Nationalist Congress Party (NCP) president Sharad Pawar in a letter to Prime Minister Narendra Modi has said that the Centre’s decision to shift the International Financial Service Centre (IFSC) to Gandhinagar in Gujarat from Mumbai is “egregious, erroneous and unwarranted”.
“It will also be perceived as a move to shift financial institutions and business houses away from Maharashtra and will create unnecessary political disturbance. It will not only cause financial damage to the country but also bring international discredit by undermining the importance of Mumbai,” Mr. Pawar said in his letter dated May 2.
Mr. Pawar’s letter comes at a time when all three constituents of the Maha Vikas Aghadi (MVA) government in Maharashtra are registering their protests against the Central government’s decision.
The former Union minister said that Mumbai has been recognised as one of the world’s top ten centres of commerce in terms of global financial flow, with the State capital generating 6.1% of India’s GDP and accounting for 25% of industrial output and 70% of capital transactions to the Indian economy.
“The city houses important financial institutions and corporate headquarters of numerous companies and its business opportunities attract many multinational companies from all over the world,” it said.
“Since the IFSC authority is a unified agency to regulate all financial services in international financial service centres in the country, Mumbai being country’s economic, financial and commercial capital is the best choice and place to relocate IFSC in it. I therefore urge you to reconsider the decision to shift IFSC to Gujarat and relocate it in Mumbai on merit basis,”' said Mr. Pawar.
Further, the NCP chief reiterated that the Centre’s decision will be taken as act of undermining the strategic importance of Mumbai, which boasts of being the nation’s financial capital. “Even financial institutions across the world will be taken a back by this shocking decision,” he said.
In order to substantiate his argument, Mr. Pawar, said according to Reserve Bank of India data released on April 23, 2020 the Indian banking sector has deposits worth ₹145,00,000 crore. The share of Maharashtra State alone in the said deposits is 22%, followed by Delhi (10%), Uttar Pradesh (7.8%), Karnataka (7.2%) and Gujarat (5.4%). Through G-secs, the Centre receives funds worth ₹26,00,000 crore, of which ₹5,95,000 crore is received from Maharashtra as against Gujarat’s contribution of ₹1,40,000 crore.