HT Column: Clear hurdles to make Mumbai global financial centre

  • Shailesh Gaikwad, Hindustan Times
  • Updated: Apr 20, 2015 23:02 IST

Chief minister Devendra Fadnavis on Sunday announced that he wanted to turn Bandra-Kurla Complex (BKC) into a global financial hub. His announcement comes at a time when the Central government is wooing investors to set shops in GIFT city planned in Gujarat.

During the previous Congress-led UPA regime, a panel set up by the Centre had recommended setting up International Financial Centre (IFC) in Mumbai. IFC was envisioned as global hub housing major international banks, businesses and stock exchanges with much less restrictions on financial transactions. The panel had said that Mumbai being the financial capital of India was best suited for setting up the IFC.

Just like several other proposals, this proposal too got stuck, thanks to the policy paralysis in the UPA government. The previous government in the state too failed to realise its significance and did not push for it on priority basis.

The BJP-led NDA government that came to power last year ignored the recommendations in the panel’s report and decided to give IFC status to GIFT city being planned in the Prime Minister’s home state. There were murmurs of protest over this move though no political party, except of course the Congress, made a noise over this.

Significantly, it is Fadnavis, who has revived the issue. It remains to be seen whether he really wants to make Mumbai a regional (if not global) financial centre or if he is just giving sound bites to pre-empt any criticism of his government (about Mumbai getting a raw deal) in the run-up to the civic polls.

Fadnavis also announced his government’s intention to build two iconic towers in BKC, where multinational companies will set up offices and improve infrastructure in the area. These proposed towers may not be iconic — as there are restrictions on structures over 80-90 meters as the BKC falls in the funnel area of Mumbai airport, but there are things that Fadnavis can do.

The BKC faces a major problem of connectivity. The Mumbai Metropolitan Region Development Authority (MMRDA), which owns BKC, is apparently getting a study done on how to turn the area into a global financial hub. Fadnavis and MMRDA can perhaps begin with improving connectivity on urgent basis.

And while the chief minister is talking about financial hub at BKC, one wonders what happened to the other such plans?

The City and Industrial Development Corporation (Cidco) has in its possession 2,140 hactares of land—20 times bigger that BKC—under its Navi Mumbai special economic zone. Several officials and experts wonder why this land is not being used to build a new business hub as most of it is lying idle.

The MMRDA had also planned a business hub at Wadala and was even appointed a special planning authority for the area. It had even planned an iconic tower there. No one knows what happened to these plans.

The Union shipping ministry, led by Nitin Gadkari, too has plans to develop a financial hub under its proposed eastern waterfront development on idle Mumbai port trust land.

It looks like the availability of land is not an issue if the IFC or a business hub is to be set up in Mumbai. The issue is about the land prices and infrastructure. Several corporate houses prefer other cities because the cost of land or office is too high in Mumbai.

One third of about 100 hectares of developed land at BKC is still vacant. As the cost of land is too high, few business houses prefer to go there. The state government will have to ensure that the prices of commercial property remain reasonable if the business hubs are to be made attractive destinations. And yes, better connectivity will be the key.

At the end of the day, the issue is about showing political will. Can Fadnavis get it done and show that he is not paying mere lip service?

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