Update on India’s States: October 15, 2015

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There is widespread recognition of the importance of the political-economies of Indian states. Yet there is a lack of hard, credible information on what states are doing to strengthen or weaken their own economies. The CSIS Wadhwani Chair in U.S. India Policy Studies is pleased to issue the second edition of our new “Update on India’s States” weekly newsletter.

This newsletter will cover India’s largest and/or most economically advanced states, including Andhra Pradesh, Delhi, Gujarat, Karnataka, Maharashtra, Rajasthan, Tamil Nadu, Telangana, West Bengal, and Uttar Pradesh. The newsletter will focus on concrete information: Legislation, regulations, new investments, key political changes, and other measurable actions that will help the public understand which states are leading the reform process, and which are lagging. To subscribe click here.

 

Big News

The Center and the states have completed drafting the model Goods and Services Tax law as well as an integrated-GST law and will release the drafts by early November. Source: The Economic Times, The New Indian Express

The Modi government is finalizing a new plan to restructure state utilities’ massive debt burden. State governments will take over the debt load directly, and the central government will relax states’ borrowing limits. The Union Cabinet is likely to approve the new scheme shortly. Source: Business Standard

Maharashtra has ranked in the top of a survey of the Indian hospitality industry conducted by global hotel consultancy HVS; Delhi and Goa were ranked in second and third places, respectively. Source: The Economic Times

A committee headed by the Telangana Chief Secretary is looking into the re-organization of the state’s existing 10 districts. Source: The New Indian Express

Telangana Chief Minister K. Chandrasekhar Rao said the state assembly will pass a resolution establishing a 12 percent quota for Muslims and send it to the central government. Source: Zee News

West Bengal state election commissioner Sushanta Ranjan Upadhaya tendered his resignation after coming under heavy pressure from both the ruling Trinamool Congress and the opposition BJP for his management of the by-poll elections. Source: The Economic Times

Center–State relations

The Center and the states have completed drafting the model Goods and Services Tax law as well as an integrated-GST law and will release the drafts by early November. The Empowered Committee of State Finance Ministers is likely to meet this month to discuss the legislation. Source: The Economic Times, The New Indian Express

The Modi government is finalizing a new plan to restructure state utilities’ massive debt burden. State governments will take over the debt load directly, and the central government will relax states’ borrowing limits. The Union Cabinet is likely to approve the new scheme shortly. Source: Business Standard

The Union Cabinet approved the establishment of three new All India Institutes of Medical Sciences (AIIMS) in three states. The new AIIMS will be built at Nagpur in Maharashtra, Manglagiri in Andhra Pradesh and Kalyani in West Bengal at a cost of Rs 49.5 billion ($761 million). Source: India Today

The Supreme Court imposed an environment compensatory charge (ECC), ranging from Rs 700 to Rs 1,300, on commercial vehicles passing through Delhi during the next four months. Source: Business Standard

Chief Minister N. Chandrababu Naidu launched a state-wide e-governance initiative that is meant to bring all government departments online and offer a single window for government services. Source: The Times of India

The Union Urban Development Ministry has approved a Rs 6.73 billion grant to Andhra Pradesh to be used to develop the water supply, sewer system, and public transport in 31 towns and the new capital city of Amaravati. Source: The New Indian Express

A three-member team from Andhra Pradesh visited Japan from October 6 to 11 to discuss bilateral economic ties, particularly in developing the new capital at Amaravati.Source: The Hindu

Chief Minister Arvind Kejriwal sacked a member of his cabinet after receiving a corruption complaint. Kejriwal released audio clips of the Food and Civil Supplies Minister Asim Ahmed Khan allegedly discussing a Rs 600,000 ($9,200) bribe for allowing the construction of a building in his assembly constituency. Source: The New Indian Express

The Supreme Court imposed an environment compensatory charge (ECC), ranging from Rs 700 to Rs 1,300, on commercial vehicles passing through Delhi during the next four months. Source: Business Standard

An independent committee’s recommendation that the basic salary of Delhi Members of the Legislative Assembly (MLAs) be increased four times has given rise to political controversy. If the report is accepted, Delhi MLAs will become the highest paid in the country with a monthly package of Rs 2.35 lakh ($3,600). Source: The Economic Times

Property taxes collected by the New Delhi Municipal Council (NDMC) reached an all-time high of Rs 3 billion in the first six months of the 2015-16 financial year. As of September 30 this year, a total of 7,306 private and 402 government tax payers had paid their taxes. In comparison, only Rs 598.5 million was collected in 2014-2015, from 673 private and 440 government taxpayers. Source: The Hindu

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Gujarat Chief Minister Anandiben Patel announced a new package of benefits for students from low-income families, especially those who do not benefit from affirmative action quotas. The Gujarat government hopes the Rs 100 billion ($1.5 billion) scheme will placate communities, especially the Patidar community, that have been agitating for their own quota. Source: Business Standard

IndiaBanners_CogitAsia_states_Karnataka

Amidst widespread drought in the state, the Karnataka government announced that it would waive interest and penal interest on crop loans from cooperative banks and more than double the compensation it pays the families of farmers who commit suicide. Source: The Economic Times

The State Cabinet has decided to create a joint venture (JV), Karnataka Natural Gas Ltd., with the support of Gas Authority of India Ltd. The JV will construct a Dabhol-Bengaluru natural gas pipeline project and has an initial investment of Rs 1 billion. Source: The Hindu

The Karnataka Fund scam, which involved the illegal holding of government money in private banks, has grown as a state agency discovered a further Rs 5.5 billion in misplaced funds. An investigation committee had previously estimated that Rs 13 billion had been parked illegally in various banks. Source: The New Indian Express

Karnataka pitched itself as a defense and aerospace hub for Central European countries during a meeting of the India-Central Europe Business Forum (ICEBF). Source: The Hindu Business line

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A slowdown in the building sector has affected Maharashtra government revenue at a time when the state is already facing financial constraints. The Urban Development and Housing Departments have been under-achievers with a mere 3 percent tax collection in the first two quarters of the financial year. Source: The Hindu Business line

The municipal corporation polls in Kalyan-Dombivali and Kolhapur will be held on November 1. Ahead of the election, Maharashtra Pradesh Congress Committee (MPCC) accused Maharashtra Chief Minister Devendra Fadnavis of violating the electoral code after announcing a Rs 65 billion development package for the Kalyan-Dombivali region. Source: The Economic Times

Maharashtra has ranked in the top of a survey of the Indian hospitality industry conducted by global hotel consultancy HVS; Delhi and Goa were ranked in second and third places, respectively. Source: The Economic Times

The Maharashtra cabinet gave its approval for incentives to be offered to the Ratnagiri Gas & Power Pvt Ltd in return for the revival of the Dabhol power plant project. Source: Business Standard

Maharashtra is expected to begin the process of reclaiming five regional airports awarded to Reliance Airport Development in August 2009. The decision was made due to Reliance’s lack of progress in developing the airports. Source: Business Standard

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Rajasthan Chief Minister Vasundhara Raje released Rajasthan’s first start-up policy to promote sustainable entrepreneurship in the state. Source: The Economic Times

The Rajasthan Government sent a bill proposing a five percent reservation for Gujjars and other communities classified as Special Backward Classes (SBC) to the Governor for his consent. Source: Zee News

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Preparations are underway for operating the second unit of Kudankulam Nuclear Power Plant in Tamil Nadu. Russian company Rosatom, which is building the plant, announced that it is ready to build two more reactors of 1000 MW capacity each. Source: The Hindu

Following protests by area residents, the Tamil Nadu State government has announced that it will not allow coal bed methane exploration in the delta districts of Thanjavur and Tiruvarur. The government has urged the Center to end exploration and allied activities throughout the region. Source: The Hindu

Tamil Chief Minister Jayalalithaa strongly objected to the Centre’s attempts to institute a National Eligibility cum Entrance Test (NEET) for medical and dental courses, saying it would hurt students and infringe the state’s right to set policy initiatives and socio-economic priorities. Source: The Economic Times

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A committee headed by the Telangana Chief Secretary is looking into the re-organization of the state’s existing 10 districts. Source: The New Indian Express

After mass suspension of Opposition members from the Telangana Legislative Assembly, opposition parties launched mass demonstrations, demanding that the government implement its election promise of farm loan waiver at once instead of in phases. Source: The New Indian Express

Telangana Chief Minister K. Chandrasekhar Rao said the state assembly will pass a resolution establishing a 12 percent quota for Muslims and send it to the central government. Source: Zee News

Indian credit rating agency ICRA gave Telangana an ‘A’ rating for economic strength. The same agency had previously rated the undivided State of Andhra Pradesh as an ‘A-’ -’. Source: The Hindu Business line

 IndiaBanners_CogitAsia_states_UttarPradesh

The first phase of polling for local councils was marred by incidents of violence. The State Election Commissioner Satish Agarwal said elections would be re-held for 12 polling booths out of a total of over 46,000. Source: Firstpost

Uttar Pradesh police are seeking an investigation of Union Culture Minister Mahesh Sharma and BJP MLA Sangeet Som for alleged violation of prohibitory orders in Bishada village, where a 50-year-old Muslim was killed on suspicion of eating and storing beef. Source: Business Standard

 The Indian Industries Association (IIA), the largest trade association in Uttar Pradesh, has asked for further support from German NGO ZDH/SEQUA to help IIA chapters expand and become self-sufficient in smaller districts of Uttar Pradesh. Source: The Times of India

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In a major boost to the party ahead of next year’s Assembly polls, the Trinamool Congress scored a landslide victory in the newly formed Bidhannagar Municipal Corporation, bagging 37 of the 41 wards and winning all the 16 wards in Bally Municipalty under Howarah district. Source: The New Indian Express

The Bengal state organization of the BJP is disappointed with its performance in by-elections. The BJP, which had claimed it was fast emerging as the principal opposition in the state, failed to win a single seat in the SMP and panchayat bypolls in the region. Source: The Economic Times

West Bengal state election commissioner Sushanta Ranjan Upadhaya tendered his resignation after coming under heavy pressure from both the ruling Trinamool Congress and the opposition BJP for his management of the by-poll elections. Source: The Economic Times

West Bengal Chief Minister Mamata Banerjee said that her state would become “business partners” with Bhutan as she held talks with the top Bhutanese leadership including King Jigme Khesar Namgyel Wangchuck. The two sides discussed agro-marketing, tourism, and transportation. Source: The Economic Times

Richard Rossow

Richard Rossow

Richard M. Rossow is a senior fellow and holds the Wadhwani Chair in U.S.-India Policy Studies at CSIS.

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