India: Modi tightens grip as battle looms in powerful states

  • Narendra Modi’s steady conquest of state governments and his drive to unify taxes across the country are fueling a new competition between provincial chief ministers for investment in factories, businesses and jobs that is redrawing the country’s industrial map.
  • The ruling Bharatiya Janata Party has extended control to a record 18 states, representing roughly 60% of India’s gross domestic product. That’s allowing Modi to erode decades of fighting between the central government and provincial leaders, who are responsible for everything from providing industrial land to law and order.
  • While Modi’s lack of a majority in the upper house of parliament hinders his ability to implement change at the federal level, the state-level victories give him the chance to speed up reforms like land acquisition and labor laws across a large part of the country.
  • And by forcing even non-BJP chief ministers to compete for investment by providing infrastructure and cutting bureaucracy, rather than through tax breaks and corruption, businesses are being encouraged to invest in states that previously had little to offer.
  • The BJP has spread across India at a remarkable rate. In March, it came to power in Uttar Pradesh, India’s most populous state with 200 million people, as well as in the smaller states of Goa and Manipur.
  • In Jul 17, the BJP helped form the government in Bihar, a state of 100 million, after a governing coalition collapsed. Polls suggest the BJP will retain power in Gujarat in elections in Dec 17 and could wrest control of mountainous Himachal Pradesh from the opposition Congress party.
  • “What are left are the more difficult states — West Bengal, Kerala, Tamil Nadu — where our presence has been negligible at best,” said Yashwant Sinha, a senior party leader who was finance minister in a previous BJP government.
  • BJP or not, with states still wielding so much power, investors suggest the quality of the local chief minister is a big factor in a state’s performance.
  • “Whether it’s a BJP state or a Congress state or a whatever state, it’s leadership that delivers results,” said Salil Singhal, a businessman who works in both Rajasthan and Gujarat. “There is now a competition among the states to say, ‘Things are better here than elsewhere, so come and invest in my state.'”

External Link : https://economictimes.indiatimes.com/news/politics-and-nation/new-battle-looms-in-powerful-states-as-pm-narendra-modi-tightens-grip/articleshow/61909157.cms

4-Dec-2017


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