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Foxconn to Tata Airbus—Centre babysitting Gujarat, costing Maharashtra big investments


There has been a lot of political debate over Gujarat getting big-ticket investments and Maharashtra losing out on them in the past three or four months. It is important to see the context of some of these debates.

Maharashtra and Gujarat are not just two states. They are neighbours and part of a federal structure. It is the same with states such as Karnataka, Madhya Pradesh and Telangana. And logically, the issues that arise between Maharashtra and Gujarat should arise between the former and its other neighbouring states.

Investments in Gujarat are because of a pre-planned design where the socio-political will is operating in the state’s favour. And this has been the case since Narendra Modi moved out of Gujarat to become the prime minister. Anandiben Patel became the Gujarat CM in place of Modi and she led several campaigns and investment summits in Mumbai to attract business from Maharashtra’s capital city to Gujarat.

Maharashtra-Gujarat competition runs deep

Maharashtra and Gujarat have been historically competitive. In 1960, when Maharashtra was carved out as a separate state, there was a demand that Mumbai should be the capital of two states—Gujarat and Maharashtra. But, the people of Maharashtra were strongly opposed to it.

For the migrants from the drought-prone villages of western Maharashtra, those who left their villages due to caste conflicts to be more accepted in an urban environment, or the villages in regions such as Konkan, whose economy was completely dependent on Mumbai, it was imperative that Mumbai stays a part of Maharashtra.

Maharashtra evidently won that territorial battle. Since then, the state has had to coordinate with consecutive central governments. For years, across governments, Maharashtra has always had a constant complaint about not getting back as much as the state gives in terms of taxes. The devolution of taxes to Maharashtra and the infrastructure investments by the central government in Maharashtra have not been commensurate with how much the state gives.

But, there was never a blatant complaint about any one state getting all coveted businesses and investments like how Gujarat is now been accused.

During Atal Bihari Vajpayee’s government LK Advani was a Union minister from Gujarat. But it never felt that Gujarat was getting any special treatment.

Even then things were not hunky-dory. At the time, the Shiv Sena consistently highlighted how the BIMARU states (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) were creating an additional burden on Mumbai. It was always a sore point.

Moving industries to Gujarat at the cost of Maharashtra is like amputating a part of the state’s body. For instance, the Centre’s decision in 2015 of having an international finance centre in Ahmedabad instead of Mumbai was a jolt to Maharashtra.


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Centre babysitting Gujarat

When Narendra Modi became the prime minister after a long term as CM of Gujarat, voters from Maharashtra expected his experience to help in Maharashtra’s development. I was the coordinator for one of Modi’s rallies in Pune and there he promised to set up robust institutions related to finance and planning in Maharashtra. He had lauded institutions such as the Gokhale Institute of Politics and Economics and the National Institute of Bank Management.

However, when he got elected in 2014 things turned out differently. On one hand, he gave Rs 78,000 crore for an International Financial Services Sector in Ahmedabad in the form of GIFT City. On the other hand, the Centre announced a gems and jewellery cluster and a diamond bourse in Gujarat, threatening businesses in Maharashtra.

Then in 2017, a Marine police training institute was shifted to Gujarat’s Dwarka from Maharashtra’s Palghar. In 2022, Gujarat officially got some major investments such as the Vedanta Foxconn semiconductor plant at Dholera, a Bulk Drug Park at Bharuch and now the Tata Airbus manufacturing unit.

In September this year, Maharashtra also lost out on the Centre’s support to build a medical devices plant at Aurangabad. A proposal from Himachal Pradesh was approved instead.

What does all this mean? Does the Centre think that Maharashtra is completely developed and does not need any more investments? It is not. On the Human Development Index level, Maharashtra has always been somewhere in the middle, around rank five or six. If you take away Mumbai’s revenue, Maharashtra is left with little. Districts in Vidarbha, Marathwada, and the tribal districts of Nandurbar and Dhule, all need employment opportunities and investments.

It is not that Gujarat’s infrastructure is any better or that the state government there has shown any more political will than the government in Maharashtra. The problem is that Gujarat is being babysat like a child in the lap of the Indian government and the Centre is being unfair to other states. This is challenging to democracy.


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Maharashtra’s advantages

In the 1990s, when the liberalisation and globalisation process began, Maharashtra was at the forefront of attracting companies from different sectors such as information technology, banking, manufacturing, medical facilities, agro-industries and even set up a sound structure of cooperative industries. There have been several water conservation experiments in Maharashtra. The concept of an employment guarantee scheme was something that Maharashtra has given to the country. In fact, Maharashtra has always set the direction for the country in best practices.

Maharashtra also has some clear advantages compared with other states. There is a good socio-economic ecosystem with good schools and hospitals close to industrial hubs. It is among the leading states in safety for women.When there was an attempt by the Uttar Pradesh government to lure Mumbai’s film industry, many industry insiders told me that they feel safer working in Mumbai. When a woman artist works, it creates employment for three more women—the hair stylist, the make-up artist and the costume stylist. All of them can wrap up work as late as 10 pm and 11 pm and go home, safely.

Mumbai’s excellent connectivity also is a big advantage. Some of the credit for this also goes to the Centre, the civil aviation ministry and leaders like Nitin Gadkari.

Every state needs to develop infrastructure and give employment to its people, and all states should be given the opportunity to do that. We need to have a collaborative approach instead of pitting states against each other to get investments. There can be one industry in one state and an allied industry in another. There can be technology sharing and states will work for each other in solidarity. But there is no comprehensive national perspective and states are getting busy having to compete with each other. This way, they are also losing out against international players. The resulting development is bound to be a hotchpotch.

Neelam Gorhe is a deputy leader in the Shiv Sena and deputy chairman of the Maharashtra legislative council. This article was told to ThePrint’s Manasi Phadke. 

(Edited by Ratan Priya)





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