Update on India’s States: January 27, 2016

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This week, Maharashtra passes new policies reducing inspections, easing land transfer, and allowing direct sales by farmers to retailers; the center extends the deadline for implementing the Food Security Act again; Telangana is getting a National Investment and Manufacturing Zone; Uttar Pradesh extends industrial benefits to tourism sector.

Center-State relations

The center will require all states and Union Territories (UTs), except for Tamil Nadu, to implement the National Food Security Act by April 2016. The law, which creates a legal entitlement to subsidized food, was passed by Parliament in 2013, but so far only 25 of 37 states and UTs have put it into effect. This is the fourth extension of the implementation deadline. Source: Economic Times

Chief Minister N Chandrababu Naidu visited Switzerland to meet with potential investors prior to the World Economic Forum summit at Davos. Swiss solar panel maker Flisom expressed interest in setting up a solar panel manufacturing plant with an investment of $200 million. Source: Hindu Business Line

Krishnapatnam Power Corporation has signed a memorandum of understanding with Andhra Pradesh to build four thermal power plants, with a total capacity of 2780 megawatts and an investment of $2.5 billion. Source: Hindu Business Line

The Indian central government has agreed to invest about $740 million to replace standard agricultural irrigation pumps with energy efficient ones in Andhra Pradesh. More than 20 million pumps will be replaced, achieving energy savings of 46 billion kilowatt hours. Source: The Hindu

The Delhi government has increased taxes on petrol and diesel for the second time this financial year and has added a new pollution tax. The changes raise the price of petrol in Delhi by $0.014 a liter and of diesel by $.007 per liter. Source: Business Standard

Delhi will add 3,000 new buses this year and introduce premium buses to augment public transport. The government is improving public transportation with the eventual goal of re-instituting the odd-even car-rationing scheme. Source: Economic Times

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The Gujarat government announced a new policy for the ship recycling industry that is meant to give a boost to the Alang ship-breaking yard, Asia’s biggest. The policy will allow companies to use ship-breaking plots for ten years (up from five) and will make it easier to resize plots to accommodate larger vessels. Source: Economic Times

Gujarat’s opposition Congress party will introduce a bill during the next session of the Gujarat Assembly to reserve 20 percent of government jobs and seats in public colleges for “economically backward” groups among upper castes. The bill is likely a response to last year’s mass agitation by members of the Patel caste, which does not currently benefit from affirmative action. Source: Business Standard

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Industries in Karnataka have expressed concern over electricity supply companies’ (Escoms) request for a steep hike in power tariffs. Five Escoms have petitioned the Karnataka Electricity Regulatory Commissions (KERC), seeking an increase in power tariffs by more than $0.01 a unit. Source: Hindu Business Line

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The Maharashtra Cabinet approved a new retail policy, which relaxes regulation on small retail shops employing less than 10 people. The new policy ends the random inspection of shops and allows farmers to sell produce directly to retailers without having to pay fees to their local Agricultural Produce Marketing Committee. Source: Business Standard

The Maharashtra government has simplified the procedure necessary to use agricultural land for non-agricultural purposes, authorizing local civic authorities to make the decision as to whether agricultural land can be used for industrial or commercial purposes. Such a change previously required between 22 and 32 permissions from different authorities. Source: Economic Times

The Maharashtra Cabinet agreed to implement the central government’s Deendayal Upadhyaya Gramjyoti Yojana (DDUGJY) and its Integrated Power Development Scheme (IPDS), in a bid to strengthen rural and urban electrification networks. Maharashtra expects to electrify two thirds of the remaining 190,000 households without power. Source: Economic Times 

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The Rajasthan government will launch the ‘Mukhyamantri Jal Swavlamban Abhiyan’ water-efficiency initiative on January 27. The campaign will attempt to improve water availability and make every village self-sufficient in water by improving rainwater collections and irrigation techniques. Source: Economic Times

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The national government will take on nine road projects in Tamil Nadu at an estimated cost of $1.04 billion. These include work on four national highways totaling 65 miles. Source: Financial Express


The center approved the establishment of a national investment and manufacturing zone (NIMZ) at Medak in Telangana and has provisionally approved a pharmaceuticals-focused NIMZ in Hyderabad. Source: Economic Times
Telangana has told the National Thermal Power Corporation (NTPC) that it is willing to buy electricity generated by the NTPC for use by Delhi which the national capital doesn’t require. The move would save Delhi residents the fixed costs they are liable to pay under Delhi’s contract with the NTPC, translating into a savings of one cent per unit. Source: Financial Express

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The Uttar Pradesh government has accorded its tourism sector with industry status; this is designed to promote investment in the sector. The policy allows tourism-focused companies to receive a rebate on local council taxation, as well as subsidized land through the Uttar Pradesh State Industrial Development Corporation Limited. Source: Economic Times

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West Bengal chief minister Mamata Banerjee unveiled Bengal Birbhum Coalfields Ltd (BBCL), a special purpose vehicle created to develop India’s largest coal mine, in the Birbhum district. Banerjee claimed the block will produce coal worth $32 billion and would attract an investment of $3.3 billion. Source: The Statesman

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