Opinion CM’s enterprise

Maharashtra Chief Minister Devendra Fadnavis, who dropped in at the Express Adda in Mumbai last week to hear party colleague and Rajasthan Chief Minister Vasundhara Raje speak, defended the latter’s recent roadshow in the city to attract investment. Competitive federalism, he said, was for the benefit of the nation. Fadnavis’s bold defence of the Rajasthan CM was in the face of strong opposition from the Shiv Sena, his allies in the Maharashtra government, to Raje’s canvassing. It was a departure from the narrow regionalism that many state leaders uphold.

Fadnavis recognises the futility of being churlish about other CMs seeking capital from Mumbai. Before Raje, Gujarat CM Anandiben Patel had undertaken a similar exercise. Mumbai, after all, is the country’s financial hub, and capital, like labour, is mobile and constantly in search of better business environments. Raje has highlighted the pro-industry measures taken by her government — such as liberalising labour laws, offering tax concessions on capital investment and freight — to attract business. Over the past decade, states like Gujarat and Andhra Pradesh have used similar measures to lure capital. A couple of years ago, Karnataka Chief Minister Siddaramaiah held a roadshow in Coimbatore, a major production centre in Tamil Nadu, at a time when the city was facing a massive power shortage, and invited the captains of industry to explore the better infrastructure in his state. Himachal Pradesh and Uttarakhand have used special concessions the Centre gave to hill states to build industrial belts. States hungry for capital know that they need to be proactive and think out of the box if they wish to close the gap with regions that have local advantages and a head start in industrialisation. Others betray a protectionist mindset and ignorance about the logic of capital. Punjab blames the special privileges enjoyed by Himachal Pradesh for the flight of capital from its cities. Parties like the Shiv Sena respond with chauvinistic campaigns.
Prime Minister Narendra Modi had outlined cooperative federalism as his guiding principle for nation-building. Throw in competition and the path to economic growth becomes clear. CMs who recognise the shift in the ground are likely to embrace competitive federalism and tailor policies to win over investors. They understand that, in the coming years, jobs and higher incomes are more likely to influence elections than regional sentiment, ethnic agendas. Blaming the neighbour for one’s failure to generate employment is unlikely to fetch votes anymore. Fadnavis is only reflecting the new reality.