Update on India’s States: November 25, 2015


This week, Delhi’s winter legislative session has begun, with a full slate of proposed bills; state finance ministers can’t agree on who should be required to pay the Goods and Services Tax; Maharashtra is legalizing millions of houses; Rajasthan welcomes billions in investment pledges; and Telangana is rolling out e-governance to rural areas across the state.

Center-State Relations

A committee of state finance ministers is deadlocked on the question of which businesses will be subject to the proposed national goods and services tax (GST). Ministers from Punjab, Chhattisgarh, and Delhi agreed to the Union government proposal to set the threshold at just under $40,000 in annual turnover; others pushed for $15,000. Source: Business Standard

The federal government began collection of a 0.5 percent tax on services to fund the Swachh Bharat (Clean India) program. Revenues from the tax will remain with the national government and are expected to reach $150 million annually. Source: Business Standard

The Andhra Pradesh government declared another 163 sub-districts to be drought-hit, bringing the total to 359 for this year’s monsoon harvest season. At the same time, torrential rains are causing flooding in the Nellore, Chittoor, and Kadapa districts. Source: The New Indian Express

The Andhra Pradesh government and Chinese company Trina Solar signed a memorandum of understanding (MoU) to set up a $430 million plant that will build solar panels and related technology. Andhra Pradesh chief minister N Chandrababu Naidu said the venture would create jobs for 3,500 people. Source: The New Indian Express

The Winter Session of the Delhi Legislative Assembly began on November 18. During the session, the government will introduce the Jan Lokpal Bill, the Code of Criminal Procedure (CrPC) Amendment Bill, Delhi School Education Amendment Bill, Working Journalists Provisions Act (Amendment Bill), Minimum Wages Amendment Bill, and amend the Delhi (Right to Citizens Time-Bound Service Delivery) Act, 2011. Source: The New Indian Express


The Delhi cabinet cleared the Jan Lokpal Bill, the first step towards creating the post of an anti-graft ombudsman. The Bill is based on the model law promoted by Anna Hazare, leader of a 2011 national anti-corruption movement. Source: The Economic Times

Union Minister of Urban Development M. Venkaiah Naidu announced special assistance of $500 million to improve traffic flow in Delhi. The funds will go towards construction of new infrastructure, particularly bridges and tunnels. Source: The Hindu Business Line


Gujarat chief minister Anandiben Patel rejected the Patidar caste’s demand for reservations as an “Other Backward Class.” This is the first time that Patel has ruled out reservations for the community, which has plunged Gujarat into turmoil with large-scale protests. Source: Times of India

Elections for six municipal corporations in Gujarat began on November 22. All six corporations – Ahmedabad, Surat, Rajkot, Vadodara, Jamnagar, and Bhavnagar – are currently controlled by the Bharatiya Janata Party. Over 1,800 candidates are contesting 568 seats in 143 wards. The second phase of elections will take place on November 29. Source: India Today


The state government suffered a loss of over $46 million as a result of a scheme in which funds meant for providing drinking water to rural areas were illegally deposited in private accounts while corrupt officials collected the interest. A criminal complaint has been lodged with the state police. According to an internal audit, the value of illegal transactions was over $215 million. Source: The New Indian Express


The Maharashtra government amended a state land-use law that had prevented the legalization of millions of informal settlements throughout urban areas of the state. Development will now be permitted on plots of less than 24.71 acres, allowing for legalization or construction of at least 5 million houses across Maharashtra. Source: The Economic Times

Cash-strapped Maharashtra will be hit hard by the recommendations of the 7th Pay Commission, which could require giving 1.7 million state employees a raise at an initial cost of $2.7 billion. Maharashtra finance minister Sudhir Mungantiwar said that the state may not grant the full raise promised federal employees, keeping costs to $750-900 million. Source: Business Standard

The state government will not force the developers of uncompleted Special Economic Zones (SEZs) to return land bought from farmers, but will require developers to return land purchased from the Revenue department. Under current law, land acquired from farmers must be returned to them if development has not begun within 10 years. Source: The Economic Times

The Maharashtra government seized $27 million worth of property from corrupt government employees this year. Data from the Anti-Corruption Bureau showed that the Revenue Department was home to the greatest number of corrupt officials, followed by the Public Works department. Source: The Economic Times

Maharashtra chief minister Devendra Fadnavis met with steel magnate Laxmi Mittal in London to encourage development of the Gadchiroli district into a steel manufacturing hub. Source: The Indian Express


Rajasthan signed 295 MoUs committing investment of $50 billion into the state during the Resurgent Rajasthan Summit. Investors include leading industrial houses like the Adani Group, Reliance, and the Aditya Birla Group. Rajasthan industries minister Gajendra Singh Khimsar, however, conceded that only about half the pledged amount is likely to materialize. Source: The Economic Times, The Economic Times

South Australia and Rajasthan signed a ‘sister-state agreement’ that is meant to boost export and investment opportunities between the two states. The relationship will center on the exchange of research, policy, and technical capabilities. Source: The Economic Times


In response to the state government’s request, the central government will release $144 million in flood relief funds to Tamil Nadu. Meanwhile, a central team is also being deputed to Tamil Nadu to assess the damages, and further action will be taken after the team submits its report. Source: Press Information Bureau

The Supreme Court said it will hear challenges to the acquittal of Tamil Nadu chief minister J Jayalalithaa on February 2. Jayalalithaa was charged with possessing assets disproportionate to her known means of income. Source: News on AIR

All-India Anna Dravida Munnetra Kazhagam (AIADMK) will contest the upcoming Tamil Nadu Assembly elections with a familiar line-up after party Secretary Jayalalithaa retained most party officials in their current positions. The lack of change is a sign of confidence in the AIADMK’s position going into the April elections. Source: The Economic Times


The Telangana government has opened female-run ‘Digital Telangana Centers’ offering e-governance facilities to villagers in 100 gram panchayats (local village councils) across the state and plans to open the Centers in 1,000 others by January. The Centers will eventually offer banking and insurance services, and the government plans to eventually open one in each of the state’s more than 8,500 gram panchayats. Source: The Economic Times

The Telangana government cleared 16 industrial projects worth $240 million under the new Telangana State Industrial Project Approval and Self Certification System (TS-iPASS). The projects included six solar power plants with a total generating capacity of 47 MW and the expansion of an existing tire-manufacturing plant. Source: The Hindu

In a pre-budget review, the Telangana state government decided to toughen austerity measures to increase funds spent on irrigation, welfare, and development programs and to reduce the finance department’s control over the Irrigation Department. Beginning with Fiscal Year 2016-17, the Department will receive its annual budget of $3.8 billion as a lump sum. Source: The New Indian Express

The Telangana government has agreed to guarantee a $514 million loan made by the central Housing and Urban Development Corporation Ltd. (HUDCO) to Telangana State Housing Corporation Ltd. The money will be used to build housing that will be given to the poor at no cost. Telangana will make budgetary provisions for repaying the loan, with interest, for the entire repayment period. Source: The Hindu


The Congress Party has rejected a grand alliance in the 2017 legislative assembly elections in Uttar Pradesh, announcing that it will contest the polls alone. State party leaders were unanimous in their view that the party should not join with either of the main opposition parties in the state. Source: The Economic Times


West Bengal chief minister Mamata Banerjee invited Nitish Kumar and Arvind Kejriwal, her counterparts from Bihar and Delhi, to the upcoming Bengal Global Business Summit, to be held in Kolkata in January. The move is seen as another effort by Banerjee to form a national front to oppose the Bharatiya Janata Party. Source: The Economic Times

Chief Minister Banerjee, who has criticized the federal government for cutting funds for development programs as it hands states a larger share of tax revenue, urged Prime Minister Narendra Modi to convene a meeting of all chief ministers to settle the issue of devolution of taxes to states while retaining the central government’s contribution to development programs. Source: The Economic Times


Leave a Reply

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