The state of Maharashtra completes 57 years in its present form today (1 May). At an estimated nominal Gross State Domestic Product (GSDP) this year of $380 billion, roughly 14.5 per cent of country’s estimated Gross Domestic Product (GDP), Maharashtra continues to be the putative economic powerhouse of India.
In terms of percentage contribution, Maharashtra is to the Indian economy, what China is to the world economy.
Since the start of this decade, the nominal Maharashtra GSDP has been growing at substantially lower pace compared to the growth rates achieved in the previous decade. The 2013-14 growth was an anaemic 7.5 per cent. In the last three years, there has been a trend reversal with the growth rate moving to around 9.5 per cent in 2016-17. Yet, several smaller states like Haryana, Uttarakhand and Kerala now have higher per capita GSDP than Maharashtra. Larger states like Tamil Nadu, Telangana, Gujarat and Karnataka are nibbling at the toes.
Irrespective of all this, Maharashtra still retains its pre-eminent position as the home to the national financial services industry, which fuels the country’s economic system. However, as the popular financial services adage goes, past performance is no guarantee of future returns. Likewise, Maharashtra faces new challenges of urbanisation, farm distress, job shortages and social distress, which is partly borne out of the other issues. The strength of the financial services industry can no longer be leveraged in solving these economic problems of the future.
Mumbai, Pune and Nagpur are currently witnessing massive investments in infrastructure revamp targeting rapid mass transport, airports, real estate and roads. Over the next couple of decades, there have to be new areas of growth, sectoral as well as geographical, so that these large cities are unencumbered. This will require an equivalent targeted investment in enabling infrastructure across the state, covering various constituent sectors of the economy.
Managing The Largest Urban Cluster In The World
If one travelled on the Mumbai-Pune Expressway in the first half of the last decade, one had to ensure supply of food and water and a thorough inspection of the car. There wasn’t much civilisation on the expressway for long stretches, and it was not safe getting down on the roadside asking for help.
Travelling the same stretch today, there are houses everywhere, roadside shops are aplenty, and mobile connectivity works on most days even in the multiple tunnels which dot this road. Travel experience is not too different now between Pune and Nashik or Nashik and Thane.
Not too far in the future, perhaps in the next 10 years, the Mumbai-Pune-Nashik-Thane region will be home to the largest contiguous urbanised population in the world. It is not facetious to think of 50 million people living in this industrialised metropolitan region, jostling for space, and needing to traverse the city boundaries as we know them today, for jobs and daily living.
Managing such colossal urban challenge will require amenities, which will require space. Land in this region is at a premium, even by developed western world standards. Wide roads, a network of interconnecting ring roads around population centres, expressways, high-speed rail, metro rails and bullet trains will all be required at once to support this enormous urban explosion.
For the next decade, the state government should plan these amenities for this region thinking of interoperability and unification. Municipal standards and government service delivery should be standardised on common platforms.
There is a need for dedicated oversight and coordination for planning in this region, starting right now. The thinking itself has to be primed for scale first and foremost.
Nagpur – The Logistics Capital Of India
As the Goods and Services Tax (GST) comes into effect later this year, there is a huge logistics business opportunity waiting to be tapped. Even with all its design flaws, GST will drive geographical logistics consolidation in favour of central areas well connected to rest of the country. Nagpur is the natural candidate. There should be an immediate focus on creating a land bank for warehouses, multimodal transport hubs, dry port, and air connectivity in and around Nagpur.
In addition to Nagpur, areas in the Nanded-Chandrapur stretch can be secondary logistics hubs catering to the western and the eastern states respectively.
Maharashtra can be the biggest beneficiary of the incremental GDP growth that will eventually come out of the GST implementation after the initial bumps.
Connect East Approach
There’s a lot happening today to reduce the commuting issues between every city pair of Mumbai, Pune, Nashik and Nagpur.
However, the next big road projects in Maharashtra should also focus on eastern periphery. A Nagpur-Kolhapur Expressway, touching Chandrapur, Nanded, Latur and Solapur will greatly help the Vidarbha and Marathwada regions to integrate better with the traditionally rich western half of the state.
This Eastern Expressway has to be supplemented by Nashik-Aurangabad-Nanded and Pune-Latur-Nanded connections to create an efficient interlocking grid. This road network will further boost logistics advantage of the state. It will also help evacuation of industrial produce to Eastern India as well agricultural produce to Western India.
Same sectors are also candidates for railway line push – currently, most Maharashtra cities have poor to average pair-wise railway connectivity.
Regain The Auto Capital Of India Tag
Pune used to be a significant automotive production centre until Gurgaon, Chennai and Sanand stole the city’s thunder attracting new investments from global auto players. Maharashtra, however, can regain the lost ground by becoming the leading hub for manufacturing batteries for electrical vehicles.
Very few countries have been able to design a car indigenously and sell it globally. China, despite being the largest car market, has not been able to create an auto brand of repute. It now plans to dominate the auto industry by becoming the battery production hub of the world as there is a global shift towards electrical vehicles.
Maharashtra can adopt the same approach.
This is a clean slate; the state already has significant industrial culture and cadence, and international presence. There needs to be a dedicated push in this space, attracting large Chinese and Japanese battery manufacturers to set up shop in the state. Electric batteries represent a sunrise sector and have utility much beyond auto as the solar power generation grows. Cornering this production market can guarantee the state jobs of the future.
Unlock Konkan’s Tourism Potential
The Konkan region is the coastal belt which extends from Thane to Sindhudurg, adjacent to the Arabian Sea. This region, nestled in the presence of Western Ghats to the east, has great beaches, rivers, and difficult to traverse land mass. That this region can be a big tourist destination is long known. But connectivity has been a nagging issue.
With the new airport in Goa coming up in the next few years, the adjoining areas of Ratnagiri and Sindhudurg can be big gainers. This airport, being developed in north Goa, is virtually an airport for Maharashtra, and hence it presents a big opportunity. The Malvan to Shiroda stretch should be earmarked for developing new resorts, balancing the ecological concerns. The Mumbai-Goa National Highway already connects these regions to North Goa – the state government can impress upon the Centre to expedite the expansion of this highway to four or six lanes with a speedier land acquisition and project clearances.
With the central government stressing on waterways and coastal transportation, this sector can be further expanded to connect the Ratnagiri-Ganpatiphule stretch with Malvan. The land distance between these cities is no more than 200 km, but the terrain is difficult to drive on and create new roads on.
However, coastal transportation to Malvan can solve this problem.
Overhaul Agriculture Governance
The current Devendra Fadnavis government is working towards the goal of doubling farmer income by the year 2022. This process can get a big leg up by adopting in toto the NITI Aayog recommendations on how agriculture is governed and managed in the state. The new model law – Agricultural Produce and Livestock Marketing (Promotion and Facilitating) Act (APLM), 2017 should be implemented with full zeal and vigour.
The state needs to dismantle the control of local mandis working under the Agriculture Product Market Committees (APMCs) completely. Buyers should be allowed to tap the seller farmers directly without restrictions on quantity or frequency of buying. Private mandis – aggregators – should be encouraged and the e-National Agriculture Market reforms hastened. This will require supplementary investments in improving farm credit, farmer insurance, and supply chain networks.
Create A Water-Sufficient State
Irrigation has been a key theme for the Fadnavis government already. The Jalyukt Shivar Abhiyan has been a resounding success. Maharashtra's Farm Pond on Demand scheme has been selected in the top 10 Innovations under Prime Minister Awards 2017. This razor-sharp focus on irrigation has to get to a logical conclusion soon.
The difference in water availability between western Maharashtra and the Marathwada region is stark. The Mumbai-Pune belt has planned its water need and controlled the water usage reasonably well over the years. But Marathwada is almost always parched with unsustainable cropping patterns, further compounding the water problem.
The micro-irrigation programmes, which currently cover about 25 per cent of the villages of the state, have to reach the entire state swiftly. The stated aim of Chief Minister Fadnavis to move the state from flood irrigation to drip irrigation in the next 10 years is a commendable target to set.
These programmes need to reach a logical conclusion, and this is one big transformation theme already being attacked from different angles.
Create A Power-Sufficient State
When Bhiwandi implemented the power distribution reforms in 2006, bringing in private players, there was a lot of scepticism and political opposition. Today, the Bhiwandi Model is looked upon as the ideal model to emulate, and other states routinely learn from it. The model brings in distribution franchisees from the private sector and provides for state's assistance in making the private player successful through enabling involvement.
Move 120 km south east from Bhiwandi – today as the country has minimised the gap between power generation and power demand – Pune still sees a day-long power cut every Thursday. It is a remnant and a sore reminder of the power shortage and rationing era.
These contradictions show that the one state which hasn’t learnt from its successes in the power sector is, unfortunately, Maharashtra itself!
Power availability is the key for industries and agriculture. The state needs to invest massively in segregating the feeders used for different purposes. There is central assistance for this programme, and the state should aim for 100 per cent segregation. There is also the need to overhaul the local city distribution networks – surplus power at source is of no use if consumers can’t use it.
However, the creaking urban power infrastructure leads to routine power cuts in cities. This problem has to be addressed – Pune can be the ideal place to start given the in-apposite 'Dark Thursdays.'
Maharashtra should also aggressively invest in technology upgrade. Smart meters for cities and solar pumps and solar power setups should be encouraged and experimented with. The national UJALA programme to popularise LED bulbs shows that state can catalyse scale without subsidisation for consumables if only the programme is designed well.
Solar pumps are a fit case for this design extension.
Like the Chief Minister has set a no flood irrigation target, a similar ambitious no power cut target needs to be set and implemented in line with the national 2022, 24x7 power for all target.
Maharashtra Day is a day to celebrate the past glory and to take pride in a land of myriad achievements and rich history. It should also be a day for new beginnings, to shape a better future and for a resolute approach to deliver what it takes.
Aashish Chandorkar is Counsellor at the Permanent Mission of India to the World Trade Organization in Geneva. He took up this role in September 2021. He writes on public policy in his personal capacity.
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