Update on India’s States: November 11, 2015


In the biggest news of the week, a coalition headed by the Janata Dal (United) and Rashtriya Janata Dal won more than two-thirds of seats in the Bihar Legislative Assembly, handing Prime Minister Modi’s Bharatiya Janata Party (BJP) a major defeat. Source: Election Commission of India

Also the Center unveils a comprehensive plan to deal with state electricity debt. The National Green Tribunal turns up the heat on the Andhra Pradesh government for continuing the development of its new capital city. The winter session of the Delhi assembly meets November 18, but may not take up the Jan Lokpal Bill. President Mukherjee still has not signed Gujarat’s anti-terror law. Uttar Pradesh will hold village and Gram Panchayat elections in November-December, with results on December 12.

Despite the widespread understanding that actions by India’s states will be critical to its future growth, there is a lack of credible information on how states are managing (or mismanaging) their economies. The Wadhwani Chair’s weekly “Update on India’s States,” which covers ten of India’s largest and/or most economically advanced states, is meant to help fill this gap by focusing on concrete developments: legislation, regulations, new investments, key political changes, and other measurable actions. These updates will help show which states are leading the reform process, and which are lagging.

Center-State Relations

The central government has offered states a bailout plan for state-owned electricity distribution companies (discoms). Under the optional bailout, states will be responsible for 75 percent of the debt of their discoms, while the rest of the debt will be converted to low-interest loans from the central government. Rajasthan appears to be the first state to agree to the program. Source: Livemint

Power ministers of all states and Union Territories, meeting in Delhi, unanimously decided to ensure electrification of all villages currently without power by March 31, 2017 and to continue to work towards providing all Indians 24/7 power by 2019. Source: The Economic Times

A panel of state chief ministers has recommended that the Center decrease its financial share in centrally-sponsored schemes. The panel recommended lowering the number of central schemes to 30 from 72 and earmarking 25 percent of allocation in a scheme for a flexi-fund to be spent in accordance with the finance ministry’s guidelines. Source: Business Standard

Andhra Pradesh has enlisted the World Economic Forum (WEF) to conduct a systematic assessment of the state’s economy. This is the first time the WEF has ever partnered with a government below the national level. Source: The New Indian Express

The National Green Tribunal served a contempt notice on the Andhra Pradesh government and the Andhra Pradesh Capital Region Development Authority for continuing construction work on the new capital city, Amaravati, ignoring its stay order. Source: The New Indian Express

A delegation from Japan’s Toyama state visited the Sri City special economic zone to assess business potential and to explore investment opportunities, as well as strengthen bilateral trade ties. Source: The Economic Times

The central government is insisting that Andhra Pradesh provide a full accounting of the nearly $300 million it allegedly spent on irrigation works before the state can be reimbursed with federal funds. Source: The Hindu

The anti-graft Jan Lokpal (Ombudsman) Bill, the centerpiece of the Aam Aadmi Party’s campaign platform, may not come to a vote during the winter assembly session, which begins November 18. The Delhi government has not yet requested the approval of the Home Ministry and has prioritized other bills. Source: The New Indian Express

The Delhi government is considering imposing a congestion fee on cars entering the capital’s high-traffic areas after a cabinet delegation visited Stockholm, Sweden to study the transportation system and road design there. Source: The New Indian Express


President Pranab Mukherjee has yet to sign Gujarat’s controversial anti-terror bill eight months after it was passed by the Gujarat Assembly. The bill, which was cleared by the Ministry of Home Affairs, cannot become law until signed by the President. Source: The Hindu

The Nationalist Congress Party said that it has severed ties with its former ally, the Congress Party, and will contest the upcoming local body polls on its own. Source: Desh Gujarat


The Karnataka Cabinet approved a sweeping reform to the Panchayati Raj Act, which governs local bodies in the state. If passed, the bill will require local councils to hold village meetings at least twice a year; the meetings will be open to all adults and will be used to determine who in the village is entitled to welfare benefits. Source: The New Indian Express

Faced with a severe power shortage, the Union government has agreed to allocate Karnataka an additional 200 MW of power from the southern grid. Source: The New Indian Express


The Maharashtra government has decided to disinvest from seven loss-making Public Sector Enterprises (PSEs) in the areas of agriculture, electronics, textiles, and regional economic development. Maharashtra currently has 55 PSEs, under the control of 20 government departments. Source: The Hindu Business Line

The Maharashtra government said it will seek central financial assistance of $660 million for drought relief. The government added 1,420 villages to the list of “drought-affected” hamlets, bringing the total to 16,128. Source: The Economic Times

Relations have not improved between coalition partners Shiv Sena and the Bharatiya Janata Party following city elections in Kolhapur and Kalyan-Dombivali. The two parties are now fighting over which side will appoint the mayor of each municipality. Source: The Economic Times


Officials said Rajasthan, whose power distribution utility (discom) has the highest debt exposure of all states, would be the first to sign up for a central scheme to help clear state discoms of debt. Source: Business Standard

The Rajasthan government launched the Rajasthan Agro-Processing and Agri-Marketing Promotion Policy, which is meant to support agricultural prices by promoting agro-processing and reducing post-harvest losses. Source: The Hindu Business Line

The Center will assist Rajasthan in the construction of an inland shipping port at Jalore, which will connect the state with the Arabian Sea and promote transportation of minerals via waterways. Source: The Economic Times


The Ministry of New and Renewable Energy has requested that the Tamil Nadu Electricity Regulatory Commission review biomass power tariffs in order to help the endangered industry in the state. Source: The Hindu Business Line

Four small leftist opposition parties – including India’s two Communist parties  announced they had formed a new political alliance, the People’s Welfare Alliance (PWA), to contest the 2016 Assembly elections. Source: The New Indian Express

The Telangana government launched the second phase of Mission Kakatiya, a program to restore tanks and lakes in the state, announcing that groundwork would be completed in three months. Work on both the phases is expected to be completed by March 2016. Source: The New Indian Express


After the successful completion of Zila and Kshetra panchayat elections, the Uttar Pradesh Election Commission issued a schedule for the election of 58,909 village heads and 700,000 Gram panchayat members. The election will be held in four phases on November 28 and December 1, 5 and 9. The state Election Commission will announce results on December 12. Source: The Economic Times


West Bengal will support the Goods and Services Tax (GST) Bill on the condition that the state’s revenues are not affected, said Amit Mitra, the state’s Finance, Commerce and Industry, and IT Minister. Source: The Hindu Business Line

West Bengal chief minister Mamata Banerjee criticized the central government for “slashing funds” for development projects across the state, saying that the state is now responsible for 90 percent of the costs of many schemes. Source: The Economic Times

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