The row in Maharashtra over spiriting away employment-generating projects to Gujarat and elsewhere is getting louder by the day. One can’t help feeling the BJP high command has scored a self-goal. There will be short-term benefits vis-à-vis the coming Gujarat elections, but Maratha ‘national’ pride seems to quite bruised over the brouhaha. It might prove costly in the long run for the BJP.
In the last few weeks and months, sample what has happened:
-- The mining giant Vedanta and Taiwan’s world No.1 chip manufacturing company, Foxconn sealed an agreement mid-September to set up a semi-conductor plant in Gujarat. The earlier coalition Shiv Sena government had been pursuing talks with the alliance to set up base in Maharashtra’s Talegaon area, close to Pune, but a last-minute nudge from the Centre, pushed the Rs 1.54 lakh project out of Maharashtra.
-- Weeks later, on October 30, Prime Minister Narendra Modi laid the foundation stone for the Rs 22,000 crore Tata Airbus C-295 aircraft manufacturing facility in Vadodara, Gujarat. This was after the Tata Airbus team had almost finalised a deal with the previous Maharashtra government for the project to come up in an industrial belt, near Nagpur.
-- And finally: days after the loss of the Tata-Airbus project to Gujarat came the news on October 31 that Safran, the French manufacturer of commercial aircraft engines, had decided to shift its project from Nagpur to Hyderabad.
The Opposition has done its math and is hurling it at the BJP. Voices like Aditya Thackeray estimate Maharashtra’s loss at about Rs 2 lakh crore in investment and perhaps an opportunity loss of 1.5 lakh direct jobs. BJP spokespersons on the other had say there has been no arm-twisting, and the choice of location has been a commercial decision of the investors.
There has obviously been some soul-searching in the BJP. It had also to save its local leadership of Devendra Fadnavis and others. Otherwise why should the Prime Minister, addressing a ‘Rozgar Mela’ in Maharashtra on Thursday, announced that the Centre had approved 225 projects for Maharashtra cumulatively valued at over Rs 2 lakh crore?
There is substantial history behind the bruised Maharashtrian pride. Before Maharashtra and Gujarat was carved out from the erstwhile British Raj’s bilingual ‘Bombay Province’ in 1960, an attempt was made by the elite ‘Bombay Club’, run by a clutch of rich Gujarati and Parsi industrialists, to keep the city as a union territory and out of the state reorganization process.
While the ‘Bombay’ government led by Morarji Desai supported the ‘Save Bombay’ group, a broad alliance of left parties – the Communists led by S A Dange, the Socialists represented by S.M. Joshi and Senapati Bapat, a Congress freedom fighter, led the ‘Samyukta Maharashtra’ movement demanding the merger of ‘Bombay’ with Maharashtra.Their case was that a majority of its population was Marathi-speaking and the city’s infrastructure and industry was built by the Marathi working class.
The Morarji Desai government was seen as a representative of crafty Gujarati and Parsi capitalists who wanted to keep the spoils of ‘Bombay’ and condemn the rest of Maharashtra to a state of poverty. The State Reorganization Committee finally accepted the demands and Maharashtra was born with Mumbai as its capital; but not before 106 protestors had perished to police bullets.
It is this old narrative of discrimination at the hands of crafty Gujarati businessmen that is again playing out in the Marathi psyche. The continued backwardness of Maharashtra’s coastal belt sans industrial development, and the slow erosion of Maharashtra as an industrial state from No.1 to No.4 status has revived the spectre of a ‘conspiracy’ to downgrade the state.
Rupture of federalism
There are some natural advantages that Maharashtra has over other states. There is an old ‘industrial’ culture in the Mumbai-Pune urban swathe. Mumbai was where the British set up dozens of cotton mills to support the First World War effort. Over the years, the region has the advantage of an advanced talent pool; and the relatively high income levels offers a lucrative market for commodities and services. So why did so many projects sacrifice these advantages and move out?
The deliberate erosion of Mumbai as a financial center has also not gone unnoticed. The decision of moving the International Financial Services Centre (IFSC) to Gujarat’s GIFT City from Mumbai’s Bandra-Kurla Complex (BKC) in 2020 is one such example.
At a broader level, arm-twisting investors to rejig their choice of location not based on business considerations can have a serious implications on those looking to invest in India. Besides, every state and region offers certain advantages which the Center should not interfere with just because it has the power to issue licenses. We are talking about ‘federalism’ being part of the basic fabric of the Constitution.
A few projects lost to Gujarat will not substantially alter growth prospects of Maharashtra. But in the game of optics, Gujarat’s gain is now seen as Maharashtra’s loss deliberately inflicted by a Machiavellianpolitical class. Somewhere in the future, there could be payback too.