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Pawar to PM: Drop politics, don’t undermine Mumbai

Appeal to go by merit and change ‘erroneous decision’ to set up IFSC in Gandhinagar
On Saturday, Sharad Pawar wrote to Narendra Modi listing the advantages Mumbai has and stressing the overwhelming sentiment among the business community in favour of having the IFSC in India’s financial capital.

Our Special Correspondent   |   New Delhi   |   Published 03.05.20, 11:11 PM

Nationalist Congress Party chief Sharad Pawar has appealed to Prime Minister Narendra Modi to rise above partisan politics and exhibit “true statesmanship” to establish the proposed International Financial Services Centre in Mumbai instead of Gandhinagar in Gujarat.

The Centre had issued a gazette notification on April 27 approving Gandhinagar’s choice after a protracted tussle between the BJP and Maharashtra parties over Mumbai being denied the IFSC.

On Saturday, Pawar wrote to Modi listing the advantages Mumbai has and stressing the overwhelming sentiment among the business community in favour of having the IFSC in India’s financial capital.

He suggested the Gandhinagar decision was “egregious, erroneous and unwarranted” and would not just hurt the country financially “but also bring international discredit as the decision undermines Mumbai”.

Maharashtra’s ruling combine of the Shiv Sena, Congress and the NCP has condemned the Centre’s decision.

While the Manmohan Singh government had in 2006 picked Mumbai as the prospective home of the IFSC, the project remained a non-starter. Gujarat became the favourite after Modi’s rise to Prime Minister in 2014.

The Shiv Sena has sought to give the matter an emotional twist, saying Gujarat has snatched what was Maharashtra’s due.

Former Maharashtra chief minister Devendra Fadnavis of the BJP, who had toiled between 2014 and 2019 to establish the IFSC in Mumbai’s Bandra-Kurla Complex, has done a somersault after Modi’s decision. He has argued that Mumbai lacks the infrastructure for the project.

Another former Maharashtra chief minister, Prithviraj Chavan of the Congress, has said the then Congress-led government had in February 2007 set up an expert committee on establishing the IFSC in Mumbai.

Congress minister Balasaheb Thorat said the IFSC was being taken to Gandhinagar to reduce Mumbai’s stature before the international community.

Pawar’s letter asks the Prime Minister to take a “rational and judicious” decision keeping aside state politics as this was a national issue.

“Since the IFSC authority is a unified agency to regulate all financial services in international financial services centres in the country... Mumbai being the country’s economic, financial and commercial capital is the best choice and place to relocate IFSC in it. I, therefore, urge you to reconsider the decision to shift IFSC (to) Gujarat and relocate it in Mumbai on merit basis,” it says.

“As you are aware, Mumbai has been recognised as (one of the) world’s top ten centres of commerce in terms of global financial flow, generating 6.16 per cent of India’s GDP and accounting for 25 per cent of industrial output and 70 per cent of capital transactions to Indian economy.

“The city houses important financial institutions and corporate headquarters of numerous companies and its business opportunities attract many multi-national companies from all over the world.”

Pawar added: “As per the data published by RBI on April 23, 2020, the Indian banking sector has deposits to the tune of Rs 1,45,00,000 crore. The share of Maharashtra alone in these deposits is 22.8 per cent, followed by Delhi (10 per cent), Uttar Pradesh (7.8 per cent), Karnataka (7.2 per cent) and Gujarat (5.4 per cent).

“As per the reserve requirements, every bank has to maintain SLR at 18 per cent of its deposits in the form of government securities (G-sec). Through G-sec the central government receives funds to the tune of Rs 26,00,000 crore. Out of such funds, Rs 5,95,000 crore is received from the state of Maharashtra alone as against Gujarat’s Rs 1,40,000 crore.”

Pawar wrote that all business groups, bankers and financial institutions were in favour of having the IFSC in Mumbai.

“In spite of Maharashtra’s immense contribution to G-sec, the decision of establishing IFSC in Gujarat is egregious, erroneous and unwarranted,” he said.

“It will also be perceived as a move to shift financial institutions and business houses away from Maharashtra and will create unnecessary political disturbances. It will not only cause financial damage to the country but also bring international discredit as the decision undermines Mumbai.”

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