Update on India’s States: September 14, 2016

The GST amendment officially becomes law, and the center notifies establishment of the GST Council; states will have greater flexibility in how they use central welfare and development funds; Bangalore engulfed in protests over Cauvery River water-sharing; Bihar approves a new start-up policy; Gujarat further devolves responsibility for urban planning; Uttar Pradesh is creating an ‘IT cadre’ within its bureaucracy; West Bengal disinvests from a state-run enterprise; and more.

Center-State relations

Goods and Services Tax (GST) Ratification Tracker: On September 8 President Pranab Mukherjee assented to the constitutional amendment creating a goods and services tax, the last procedural step before the amendment becomes part of the constitution. The 21 states that have ratified the GST amendment are: Assam (August 12), Bihar (August 16), Jharkhand (August 18), Himachal Pradesh (August 22), Chhattisgarh and Gujarat (both August 23), Madhya Pradesh and Delhi (August 24), Nagaland (August 26), Maharashtra (August 29), Sikkim, Mizoram, Telangana and Haryana (all on August 30), Goa (August 31), Orissa (September 1), Rajasthan and Puducherry (September 2), Andhra Pradesh and Arunachal Pradesh (September 8), and Meghalaya (September 9).

The cabinet approved the establishment of the GST Council, which will decide on the tax rate for the new GST. The GST Council will consist of the Union finance minister, the minister of state in charge of the Revenue Department, and the state finance ministers. The council will hold its first meeting on September 22 and 23. Source: The Hindu

The central government will give the states more say in how they use funds from Centrally Sponsored Schemes (CSS). States will be able to use 25 percent of CSS allocations (up from 10 percent previously) “to satisfy local needs and undertake innovations in areas covered by the CSS.” Source: Hindu Business Line

State-run mining company Coal India will develop solar power plants with 600 megawatts (MW) of total capacity in four states, including West Bengal and Maharashtra, under the second phase of its plan to build 1,000 MW of renewable energy plants. Source: Economic Times


The center announced a financial package for Andhra Pradesh that includes full funding of the Pollavaram irrigation project, tax concessions, and special assistance, but stopped short of giving the state special category status. Source: Hindu Business Line, Business Standard

The three-day “Monsoon session” of the Andhra Pradesh Assembly ended abruptly after members of the opposition YSR Congress uprooted mics and damaged cameras while demanding special category status for the state. A day-long strike called by YSR Congress and other opposition parties demanding Special Category status brought commercial activities to a halt in the state’s main towns. Educational institutions also remained shut. Source: NDTV, Economic Times


The Bihar government approved a new start-up policy that includes a $745 million venture capital fund meant to encourage young entrepreneurs in the state to start new ventures. The fund will invest only in businesses that are less than five years old and have turnover of less than $3.8 million. Under the policy, start-ups will not have to register or apply for any licenses. Source: Times of India In Detail: Draft Start-Up Policy

Bihar governor Ram Nath Kovind gave his assent to the Bihar Prohibition and Excise Bill, 2016 which was passed by both houses of the state legislature during the Monsoon session. Source: Economic Times


Nothing critical to report this week.


Gujarat chief minister Vijay Rupani met with Harinder Sidhu, Australian high commissioner to India, and an Australian delegation to discuss cooperation in the areas of education, skill development, and water management. Source: BusinessWire

The state government has initiated the process of holding elections for district panchayat committees in all of the state’s 33 districts as required by the Gujarat Metropolitan Planning Committees Act, 2008. The committees, comprising elected and executive members, will oversee urban planning for their districts. In metropolitan areas, urban development authorities currently hold city planning power. Source: Indian Express In Detail: Text of the Act


The Haryana cabinet approved the Haryana Alternative Tax Compliance Scheme for Contractors, 2016. The scheme is meant to facilitate timely collection of taxes from developers and builders for the period prior to April 1, 2014. Developers will be allowed to settle ongoing tax litigation with the government by paying a flat tax of 1.05 percent. Source: Hindu Business Line

Haryana will set up district-level IT labs to be used for computerization and digitalization of data, Aadhaar seeding, basic computer training, and other e-governance initiatives. Source: Daily Pioneer


Bengaluru, the capital and largest city of Karnataka, was engulfed in violent protests on September 12 against a Supreme Court decision forcing Karnataka to share the waters of the Cauvery River with Tamil Nadu. Protestors blocked major arteries and burnt dozens of city buses. Police killed one protestor and arrested hundreds more. Source: The Hindu, NDTV

The Supreme Court reduced the amount of water from the Cauvery River that Karnataka has to release to Tamil Nadu, lowering it to 12,000 cubic feet per second (cusecs) per day from 15,000 cusecs a day. Karnataka is required to maintain this rate of flow until September 20. Source: Economic Times


The Madhya Pradesh finance minister announced that the state would implement the pay raises recommended by the 7th Pay Commission in the current financial year. The state will also give nearly 50,000 day laborers permanent contracts. Source: Business Standard


The Maharashtra government will amend the new Maharashtra Protection of Internal Security Act in response to a public outcry over controversial clauses. The new draft will raise the cap on public gatherings that do not require a police permit to 2,500 people (up from 100) and make clear that private functions such as weddings do not need to receive prior permission. Source: The Hindu

Maharashtra will receive $2.5 billion in central assistance for irrigation projects under the Accelerated Irrigation Benefit Program and other government schemes. Source: Indian Express

The central government has sanctioned about $30 million to upgrade Nagpur’s power infrastructure. The funds will be used to build five new substations. Source: Economic Times


The state government has approved a dedicated road safety fund which will be used to fund driver training, safety audits, and improvement of safety infrastructure. The fund will be financed from road safety fines. Source: Business Standard

The National Highways Authority of India (NHAI) has awarded a $123 million highway project in the Dausa, Tonk, and Jaipur districts of Rajasthan to PNC Infratech. Source: Business Standard


Nothing critical to report this week.


An Apex Council to address Krishna River water-sharing disputes will meet in New Delhi on September 19, with the chief ministers of Andhra Pradesh and Telangana in attendance. The council was constituted under the provisions of the Andhra Pradesh Reorganization Act to address disputes over the sharing of river waters and new irrigation projects. Source: The Hindu


Uttar Pradesh has introduced a Twitter-based customer service tool, Twitter Seva, for its police force. Citizens will be able to tweet directly at the general police account with complaints and one of the 122 official police accounts will respond. Source: NDTV

The Uttar Pradesh government has decided to create an intra-government ‘IT cadre’ by promoting bureaucrats with IT experience and offering them salary bonuses. The government directed the principal secretaries of all departments to nominate two IT experts in their department with the rank of special secretary and joint secretary. Source: NDTV

Union Minister of Electronics and Information Technology Ravi Shankar Prasad announced a slew of digital infrastructure initiatives to be undertaken by CSC e-Governance Services India Ltd (CSC). CSC will provide electronic legal services through common services centers. CSC also announced an agreement with Tata Consultancy Services Ltd and Siemens to provide skill development courses. Source: Indian Express


Representatives of automobile manufacturer BMW and the West Bengal government held talks in Germany regarding six proposals for BMW investment in the state, including component manufacture, shared services, and vehicle manufacture. Source: The Hindu

The ruling Trinamool Congress took control of the Murshidabad district council from the Congress after ten council members switched their affiliations. The Trinamool Congress now controls all of the state’s district councils. Source: Economic Times

West Bengal will disinvest from state-run Durgapur Chemicals. The state secretariat made the decision in light of the company’s poor fiscal health. Source: Business Standard

The West Bengal government may suspend the licenses of app-based cab operators such as Uber and Ola if they do not comply with regulations to improve passenger safety by September 15. The state’s transport department has mandated that all taxis be fitted with cameras and a panic button. Source: Livemint

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