Update on India’s States: March 29, 2017

Bihar announces a major electricity tariff hike; Tamil Nadu extends the standard length of development permits; Maharashtra opens an intellectual property crimes unit to tackle online piracy; wind power in trouble in Andhra Pradesh and Gujarat; Himachal Pradesh runs out of money; and more.

Center-State relations

Nothing critical to report this week.

Chinese smartphone-maker Xiaomi announced its second manufacturing unit in Andhra Pradesh, in partnership with Taiwanese electronics major Foxconn. More than 95 percent of Xiaomi smartphones sold in India will now be manufactured in the country. Source: India Today

Andhra Pradesh has refused to sign power purchase agreements for wind power with tariffs higher than that reached at India’s first ever wind power auction. The state’s power regulator had set wind tariffs at over 7 cents per kilowatt hour (kWh), but the auction, completed in February, produced a tariff of 5 cents per kWh. Source: Economic Times

The Union Ministry of Housing and Urban Poverty Alleviation approved construction of 25,221 new houses for the urban poor in 31 cities in Bihar at a total cost of $186 million, including central assistance of $58 million. Source: Business Standard

Bihar has approved $76 million in funding for start-ups in order to promote entrepreneurship in the state. Each start-up approved to participate will receive an interest-free loan of $15,000. The state government will match start-ups to angel investors and will provide business valuations at no cost. Source: Indian CEO

The Bihar Electricity Regulatory Commission approved an overall 55 percent tariff hike for the 2017-18 fiscal year. The increase will be effective April 1, 2017. Current subsidies to below-poverty-line and rural consumers, if extended, would lower the overall increase to 28 percent. Source: Indian Express

The National Thermal Power Corporation (NTPC) has reversed its decision to cut power to Delhi distribution company BSES Yamuna Power Limited (BYPL) during the peak summer season after BYPL agreed to pay part of its debt by the end of March and committed to a payment plan for the remainder. BYPL owes $36.7 million to NTPC. Source: Financial Express

Bharat Heavy Electricals Limited (BHEL) has successfully commissioned the second 250 megawatt (MW) unit of a coal-based power plant at Bhavnagar. The unit uses eco-friendly Circulating Fluidized Bed Combustion technology, which can reabsorb up to 95 percent of pollutants before they are released into the atmosphere. The additional capacity comes as Gujarat’s four state-owned coal-based power plants recorded a capacity utilization of only 41 percent in 2016; due to the high cost of coal, the plants were not able to produce power cheaply enough to justify first-run status. Source: Reuters, Indian Express

Gujarat has refused to sign power purchase agreements for wind power with tariffs higher than that reached at India’s first ever wind power auction. The state’s power regulator had set wind tariffs at 6 cents per kWh, but the auction, completed in February, produced a tariff of 5 cents per kWh. Source: Economic Times

Vestas Wind Systems inaugurated a wind turbine blade manufacturing unit in Gujarat. Source: DNA India

Haryana will raise the cost of living allowance by 7 percent, from 125 to 132 percent of base salary, for state employees. Source: Outlook India

Haryana launched the ‘e-Bhoomi’ portal, a website meant to increase efficiency and transparency to the government land-purchase process. The website will be used to disseminate government solicitations for land and will also allow landowners to submit their land unsolicited. Source: Economic Times

The Karnataka Assembly passed a law to regularize the legal status of the homes of landless agriculture labourers. The bill amended the Karnataka Land Reforms Act 1961 to provide ownership rights over such houses. Source: Hindu Business Line

The municipal government of Bengaluru, the Bruhat Bengaluru Mahanagara Palike (BBMP), presented a $1.4 billion budget for Karnataka’s capital. The Congress-Janata Dal (Secular) coalition included $77 million for welfare programs for scheduled caste/scheduled tribe residents. Source: Livemint

ABB India won the India Smart Grid Foundation (ISGF) Innovation Award for its work on restoring and modernizing the 1,035 MW Sharavathi hydropower plant, which accounts for 25 percent of generation by the Karnataka Power Corporation. The project achieves seamless integration of plant data using Internet of Things technology. Source: Hindu Business Line In Detail: Press Release

Tata Metaliks has informed the Karnataka government that it cannot implement a planned $2.3 billion integrated steel plant at Haveri due to unavailability of iron ore. Source: Hindu Business Line

The Union Ministry of Housing and Urban Poverty Alleviation approved construction of 27,475 new houses for the urban poor in 43 cities and towns in Madhya Pradesh at a total cost of $261.7 million, including central assistance of $63 million. Source: Business Standard

Madhya Pradesh and the Asian Development Bank (ADB) signed an agreement for a $350 million loan to improve 900 miles of district roads as part of the state’s road development plan. The work is expected to be complete by March 2021. Source: India Infoline

Bharat Heavy Electricals Limited has commissioned a 660 MW super critical thermal unit for the Mouda power station at Nagpur. The work was performed for the NTPC. Source: Economic Times

Maharashtra has notified the first set of regulations under the central Real Estate (Regulation and Development) Act, passed in Parliament last year. The regulations require developers to keep 70 percent of deposits in an escrow account to fund construction, register developments that are 60 percent sold, and convey title deeds within six months of registration. They also forbid discrimination in real estate sales on the basis of religion, caste, marital status, or dietary preferences. Source: DNA India, Free Press Journal

The Maharashtra police are establishing an Intellectual Property Crime Unit (IPCU) to tackle online piracy. The unit’s leadership is seeking a close relationship with the private sector. Source: Free Press Journal

NTPC has commissioned an additional 20 MW capacity at Bhadla Solar Power Project in Rajasthan, bringing total capacity to 205 MW. Source: Economic Times

The state government will install 10,000 solar irrigation pumps in the forthcoming fiscal year at a cost of $60.7 million. Previously the program covered only 3-5 horsepower (HP) pumps, but it will now be expanded to include 7.5-10 HP pumps as well. Source: Hindustan Times

The Tamil Nadu State Legislative Assembly passed a bill amending the Tamil Nadu Town and Country Planning Act, 1971 to extend the validity of planning permission from three to five years. The amendment is meant to make it easier for developers to complete large-scale products before their permissions expire. Source: The Hindu

The Tamil Nadu Energy Development Agency (TEDA) has issued a request for bids on a 500 MW solar park. The proposed park will be situated on 2,500 contiguous acres in one of the state’s sunniest regions. Source: PV Magazine

State-owned Power Finance Corp has sanctioned a term loan of $841 million to Tamil Nadu Generation & Distribution Corporation Ltd to build a 2 x 800 MW coal-based power plant in Ramanathapuram. Source: Business Line

The Telangana Legislative Assembly passed the Scheduled Castes (SC) and Scheduled Tribes (ST) Special Development Fund (Planning, Allocation and Utilisation of Financial Resources) Bill, 2017. The bill increases of the minimum percentage of inhabitants who are members of the target population necessary for an area to be declared SC or ST to 40 percent from 20 percent. Source: The Hindu

Qualcomm and Telangana start-up incubator T-Hub signed a memorandum of understanding (MOU) on strategic collaboration to support start-ups. Qualcomm will expand its Innovation Lab in India by providing access to design, development, and testing facilities at Hyderabad. T-Hub will provide mentorship and logistical support from in-house experts for start-ups focused on innovation around financial technologies and smart cities. Source: The Hindu

Union Power Minister Piyush Goyal and newly installed Uttar Pradesh Energy Minister Shrikant Sharma have decided to provide all below poverty line households in Uttar Pradesh with free power connections. The state will also offer amnesty to households and businesses that are currently using illegal power connections if they sign up for legal connections. Source: Economic Times

The Uttar Pradesh New and Renewable Energy Agency (UPNEDA) has begun construction of a 50 MW solar park on 250 acres in the Allahabad district. UPNEDA has also approved rooftop solar panels for several institutions in the district; owners of rooftop panels will be able to sell the electricity they produce back to the state’s northern grid. Source: Economic Times

Nothing critical to report this week.

Best of the Rest

Himachal Pradesh

With its treasury empty at the end of the current fiscal year, Himachal Pradesh has decided to borrow $107 million from the Reserve Bank of India to pay this month’s salaries. The state’s existing loans exceed $7.7 billion. Source: Indian Express


The World Bank has approved a $100 million loan to improve medical services in Uttarakhand. The ‘Uttarakhand Health Systems Development Project’ will engage the private sector to provide health services while the other on stewardship and system improvement. The state government will provide an additional $25 million towards the total cost of the project. Source: Hindu Business Line


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