Mumbai: A competitive federalism is being witnessed between Maharashtra and Gujarat over the inflow of foreign direct investment.
Three days after the BJP-led government proclaimed in full-page advertisements in national newspapers that Gujarat had achieved the highest FDI of Rs 1.91 lakh crore from April to September 2020, the Maha Vikas Aghadi government on Thursday claimed that the shift in favour of Gujarat was unsustainable and transitory, as it was primarily driven by a once-in-a-while quarterly uptick in FDI inflows.
The state government further said, “Maharashtra is an all-weather undisputed leader of investments inflow, driven by two indispensable factors – consistency and scale and quality over quantity. Maharashtra maintains its strong foothold over cumulative FDI inflows. It is consistently housing 30 per cent of cumulative FDI inflows in India. Maharashtra has a diversified portfolio of investments from the Netherlands, Japan, Singapore, USA and UK, whereas around 10-15 per cent of FDI in Gujarat comes from the US, making the overall FDI inflow relatively susceptible to global geopolitical and structural changes.’’
It added that Maharashtra had one of the highest rates of MoU/IEM conversions in India.
The state government has responded to the Gujarat government’s claim citing data from the Department for Promotion of Industry and Internal Trade, on getting the highest FDI inflow during the coronavirus pandemic.
MVA government sources told The Free Press Journal, “Maharashtra is attracting substantial greenfield investments in sectors such as data centres, pharmaceuticals, logistics, chemicals, automobiles, EVs, ESDM and more. These investments in Maharashtra are expected to create 25,000 direct and 1 00,000 indirect jobs. Brownfield investments such as Saudi Aramco may not have a vast social footprint.’’
Further, the MVA government argued that the mother of all investment deals in Gujarat included Reliance, Facebook, Microsoft and others.
“During April – September 2020, Reliance Industries Limited (RIL) raised $15.2 billion in 11 deals for its Reliance Jio Infocomm. Categorising the deals as FDI or not is yet to be determined, as the details are yet to be corroborated with the official company-wise FDI inflow statistics, which are expected to be released by DPIIT during Q4 of 2020 – 21,’’ said the state government.
“Irrespective of the categorisation of the investment, Maharashtra will be a major benefactor of the deal, if Mumbai is kept as the destination location of FDI during remittance filing at the RBI’s Foreign Exchange Remittance and Management System (FIRMS) portal,’’ the state government observed.
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