Maharashtra white paper contests narrative of mega projects exiting state

In a bid to challenge the narrative about mega industrial projects being wooed by Maharashtra eventually shifting to neighbouring states like Gujarat, the Eknath Shinde government has tabled a white paper in the state legislature, stating that the claims of the Opposition Maharashtra Vikas Aghadi (MVA) did not hold true. The 12-page document, which was tabled on August 3, obliquely blamed the erstwhile MVA regime for big-ticket projects choosing to drop anchor in other states.

The MVA, especially Shiv Sena (Uddhav Balasaheb Thackeray) leader Aaditya Thackeray, who was the environment minister in the coalition regime led by his father Uddhav Thackeray, had attacked the Shinde-BJP government over major industrial investments choosing neighbouring Gujarat after initially showing interest in Maharashtra. This flight of investments had led to the Opposition building a narrative about the Shinde government being subservient to the BJP top brass in Delhi, which hails from Gujarat. This charge may come to haunt the ruling combine in the forthcoming polls, especially in Mumbai and surrounding areas in the Mumbai Metropolitan Region (MMR), where politics is polarised around linguistic identities and ethnicity.

The white paper, which was tabled by industries minister Uday Samant, covers four major projects, namely the Vedanta-Foxconn semiconductor plant (Rs 1.54 lakh crore), the bulk drug park (Rs 5,000 crore), the SAFRAN maintenance, repair and overhaul hub (MRO) (Rs 1,234 crore), and the Airbus-Tata aircraft manufacturing plant (Rs 22,000 crore).

The document said that the high-power committee (HPC) of the state government, under the then chief secretary, had met on March 17, 2022, but did not take up any issue related to the Vedanta-Foxconn project. However, the HPC’s meeting on July 15, 2022, saw a decision being taken on the issue of concessions for the project. This included Rs 38,000 crore worth of capital incentives and concessions being granted, such as in allocation of land, stamp duty, electricity and water.

“The state government was taking extra efforts to bring the Vedanta-Foxconn project to the state as it would create a minimum of 100,000 jobs and boost the economy. Vedanta had contacted other states along with Maharashtra. The memorandum of understanding (MoU) for investing in Maharashtra was yet to be inked. The HPC’s meeting on July 15, 2022, saw decisions being taken on granting special concessions to the company. The cabinet sub-committee has the authority to go beyond these concessions granted by the HPC and give extra concessions. However, the company decided to erect the project in Gujarat before the meeting of the cabinet sub-committee was held. Since the company had not signed the MoU with the Maharashtra Industrial Development Corporation (MIDC) or the state government, it will not be proper to say that it shifted out of Maharashtra,” the white paper said.

Taiwanese manufacturer Foxconn has since terminated its joint venture plan with Vedanta for the chip-making plant, but the Gujarat government is in discussions with Foxconn regarding the set-up of a semiconductor plant.

On the Tata- Airbus project, which will come up at Baroda in Gujarat, the white paper noted that the company had not signed any MoU with the MIDC nor written to it seeking land. There was no communication between the state industries department and the company. Hence, it was not right to state that the project migrated from Maharashtra to another state. The white paper made a similar mention about the SAFRAN project, which is scheduled to come up in Hyderabad.

The white paper added that while the state’s proposal for the bulk drug park was not approved by the Union government, it was executing it through its own funds and that land acquisition was underway. While 13 states, including Maharashtra, had submitted proposals for bulk drug parks, the Union government had approved those of Gujarat, Himachal Pradesh and Andhra Pradesh.

However, Aaditya Thackeray claimed that the white paper was a vindication of how the industry “has no confidence in the politically unstable state” after Shinde toppled the MVA government in June 2022 and allied with the BJP. The white paper had exposed how industries had been “sent to another state” after Shinde came to power, he charged.

Thackeray added that the white paper had not touched upon two projects that had shifted their proposed investments from Maharashtra to other states, namely the medical devices park and the solar energy equipment park. He stated that while the state government had claimed that an investment larger than the Vedanta-Foxconn project was likely to come to Maharashtra, no mention of this had been made in the white paper. “All in all, I wonder whether this report was released to rub salt on the wounds of the unemployed youth in Maharashtra..,” charged Thackeray.

In a bid to overcome this narrative, the state government is also planning to hold the ‘Magnetic Maharashtra’ investment summit in Mumbai around October-November, in the run-up to the Lok Sabha and assembly polls in 2024.

The first edition of the Magnetic Maharashtra investment summit was held at Mumbai’s Bandra-Kurla Complex (BKC) in February 2018. ‘Magnetic Maharashtra: Convergence 2018’ saw 4,106 investment commitments, worth Rs 12.1 lakh crore, being inked. Two years later, the MVA government held the second edition of the summit, and it was claimed that 56 MoUs, worth Rs 1.29 lakh crore, were signed.

According to the ‘Economic Survey of Maharashtra 2022-23,’ by November 2022, Gujarat had approved 168 industrial projects with an investment of Rs 98,159 crore and Karnataka 97 projects with Rs 68,931 crore worth of investment. In contrast, Maharashtra saw investments to the tune of Rs 35,870 crore from 211 projects. The figures include investments like 100 per cent export-oriented units, investments through the industrial entrepreneurs memoranda, and the letter of intent routes.

Incidentally, Maharashtra had pipped both Gujarat and Karnataka in 2021 when it came to attracting industrial projects. Then, it saw 273 investments to the tune of Rs 2.77 lakh crore, while the figures for Gujarat and Karnataka were far lower—214 projects and Rs 92,566 crore and 114 projects worth Rs 61,726 crore, respectively. In 2020, Karnataka had stolen a march over Maharashtra and Gujarat. It saw approvals for 120 industrial projects worth Rs 1.62 lakh crore, followed by Gujarat (Rs 46,141 crore, 220 projects) and Maharashtra (Rs 44,188 crore, 296 projects).

However, there is some succour for Maharashtra as it historically leads in attracting FDI inflows. Maharashtra saw cumulative foreign direct investment inflows of Rs 10.8 lakh crore from April 2000 to September 2022, which was 28.5 per cent of all foreign investment inflows (about Rs 38.2 lakh crore) into India. In contrast, Karnataka and Gujarat were at a lower Rs 5.5 lakh crore (14.4 per cent) and Rs 3.6 lakh crore (9.7 per cent), respectively. Since the adoption of liberalisation policy in August 1991, a total of 21,442 projects, with an investment of Rs 17.4 lakh crore, were approved up to November 2022 in Maharashtra.

Subscribe to India Today Magazine