What Gujarat’s Vedanta-Foxconn project means for Maharashtra’s politics

Updated on Sep 15, 2022 07:08 PM IST

Vedanta-Foxconn who were in advanced talks with Maharashtra have signed an MoU with the government of Gujarat to set up their semiconductor and display manufacturing unit in the state. semiconductor and display manufacturing unit in the state. The sudden move has created a political firestorm in Maharashtra

MYuva Sena members sign the board as part of protest against the shifting of Vedanta-Foxconn semiconductor manufacturing project from Maharashtra to Gujarat at Tardeo in Mumbai on Thursday (ANI)
MYuva Sena members sign the board as part of protest against the shifting of Vedanta-Foxconn semiconductor manufacturing project from Maharashtra to Gujarat at Tardeo in Mumbai on Thursday (ANI)

MUMBAI: Vedanta, one of India’s biggest mining companies, and Taiwan’s Foxconn sealed agreements on Tuesday to set up semiconductor and display production plants in Gujarat, setting up a political row in neighbouring Maharashtra where the ruling Bharatiya Janata Party (BJP) and the Shiv Sena blamed each other for the proposed plants that were expected to be built in Maharashtra.

What is the project about?

The Vedanta-Foxconn joint venture will invest 1.54 lakh crore to set up a facility manufacturing semiconductor chips and a display fabrication unit in Gujarat. The joint venture between the mining conglomerate and Taiwanese electronics giant is the fourth to announce its plans under the 76,000 crore production-linked incentive scheme to bolster India’s semiconductor chip manufacturing capabilities. The venture is said to have the potential to create around 1 lakh jobs.

How did the controversy erupt?

On Tuesday, Shiv Sena leader and former environment minister Aaditya Thackeray set the ball rolling by stating that the previous Maharashtra Vikas Aghadi (MVA) government was working to get this investment in the state and the previous coalition government led by the Sena had even finalised the project site (at Talegaon near Pune). He asked why the conglomerate moved them out at the last minute and called it “a big loss for Maharashtra.”

On Wednesday, Thackeray fired a fresh salvo and claimed that the bulk drug park (BDP) project will also be set up in Gujarat instead of Raigad in Maharashtra where it was proposed to come up. This was expected to create 80,000 direct jobs, apart from boosting an ecosystem of ancillary units.

What are the allegations and counter allegations?

Shiv Sena leader and former industries minister Subhash Desai questioned if the Narendra Modi-led Union government was trying to divert investments and mega projects from Maharashtra to Bharatiya Janata Party (BJP)-ruled Gujarat.

The previous MVA government had approved a 38,831 crore incentive package to Vedanta-Foxconn and offered to increase it further to 40,000 crore. However, the incentives offered by the Gujarat government were lower by 12,000 crore. “Even then, why did they go to Gujarat? This means it is a political decision taken under the pressure of the union government,” he alleged.

The Shiv Sena, which was launched in 1966 on the plank of jobs for sons-of-soil, has claimed that these two projects will deprive around 2 lakh local, Maharashtrian youth of employment opportunities. It underlined that Maharashtra, home to the country’s financial capital Mumbai, was an industrial powerhouse with trained manpower and was thus, the appropriate site for these projects.

On the defensive, Uday Samant, minister for industries, said chief minister Eknath Shinde had discussed the issue with Prime Minister Narendra Modi on Monday evening. Modi assured them that even if this project went to Gujarat, a project of similar or a larger scale will be given to Maharashtra. Shinde, deputy chief minister Devendra Fadnavis and Samant are expected to meet PM Modi. Samant has also charged the erstwhile MVA regime of dragging its feet on the issue, leading to Gujarat stealing a march and ending up with the project.

Vedanta chairman Anil Agrawal has said they are committed to investing in Maharashtra as well in an affiliate project.

Why is this important in Maharashtra and Gujarat?

The elections to the Gujarat state assembly are due later this year, and the BJP is leaving no stone unturned to retain the home state of PM Modi and home minister Amit Shah.The announcement of a mega project with massive employment potential in a state which pitches itself as an investment destination will lead to much-needed optics for the Bhupendra Patel-led dispensation.

The issue has touched a raw nerve in Maharashtra due to the obvious impact on local job creation. The Shiv Sena has claimed that this is part of the larger flight of capital being encouraged by the BJP from Maharashtra to Gujarat, the gradual erosion of Maharashtra’s importance in the industries and finance sectors, and is meant to eventually sever Mumbai from Maharashtra.

The Sena has pointed to previous instance of India’s first International Financial Services Centre (IFSC) being shifted to the Gujarat International Finance Tech-city (GIFT) SEZ from its original location in the Bandra Kurla Complex (BKC) and the Union government’s non-committal stance on the Mumbai IFSC. According to this narrative, projects such as the Mumbai- Ahmedabad high-speed railway, popularly called the bullet train, are meant to leverage Mumbai’s advantages for Gujarat

The Shiv Sena and its allies allege that the Union government is being partial to Gujarat at the cost of Maharashtra and the Eknath Shinde-led coalition government in Maharashtra wasn’t protecting the state’s interests vis-a-vis Gujarat, home to the BJP’s central leadership.

The controversy has raised hopes within the Shiv Sena that it might be able to polarise the elections to the Brihanmumbai Municipal Corporation (BMC) on linguistic grounds, and a Marathi versus non-Marathi angle could become the focus. To be sure, the Shiv Sena does face an uphill task against the BJP and Shinde to retain power in Mumbai’s civic body and there is a whisper campaign about how a BJP win in BMC elections may lead to carving Mumbai out of Maharashtra.

The BMC, the country’s richest civic body has been controlled by the Shiv Sena during 1985-1992 and from 1997 till date. It has been allleged that many of the party’s full-time workers survive on the spoils that trickle down through the power networks in the civic body and this ‘reward economy’ helps keep its party organisation in fine fettle.

Is there a history to the Maharashtra versus Gujarat rivalry?

In 1960, the state of Maharashtra was carved from the bilingual state of Bombay with Mumbai as its capital. Maharashtra secured Mumbai, over-riding the claims of Gujarat and demands that it be a union territory.

The Government of India appointed a States Reorganization Commission (SRC) in 1953. The Bombay Citizens Committee, which included prominent industrialists, wanted Bombay (as Mumbai was then referred to) to be kept out of the proposed state of Maharashtra. The Gujaratis, who feared losing Mumbai to Maharashtrians, dominated this ‘Save Bombay’ movement.

The Samyukta Maharashtra movement, which called for the formation of a Marathi-speaking state of Maharashtra, with Mumbai as the capital, was led by a rainbow coalition that included Communists like S.A. Dange, Acharya P.K. Atre, the non-Brahmin activist ‘Prabodhankar’ Keshav Sitaram Thackeray, who was the father of late Sena supremo Bal Thackeray, freedom fighter ‘Senapati’ PM Bapat, and socialist SM Joshi.

They argued that Marathi speakers formed the highest linguistic cohort in Mumbai and the city had an organic social and economic link with the mainland in Maharashtra. Moreover, it was the Marathi working class that built the city.

On 16 January 1956, the Centre announced three new states based on languages, including Maharashtra, Gujarat and bi-lingual Bombay, to be administered from Delhi. Faced with the might of the Samyukta Maharashtra Samiti (SMS), which was the first such anti-Congress coalition, the Union government finally acquiesced to formation of the state of Maharashtra with Mumbai as its capital and the state of Gujarat. But this came after a struggle that claimed at least 106 lives.

Thus, the issue of Mumbai being severed from Maharashtra has a strong emotional connect for Maharashtrians and has been used successfully by the Shiv Sena in the past to bolster its electoral fortunes in 1985 and 2012.

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