Update on India’s States: March 8, 2017

The Goods and Services Tax clears another major hurdle; Bihar, Haryana, and Madhya Pradesh present their budgets; West Bengal passes laws empowering municipal executives and moving towards a single market for agricultural produce; Karnataka replaces its 99-year lease on industrial land with a purchase option; Haryana allows tenants to apply for bank credit while ending adverse possession; Rajasthan passes a rent-control act; and more.

Center–State relations

The Goods and Services Tax (GST) Council approved two crucial pieces of implementing legislation that, when passed by the center and the states, will bring the tax into effect nationwide. Two remaining laws are yet to be approved. The council also agreed to cap the maximum amount of the GST at 40 percent, while sticking to the earlier slabs of 5, 12, 18 and 28 percent for the present. Source: Livemint, Times of India

The Andhra Pradesh cabinet approved a draft of the Andhra Pradesh Logistics University Bill, 2017, which will establish a string of both residential and distance learning centers specializing in supply chain management. Source: The Hindu

Fuelade Solutions LLC, a U.S.-based producer of innovative green fuel catalysts, signed a Memorandum of Association with the Andhra Pradesh Economic Development Board as part of its plan to manufacture fuel catalysts in Andhra Pradesh. Source: The Hindu

The state’s first Legislative Assembly session to be held in the new capital of Amaravati opened on March 6. Source: Hindu Business Line

Bihar finance minister Abdul Bari Siddiqui presented the state’s 2017-18 budget, with expenditure of $24 billion, $2.3 more than the previous year. The state allocated 17.6 percent of the budget to education, followed by rural development (12 percent), rural works (10.5 percent), energy (8.40 percent), and road construction (7 percent). The budget did not increase taxes. Budgeted fiscal deficit is 2.48 percent of the state’s gross domestic product. Source: Indian Express

Masayuki Taga, Japan’s consul general in Kolkata, met with Chief Minister Nitish Kumar and discussed possible Japanese investment in the state. Source: Times of India

Lieutenant Governor Anil Baijal ratified a Delhi cabinet decision raising the minimum wage for three categories of labor. As of March 6, Delhi will have the highest minimum wages in the country. Source: Times of India

New Delhi ranks among the worst cities in the world in terms of noise pollution and hearing loss, according to a new study by a German hospital. Delhi is joined by Guangzhou, Cairo, and Istanbul on the list of the worst cities. Source: India Times

Delhi announced that its new solar power policy will come into effect in April. The policy will include a list of vendors of solar panels who are eligible for the center’s 30 percent subsidy on rooftop solar system. Consumers will receive an incentive of 3 cents (INR 2) for every kilowatt of energy they generate from the systems. Source: Hindustan Times

Delhi residents can now apply online for eight transport department services, including to get a drivers licence or a duplicate registration certificate, and to transfer vehicle ownership. Source: Business Standard

Gujarat has a larger than average urban/rural divide when it comes to missing girl children. The state has 914 girls for every 1000 boys in rural areas, but only 852 girls for every 1000 boys in urban areas, a difference of 62. The average national difference between sex ratios in urban and rural areas in only 18. Source: Times of India

Gujarat’s food and drug administration signed a Memorandum of Understanding (MoU) with French biotech firm bioMerieux to build a food testing laboratory in Vadodara. Source: Times of India

Haryana finance minister Captain Abhimanyu proposed a budget of $15.3 billion, an increase of $1.35 billion (13.18 percent) over the previous year’s budget. The budget’s ratio of capital to revenue expenditure is roughly 1 to 4. Source: Tribune India

The Haryana Assembly amended a series of laws to adjust the legal relationship between landlords and tenants in the state in order to give tenants better access to credit and crop insurance while increasing the safeguards preventing tenants from claiming ownership of land. The amendments are also designed to minimize the length and frequency of litigation over land rights. Source: Tribune India

Haryana will extend raises recommended by the seventh central pay commission to pensioners as well as current employees and will backdate them to January 1, 2016. The decision will benefit about 225,000 pensioners. Source: Business Standard

Karnataka’s cabinet has amended the Karnataka Industrial Areas Development Board rules to remove the 99-year lease term for industries leasing land in industrial estates. The state will return to the previous policy, under which tenants could purchase the land outright after showing that they intend to use the land for the stated purpose. Source: Times of India

The state cabinet cleared the proposed Namma Metro link in Bangaluru. The 10-mile link will have 13 stations and will cost an estimated $630 million. Source: The Hindu

Steel giant ArcelorMittal is seeking the state government’s permission to build a 600 megawatt (MW) solar plant on a site that was originally meant for a steel mill with the capacity to produce six million metric tons per year. ArcelorMittal cited steel overcapacity worldwide and the uncertainty of iron ore availability in the area as reasons for the change. Source: PVTech

Finance Minister Jayant Malaiya presented a $27.8 billion budget with a revenue surplus of $688 million. Budget highlights included the decision to extend the raises recommended by the Seventh Pay Commission to state employees and $104 million for Smart City development. Source: Financial Express, Times of India

Taxi-hailing app Ola signed an MoU with Madhya Pradesh to offer driver training to about 25,000 state residents. Source: Business Standard

The Maharashtra government released its own defense and aerospace policy in an attempt to attract investment of $5 billion over the next five years. The state government will float a special fund worth $150 million with contributions from the Maharashtra Industrial Development Corporation, banks, and other financial institutions to provide initial funding to investors. Source: Business Standard

PepsiCo and the Maharashtra government signed an agreement to collaborate in skill development for workers in food processing plants and to modernize Industrial Training Institutes in the state. Source: Business Standard

The state government was able to spend only 45 percent of its total budget allocation in fiscal year 2017 as the Election Commission’s model code of conduct was in force for four months of the year. The code of conduct prohibits state governments from announcing new spending programs in the run-up to elections. Source: Business Standard

The state government has unveiled new rules for city taxis which make it mandatory for all app-based aggregators to offer safety features like 24×7 control rooms and to have fleets using clean fuels like petrol and compressed natural gas. Traditional radio cabs will be able to migrate to accept rides from app-based aggregators, but depending on the time of day may not be able to accept meter rides immediately thereafter. Source: DNA India

World Bank officials met with the Maharashtra government to discuss delivery of a $1 billion assistance package focused on urban transport and climate-resilient agriculture practices. Source: Indian Express In Detail: Press Release

Chief Minister Devendra Fadnavis appointed senior IAS officer Sumit Mullick as the chief secretary of Maharashtra, succeeding Swadheen Kshatriya. Mullick is the third Dalit to reach the highest post in the state’s bureaucracy. Source: Indian Express

The state assembly passed the Rajasthan Rent Control (Amendment) Bill, making it the first state in the country to adopt the center’s Draft Model Tenancy Act, 2015. The act lays out the process by which landlords can raise rents but also sets a rent ceiling. Source: Business Standard, The Hindu

The Rajasthan government will require employers of formal-sector shop and factory workers to pay their employees via check or bank deposit rather than cash. Source: Financial Express

Protests against a plan to conduct small-scale oil and gas extraction in the Neduvasal district are gaining strength, with protesters refusing to call off the agitation until the center issues an order to scrap the project. Source: DNA India

The first day of a boycott of PepsiCo and Coca-Cola across Tamil Nadu saw mixed results, with many restaurants and supermarkets continuing to sell the products. The boycott was inspired by concerns over groundwater extraction. Source: Business Standard

Google India signed an MoU with the Telangana government to support the state’s start-up efforts. Google India will provide Google Cloud credits and access to cloud platform products to eligible start-ups engaged with the state-sponsored T-Hub incubator and will also provide technical mentorship and advisory support. Source: The Hindu

Telangana proposed to issue special securities worth $1.3 billion under the Ujjwal Discom Assurance Yojana program in order bail out debt ridden power distribution companies (discoms). The state’s two discoms carried long-term debt of $1.78 billion as of September 2015. Source: Times of India

Telangana Transco announced the successful installation and test charge of two new feeder bays at the Dichpally substation, the final step necessary before Telangana can begin to receive power from Chhattisgarh. Telangana’s two discoms are set to get 1,000 MW of electricity beginning in the middle of March. Source: Times of India

The sixth phase of Uttar Pradesh elections saw a turnout of 57 percent, a slight increase from the 2012 state and 2014 general elections. Source: Livemint

The West Bengal state assembly passed three important bills:

  • the Clinical Establishments Bill, which gives the state power to monitor private healthcare institutions and to impose penalties in case of violations. The bill requires private healthcare providers to accept and treat patients in cases of acid attack, rape, or accidents. Source: Business Standard
  • A bill amending the West Bengal Agricultural Produce (Regulation) Act, 1972 to create a single license for trading in all markets within the state. Source: Business Standard
  • the West Bengal Municipal (Amendment) Bill, 2017, which empowers executive officers of urban local bodies to take on additional responsibilities in order to provide better civic services. Source: The Hindu

A five-member delegation led by China’s ambassador to India Luo Zhaohui met with Chief Minister Mamata Banerjee. The Chinese side expressed interest in investing in the state, principally in the manufacturing and small business sectors. Source: Money Control

Best of the Rest


Manipur recorded its highest-ever voter turnout of 84 percent in the first phase of assembly elections on Saturday, March 4. The high turnout was indicative of the fierce contest between the governing Indian National Congress and the Bharatiya Janata Party. Source: Indian Express


Tripura will supply eastern Bangladesh with a further 60 MW of electricity, beyond the 100 MW it has been providing since March 2016. Source: Nagaland Post


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