The CSIS Wadhwani Chair in U.S.-India Policy Studies is pleased to issue the fifth edition of our new “Update on India’s States” weekly newsletter. This week: Canada’s pension system is building homes in Mumbai; Telangana’s selling land online; the Center is trying to get a handle on power generation debt, and more…
Big News
The Union government is set to place strict limits on borrowing by state-run power distribution companies (discoms). Under a financial restructuring program, the average national aggregate transmission and commercial (AT&C) losses will be fixed at 15 percent by 2018-19. The government is also working to reduce discom losses from the current level of $9.2 billion a year. Source: Business Standard
The Delhi government will appeal a Delhi High Court order quashing the planned audit of three private power distribution companies by India’s Comptroller. Source: The Economic Times
Uttar Pradesh chief minister Akhilesh Yadav carried out a cabinet reshuffle in an attempt to appeal to development-oriented voters in the run-up to 2017 assembly polls. Yadav brought in 12 new ministers, most of them from backward castes and minorities, while elevating eight junior ministers with records as high performers. Source: The Economic Times
The Maharashtra government, which carries debt of over $46 billion, is seeking a loan of $5 billion to pay for improvement of infrastructure and drought relief and is considering borrowing from foreign nations. Source: The Hindu Business Line, The Economic Times
Canada’s pension fund is ready to invest $2 billion in affordable housing in Mumbai, said Maharashtra Chief Minister Devendra Fadnavis, in a move that would boost Prime Minister Narendra Modi’s goal of providing cheap housing to millions of people. The Canada Pension Plan Investment Board opened an office in Mumbai this month. Source: The Economic Times
The Telangana government has decided to engage the services of MSTC Ltd, a government-owned auction house, to e-auction government lands. The government has decided to dispose of government land, located in various prime areas of Hyderabad and Rangareddy districts, that is lying idle and not required for any public purpose. Source: The New Indian Express
Center-State Relations
A report by the Confederation of Indian Industry and PricewaterhouseCoopers found that the proposed Goods and Services Tax (GST), if well-implemented, will result in a substantial reduction in logistical costs. The current logistics network, which uses smaller warehouses to save on state taxes, has resulted in higher costs and increased inventory levels. Source: The Economic Times
The Union government is set to place strict limits on borrowing by state-run power distribution companies (discoms). Under a financial restructuring program, the average national aggregate transmission and commercial (AT&C) losses will be fixed at 15 percent by 2018-19. The government is also working to reduce discom losses from the current level of $9.2 billion a year. Source: Business Standard
A delay in obtaining environmental clearances from the National Green Tribunal has slowed construction work on the new capital city, Amaravati. Andhra Pradesh is lobbying the central government to free up more than 45,000 acres of forest land for the city’s construction. Source: The Hindu, The Hindu
YSR Congress Party chief and leader of the opposition Y.S. Jaganmohan Reddy said that he would launch a legal challenge to the state government’s purchase of land for the new capital at Amaravati, alleging that that the government acquired land despite local opposition. Source: The Hindu
Four Indian cell phone manufacturing companies – Micromax, Celkon, Karbonn and Lava – have committed to constructing manufacturing and assembly units at a single industrial park near Tirupati. Source: The Hindu
Three Andhra Pradesh officials held discussions on urban planning, administration, and beautification with officials of the Urban Planning Bureau of Suzhou, a city in Western Shanghai in China. The talks focused on methods of solid waste management. Source: The Hindu
The Andhra Pradesh government reduced excise duty and value-added tax (VAT) on inexpensive liquor to make it more affordable and boost sales. Improved sales are expected to contribute an additional $300-450 million in annual government revenue. Source: Business Standard
The Congress Party demanded that the Municipal Corporation of Delhi – controlled by the Aam Aadmi and Bharatiya Janata Parties – hold byelections for 13 vacant municipal council posts, charging that both the parties are “avoiding” the elections as they feared defeat. Source: The Economic Times
The Delhi government will appeal a Delhi High Court order quashing the planned audit of three private power distribution companies by India’s Comptroller. Source: The Economic Times
Delhi chief minister Arvind Kejriwal gave five ministers a week to submit action plans for eliminating corruption in their departments. A recent report found that 45 percent of Delhi residents believe that there has been a decrease in corruption in the state government, but that corruption persists in some departments. Source: The New Indian Express
The Gujarat High Court directed the State Election Commission to include the option of “NOTA” (none of the above) on the ballot for the upcoming local elections. Source: The Economic Times
Gujarat chief minister Anandiben Patel urged the central government to lift its moratorium on further expansion of three severely polluted industrial areas. Patel intends to take the matter up with the Union ministers during her visit to New Delhi on November 6. Source: The Hindu Business Line
Karnataka chief minister S Siddaramaiah added four members to his cabinet, including local Congress Party magnate G Parameshwara, in a long-awaited reshuffle. After coming under pressure from national Congress leaders, Parameshwara agreed to join the cabinet even though he did not receive the post of deputy chief minister. Source: Business Standard
The Karnataka government plans to spend $153 million in central urban revitalization funds on Bengaluru. The city was not selected for the central Smart City initiative. Source: The Hindu
Karnataka’s Minister for Large and Medium Industries and Tourism R V Deshpande met with Japanese Ambassador Takeshi Yagi in New Delhi to request that Japan act as a partner country for the upcoming ‘Invest Karnataka’ event and bring a business delegation. ‘Invest Karnataka’ is scheduled to take place February 3 to 5, 2016. Source: The Hindu Business Line
Shiv Sena emerged as the largest party in the Kalyan-Dombivali Municipal Corporation but failed to reach a majority in elections held November 1. Source: The Hindu
Maharashtra chief minister Devendra Fadnavis said that the BJP alliance with Shiv Sena would last five years, adding that the two parties would jointly contest the 2017 Mumbai civic elections. Source: The Economic Times
The Maharashtra government, which carries debt of over $46 billion, is seeking a loan of $5 billion to pay for improvement of infrastructure and drought relief and is considering borrowing from foreign nations. The state government hopes to obtain loans at a 4 percent interest rate but wants to repay its lender in rupees. Source: The Hindu Business Line, The Economic Times
Canada’s pension fund is ready to invest $2 billion in affordable housing in Mumbai, said Chief Minister Fadnavis, in a move that would boost Prime Minister Narendra Modi’s goal of providing cheap housing to millions of people. The Canada Pension Plan Investment Board opened an office in Mumbai this month. Source: The Economic Times
The Maharashtra government has offered a slew of incentives to persuade Foxconn to invest $5 billion in the state. The state government has offered to help Foxconn seek loans at preferred interest rates from financial institutions, with a payment moratorium of 10 years. Source: Business Standard
Chief Minister Fadnavis said that the state government has brought the state’s bureaucrats into line and that 70 percent were now cooperating with the government. The government has initiated administrative actions against 800 bureaucrats, dismissed 50, and initiated criminal proceedings against 300 more. Source: The Economic Times
State power generation utility MahaGenco plans to increase its solar generating capacity to 2,500 MW from 180 MW in the next three to five years. MahaGenco estimates that the project will require a total investment of $2.3 billion from both public and private-sector entities (a per-MW cost of $900,000) and 12,500 acres of land. Source: Business Standard
The Rajasthan government has signed agreements worth over $23 billion with companies in the solar, mining, textiles, and petroleum sectors in advance of the Resurgent Rajasthan Partnership Summit. In particular, the state has received investment proposals in the textile sector worth up to $770 million. The Summit will be held in Jaipur on November 19 and 20. Source: The Economic Times
Rajasthan chief minister Vasundhara Raje said work would soon begin on a long-planned oil refinery in the Barmer district. She blamed the delay on the need to renegotiate the agreement signed by the previous Congress-led government, which gave the state only a 26 percent share in the project. Source: Deccan Herald
The Tamil Nadu government chose fifty villages with acute water scarcity to participate in the central government’s ‘Jal Gram’ scheme, which aims to achieve water surplus through integrated development and water conservation measures. Source: The Hindu
Finance Minister O. Panneerselvam said that food production had increased to 130,000 tons from last year’s 70,000 tons, despite a drought in the state, owing to meticulous planning and effective implementation of agriculture schemes. Source: The Hindu
The Telangana government has decided to engage the services of MSTC Ltd, a government-owned auction house, to e-auction government lands. The government has decided to dispose of government land, located in various prime areas of Hyderabad and Rangareddy districts, that is lying idle and not required for any public purpose. Source: The New Indian Express
The Ambassador of the Netherlands to India, Alphonsus Stoelinga, met with Telangana chief minister K Chandrasekhar Rao to discuss business opportunities in the agricultural sector. Ambassador Stoelinga told Rao that the Netherlands was interested in investing in agriculture, healthcare, and tourism in Telangana. Source: The New Indian Express
Chief Minister Rao met with Union Home Minister Rajnath Singh and asked him to expedite the process of bifurcation of the former Andhra Pradesh High Court. Source: The New Indian Express
The by-election for the Warangal Lok Sabha seat will take place on November 21, with the vote count set for November 24. Source: The Hindu
Chief Minister Rao once again asked Union Finance Minister Arun Jaitley to increase the state’s borrowing limit under the Fiscal Responsibility and Budget Management Act. The state government has been asking for an increase in its borrowing limit for over a year. Source: The Hindu
Uttar Pradesh chief minister Akhilesh Yadav carried out a cabinet reshuffle in an attempt to appeal to development-oriented voters in the run-up to 2017 assembly polls. Yadav brought in 12 new ministers, most of them from backward castes and minorities, while elevating eight junior ministers with records as high performers. Source: The Economic Times
In a major setback to Uttar Pradesh’s ruling Samajwadi Party, relatives of many ministers and senior leaders were defeated in elections for thousands of town council seats across the state. The Bharatiya Janata Party also made a poor showing, a disappointment for party leaders after their historic results in Uttar Pradesh in the 2014 national elections. Source: Zee News
West Bengal chief minister Mamata Banerjee alleged that the Modi government was undermining her state’s development by cutting funds for various projects. Banerjee accused the Center of missing “huge employment opportunities” by failing to disburse promised funds. Source: The Hindu
The Union Road Transport Secretary praised the West Bengal government for its support in procuring land for highway projects in the state. Source: Zee News
Chief Minister Banerjee will meet a Chinese delegation in Kolkata on November 5, increasing the chance that a Chinese delegation will attend the Bengal Business Summit in January 2016. West Bengal’s Finance, Commerce, and Industry Minister Amit Mitra visited China earlier in 2015 to showcase the state’s recent strides in infrastructure and power development. Source: The Economic Times
