that the central government plans to begin work on more than $8 billion of road infrastructure in Uttar Pradesh in the coming year. Prime Minister Narendra Modi laid the foundation stone for the $1.1 billion Delhi-Meerut Expressway, which is scheduled to take two and a half years to build. Source: Hindu Business Line

The Uttar Pradesh government will host a three-day summit of non-resident Indians with roots in Uttar Pradesh beginning January 4 in Agra. The state hopes to forge better ties with its diaspora as well as attract investments for infrastructure projects, particularly in the energy sector. Source: The Hindu
West Bengal plans to open up to industrial development over 100,000 acres of land currently controlled by various government departments. Amit Mitra, state finance minister, said that the state also has another 4,400 acres of land that is already equipped with industrial parks. Source: Business Standard

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