PM Narendra Modi’s competitive federalism appears to be taking firm roots across states and the upcoming budget must support this to usher in a state-led growth model.
Prime Minister Narendra Modi’s competitive federalism appears to be taking firm roots across states and the upcoming budget must support this to usher in a state-led growth model.
Unaffected by the political deadlock in Parliament in clearing critical reform Bills including the Goods and Services Tax (GST), the competitive federalism that Prime Minister Narendra Modi has talked about appears to have been gaining firm grounds now with states like West Bengal and newly-created Andhra Pradesh taking the lead in offering a helpful environment for the companies to set up their businesses.
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The reforms in land acquisition, labour laws and procedural simplifications are spreading like wildfire, and are not limited any more to Gujarat, Maharashtra, Rajasthan, Haryana, Tamil Nadu or Madhya Pradesh.
There can’t be a better example to show this than the West Bengal Chief Minister Mamata Banerjee urging the industry leaders to not waste time in waiting for the election results and invest in the state which will work as their employee, at the Bengal Global Business Summit in Kolkata.
In fact, the presence of Finance Minister Arun Jaitley along with his three other cabinet colleagues and top business leaders, including Reliance Industries Limited chairman Mukesh Ambani in the event, in itself, indicates the change in the image of the state that has been known for labour unrests till recently.
The chief minister of the state is now claiming, “Bengal is performing. The state is ahead on every count, especially development parameters… There is big scope and hope in Bengal. There is cheap labour, sufficient power, skilled manpower. We have a land bank, suitable policies for textile, industry”.
Though how far the investors are ready to believe this will only be visible in the actual investments coming to the state, and not just the customary MoUs that get signed in such events, the approach of the state government shows a welcome change from the Singur experience of the Tata Nano.
Another state emerging as a possible major investment destination is Andhra Pradesh led by Chief Minister N Chandrababu Naidu.
Speaking at the inauguration of the CII’s Partnership Summit, he also spoke on the lines of Mamata Banerjee in terms of making available the necessary resources and policy framework and promised all clearances to set up a business in flat 21 days in the state.
The state ranked second in taking the ease of doing business steps behind Gujarat, has formulated a Single Desk Policy 2015-20 to create a facilitative ecosystem to provide all clearances/approvals within 21 working days to set up an industry.
The mechanism provides for state clearances required for starting an industry across pre-establishment and pre-operation phases and a chief minister’s dashboard has been designed as a tool for effective monitoring.
Going by the reform moves in different states, it will not be surprising if the investment map of India gets altered significantly going ahead, and interestingly, that may be a big achievement for the NDA government led by PM Modi at the Centre.