Update on India’s States: November 9, 2016

GST Council proposes 4 rate system; Parliament meets next week; Andhra, Rajasthan rank first and second in World Bank energy efficiency report; Andhra increases subsidy for capital investment in electronics manufacturing; Delhi chokes on pollution; Gujarat is the first state to notify regulations under Real Estate Act; Haryana chief minister gives up real estate approval authority; Maharashtra cuts approvals in hospitality sector; Tamil Nadu seeks path to join UDAY bailout.

Center-State relations

As of November 1, the National Food Security Act, which creates an entitlement to subsidized food grains for those below a certain income level, covers every state in the country. Kerala and Tamil Nadu were the last two states to agree to implement the provisions of the act. Source: Business Standard

Central representatives on the Goods and Services Tax (GST) Council proposed a four-rate structure for the new tax, with an additional cess on luxury goods and zero-rating for essential items such as food. The proposal has not yet been finalized, however, as West Bengal and Kerala oppose the structure. The Council will meet again November 10 to discuss rates and dual control of administrative functions. Source: The Hindu, Business Standard

A new World Bank report on energy use patterns in Indian states ranked Andhra Pradesh first in ‘Energy Efficiency Implementation Readiness.’ Rajasthan was a close second. The report’s recommendations for improving energy efficiency implementation included setting realistic targets, introducing concrete and sector-specific energy efficiency policies, and working with urban government institutions. Source: Economic Times

Andhra Pradesh raised the subsidy on capital investment in electronics manufacturing to 30 percent with a cap of $37.5 million, up from 10 percent with a cap of $748,000. Source: Business Standard

Nothing critical to report this week.

The Delhi government announced measures to combat the crippling air pollution that has engulfed the city, including closing down schools, halting construction and ordering that all roads be doused with water to settle dust. New Delhi, one of the world’s dirtiest cities, saw its levels of PM2.5 — tiny particulate matter that can clog lungs — soar to over 900 micrograms per cubic meter on Saturday, more than 90 times the level considered safe by the World Health Organization. Source: Daily Mail

Gujarat became the first state to notify regulations under the new national Real Estate (Regulation and Development) Act. Contrary to the language of the bill, which includes any and all residential construction currently underway, Gujarat’s rules exempt all projects launched before the act was passed. Source: Economic Times, Economic Times

Chief Minister Manohar Lal Khattar has scrapped a decades old policy giving the state’s chief minister final say in the grant of licenses to developers. Khattar will return control over licensing decisions to the Director, Town and Country Planning. Source: Money Control

Haryana Power Generation Corporation Limited has commissioned the first 10 megawatt (MW) solar power plant at Panipat Thermal Power Station. Source: Economic Times

Nothing critical to report this week.

Maharashtra cut the number of permissions required for project approval in the hospitality sector from 70 to 41. Chief Minister Devendra Fadnavis directed the state’s departments to further bring down the permissions from 41 to 34 within a month. Source: Indian Express

The Maharashtra Electricity Regulatory Commission has rejected the Maharashtra Electricity Distribution Company’s proposal for an average 5.5 percent increase in the electricity tariff for 2016-17 but has allowed a moderate hike of 1 to 1.3 percent for residential consumers for the current year and also for every fiscal year up to 2020. The residential tariff for Below Poverty Line consumers has also been extended to consumers with a sanctioned load up to 0.25 kilowatt (KW), as opposed to the earlier limit of 0.1 (KW). Source: Business Standard

Rajasthan is setting up an independent authority to verify and guarantee land titles in its cities, a move meant to speed up property transactions, free up the courts and boost urban development. Its creation comes after the northwestern state passed the Rajasthan Urban Land (Certification of Titles) Bill in April — the first state in the country to do so. Source: Economic Times

State-run NHPC announced it had commissioned a 50 MW wind power project in Jaisalmer, Rajasthan. The project consists of 25 wind turbine generators with 2 MW capacity each. Source: The Hindu Business Line

The center and the Tamil Nadu government are searching for a compromise that will allow the state to join the Ujwal DISCOM Assurance Yojana (UDAY) scheme for restructuring state discom debt. The Tamil Nadu government has stated that it will join the scheme only if it is allowed to exceed the cap on state debt for 15 years, rather than the two years other states are being allowed, and that it will take over only 22 percent of its discoms’ debt, rather than 75 percent. Source: The Hindu Business Line

Chief Minister K. Chandrasekhar Rao has mandated that each district in the state establish an Urban Development Authority to grant construction approvals and to ensure that new development follows planning guidelines. Source: Deccan Chronicle