Update on India’s States: September 6, 2017

State debt is rising rapidly; Tamil Nadu conducts the first ever state wind energy auction; Madhya Pradesh to compensate farmers for distress sales; floods displace thousands in Bihar; Mizoram becomes power surplus; and more.

Center–State relations

A new report by the National Institute of Public Finance and Policy expressed concern over the increasing fiscal deficit of state governments, in contrast to central consolidation. The fiscal deficit of all 29 states likely reached 3.67 percent of GDP in the 2016-17 fiscal year. If liabilities related to state assumption of power debt are excluded, the deficit still reached 3.32 percent in the past fiscal year. Source: Business Standard In Detail: NIPFP Policy Brief on State Finances


The Ministry of Housing and Urban Affairs sanctioned 120,894 more affordable houses for Andhra Pradesh under the Pradhan Mantri Awas Yojana, the central home-building scheme. Source: Money control

The Andhra Pradesh Transmission Company (APTransco) hosted a workshop on the development of a state-level energy scenario generator, the first ever such modeling tool for a sub-national entity. Funded by the British High Commission and led by the Federation of Indian Chambers of Commerce and Industry and NITI Aayog, the scenario generator allows the user to model the state’s energy future according to different inputs. Scenario generators for Assam and Gujarat are also in the works. Source: Deccan Chronicle


Around 10,743 Bihar residents are living in 35 relief camps following recent flooding that killed 514 people. The situation is improving somewhat, with some camp residents able to return to their homes and no new casualties reported this week. Source: Indian Express


Nothing critical to report this week.


Inox Wind has secured a contract for a 100 megawatt (MW) wind power project in Kutch for Adani Green Energy. Source: Energy Business Review

Gujarat’s small businesses (SMEs) have been the foremost adopters of new public exchanges meant for SMEs. Of the 72 initial public offerings carried out on SME exchanges this year, 31 were from Gujarat-based companies, more than any other state. Gujarat SMEs raised $58 million through the exchanges. Source: Economic Times

A state tender to procure 1,000 MW of electricity for nine months brought few bids due to a low price ceiling of 4.4 cents per unit. The tender was undersubscribed despite the fact that the government planned to allow the winning bidder to access dedicated coal supplies allocated to state-owned producers. Source: Economic Times


The Haryana government will provide incentives to airlines that agree to fly in and out of Chandigarh’s Hisar airport. Incentives include Viability Gap Funding on 50 percent of seats on flights out of the city; this comes in addition to the central funding for the first 50 percent of seats. Source: Indian Express


Chief Minister Siddaramaiah inducted three new members into his council of ministers ahead of state elections due early next year. The three new ministers have been assigned the portfolios of Transport, Excise, and Sugar and Small Industries. Source: Financial Express

Karnataka has selected the state’s 100 most innovative start-ups following a four-phase contest with 1,700 total entrants. The chosen start-ups will split government funding of $5.4 million and will receive cloud support from Google and Digital Ocean, mentoring from Price Waterhouse Cooper, and banking services from YES Bank & Kotak Bank. Source: Economic Times, Business Standard

The Karnataka cabinet approved the rollout of an Aadhaar-linked universal health coverage program from November 1. The new initiative will merge seven existing programs into a single health system covering 14 million households at a cost of $135 million per year. Source: Hindu Business Line

Madhya Pradesh government launched a new program to combat price risks in agriculture by compensating farmers for distress sales below the national minimum support price (MSP). Compensation will be based on the gap between the MSP and a ‘modal price’—the average price for the crop in Madhya Pradesh and two other states over the preceding two months—and farmers who sell below the modal price will not receive full compensation. The scheme will begin by covering eight crops, mostly oilseeds and pulses, where government procurement is typically low. Source: Livemint

Arinsun Clean Energy Private Limited will develop a 250 MW solar park at a cost of $200 million at the Rewa Ultra Mega Solar Park in Madhya Pradesh with financial support from the International Finance Corporation. Source: Business Standard

A 30-member Australian Smart Infrastructure delegation visited Bhopal to explore business opportunities in Madhya Pradesh’s smart cities initiatives. The group is part of the 150-member Australian business delegation visiting India as part of Australia Business Week in India 2017. Source: Money control

The center approved construction of 145000 affordable housing units under the Pradhan Mantri Awas Yojana, a major boost to Maharashtra government’s ambitious plan to provide affordable homes to all in the state. Source: Free Press Journal

State-owned power sector financier Rural Electrification Corporation signed a Memorandum of Understanding (MoU) for a $2 billion loan to the Maharashtra State Power Generation Company. The money will go to power generation projects, Flue-Gas Desulfurization, and working capital. Source: Economic Times

Nothing critical to report this week.


Tamil Nadu’s 500 MW wind energy auction, the first ever conducted by an Indian state, generated a record low tariff of 5 cents per unit. The lowest bidders in the sale by Tamil Nadu were ReGenPowertech, Leap Green Energy, and public sector mining giant Neyveli Lignite Corp., which offered 5 cents per unit for the entire 500 MW. Source: Economic Times


The Telangana State Electricity Regulatory Commission released the retail power tariff order for 2017-18. The new order makes no change in tariffs for the domestic, commercial, or industrial sectors. Source: The Hindu


The Uttar Pradesh Rajya Vidyut Utpadan Nigam, which is responsible for thermal power stations in Uttar Pradesh, has rejected the National Thermal Power Corporation’s proposal to take over the state government’s 50 percent stake in the 1,320-MW Meja power project in Allahabad. Source: Financial Express

The UP government has decided to install solar-powered LED streetlights in main markets and streets in all development blocks. Uttar Pradesh New and Renewable Energy Development Agency will invite tenders from companies willing to undertake the project with a five-year comprehensive warranty. Source: Hindustan Times


The Central Committee of the Gorkha Janmukti Morcha (GJM), which had declared an indefinite strike to demand a separate Gorkha state, decided to temporarily relax the strike until September 12 to pave the way for dialogue with the West Bengal government. Source: Mumbai mirror

Best of the Rest

Mizoram

The first unit of a 60 MW hydroelectric power plant in Mizoram began generating electricity, making Mizoram the third power-surplus state in northeast India after Sikkim and Tripura. The second half of the project is expected to begin generation in late October or early November. Source: Eastern Mirror Nagaland

Arunachal Pradesh

Arunachal Pradesh had the fastest growing state economy in fiscal year 2015-16 and the fastest rise in per capita income, according to a new dataset taking 2011-12 as the base year. The gross state domestic product expanded 16.5 percent. Jammu and Kashmir was second with growth of 14.7 percent. Source: Hindu Business Line

Kerala

UK-based GJ Nature Care & Energy won the global bid for a waste-to energy project in Kochi. The company will invest $47 million in a 10 MW capacity plant that consumes 330 tons of municipal solid waste per day. Source: Economic Times

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