IFSC controversy: Pawar terms Centre’s move a threat to the financial hub of India?

By IndianMandarins- 05 May 2020


Sharad Pawar, in his recent letter to PM Narendra Modi, urged him to reconsider his government’s decision on International Financial Services Centre (IFSC) Authority headquarters being shifted to Gujarat. This has, now, sparked off a controversy.

On April 27, 2020, the NaMo Govt issued a notification stating that the IFSC Authority will be headquartered in Gandhinagar (GIFT City) instead of Mumbai; the economic and commercial capital and financial hub of the country. Pawar attempted to set the alarm bells ringing by apprehending a massive financial loss to the country.

He even warned that this may bring international discredit to the country as it undermines the importance of Mumbai which is recognized as one of the top 10 centers of commerce in terms of global financial flow, generating 6.1% of India's GDP and accounts for 25% of industrial output and 70% of capital transactions to the Indian economy.

Pawar quoted the RBI data In his letter which stated that the Indian banking sector has deposits worth ₹145,00,000 crore. The share of Maharashtra state alone 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.

He further stated that Mumbai houses important financial institutions and headquarters of numerous corporated houses and its business opportunities attract many multinational companies from across the world. He urged NaMo Govt to reconsider its decision by letting it be on merits instead of one’s own choice and preferences.

A Congress spokesperson further stated on the issue that PM Narendra Modi wants Gujarat ahead of all other states and that he does not look at all states equally.

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