Infrastructure projects such as Bandra-Worli Sea Link propels Mahrashtra to No. 5 in factor conditions (Pic by Satheesh Nair)

There are some advantages Maharashtra has inherited that have little to do with the vision and policies of the state administration. For instance, a flat, plateaued topography with a low forest cover allows for immense growth opportunities. Again, early development of industry in Mumbai starting with the textile mills during and soon after World War I triggering urbanisation and migration, and all the consequent advantages of social progress and education.

It is, thus, not surprising that Maharashtra is the most urbanised state with 42 per cent of its population in urban agglomerations, and a literacy rate of over 77 per cent compared to a national average of about 64 per cent.

This acts as a magnet for industrial investment. Auto majors Tata Motors and Bajaj Auto are headquartered in Pune, and Volkswagen is the latest to move in with a $300-million (Rs 1440 crore) plant that will go on stream later this year. Over time, 25 per cent of the Top 500 software companies in India have opted for Maharashtra. Similarly, the state contributes about 40 per cent of the turnover and 11 per cent of the value of formulations to the pharma industry.

Maharashtra has also been able to attract the largest volume of foreign direct investment (FDI) — 21 per cent of the country’s total — between 1991 and 2007 with nearly 4,000 projects committing over $17 billion in investments.

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Progressive Policies
The state government has faced a litany of complaints from corporate groups that processing of investment proposals is slow and that other states are way ahead in tax concessions. “Anecdotally, Gujarat is now seen by many as the best place to invest in,” says Adi Godrej, chairman of the Godrej Group, adding at the same time that the excise benefits offered to consumer product manufacturers such as Godrej in backward regions had pushed them to invest in states such as Himachal Pradesh and the North-east.

Yet Maharashtra has scored as the overall policy and environment is way ahead of others.

Despite controversy over land acquisition for the Mukesh Ambani-promoted 10,000-hectare Maha Mumbai SEZ, the state has had a successful SEZ policy. Ashok Chavan, speaking as industry minister at Aurangabad before he took over as chief minister, said: “Maharashtra is the most favoured destination for investments. Letters of intent for as many as 128 SEZs, the highest for any state, have been sanctioned.”

The state is also aggressively increasing power capacity by 14,000 MW with an investment of around $27 billion and is building its own ‘Golden Quadrangle’ aimed at providing four-lane roads for the Mumbai-Nashik-Pune-Aurangabad industrial heartland. However, there is grave concern expressed by private investors at the prevailing corruption and delay in getting clearances. This survey, too, has marked down the state to a low No. 25 in administration.

On the housing front, Maharashtra was again the first to adopt a comprehensive housing policy in July 2007 wherein it is mandatory for all housing projects to provide 20 per cent reservation in the layout for units for the poor.

The state’s performance on the agrarian front, too, is wanting. Though pioneering, the production of sugar through the cooperative movement in the western districts, the state continues to be deficit in food grains. “The state is facing the ire of farmers for not offering remunerative prices for milk and sugarcane, and there have been huge protests as cane rotted because of a lack of crushing capacity,” says Baliram Chedde, a leader of the opposition Peasants & Workers Party from Osmanabad.

Again, despite being the largest producer of cotton in the country and with 15 per cent of the state’s cropped land under cotton, 95 per cent of the 3.4 million farmers are under the grip of indebtedness, according to an NGO Vidarbha Jan Andolan. “Vidarbha has traditionally been discriminated against for funds because political leaders of all parties do not have the reach of their counterparts from western Maharashtra,” explains Pratap Goswami, the Nagpur-based secretary of the V.P. Singh-floated Jan Morcha.

To retain top billing next time, Maharashtra will have to start looking at these issues sooner rather than later.