Sharad Pawar hits out at PM Modi for shift of IFSC from Mumbai to Gandhinagar

Shocked by the Narendra Modi government's decision to shift the proposed International Financial Services Centre (IFSC) from Mumbai to Gandhinagar, the ruling allies in Maharashtra, led by NCP President Sharad Pawar, mounted a scathing attack at the Centre’s dispensation.

The concept of the IFSC came when the Manmohan Singh-led UPA government was in power at the Centre.

In a letter to PM Modi, the NCP chief questioned the wisdom behind the decision and said that it would discredit's Mumbai's position.

The three Maha Vikas Aghadi allies are rattled with the Modi government's decision.

Citing Reserve Bank of India (RBI)'s latest statistical data as at April 23 (2020), Pawar said that the Indian banking sector has deposits worth Rs 145,00,000 crore.

“The share of Maharashtra alone in the deposits is 22.8 per cent, followed by Delhi (10 per cent), Uttar Pradesh (7.8 per cent), Karnataka (7.2 per cent) and Gujarat (5.4 per cent). As per the reserve requirement, every bank has to maintain SLR at the rate of 18 per cent of its deposits in the form of government securities (G-Sec). Though this G-Sec, the central government receives funds to the tune of Rs 26,00,000 crore,” Pawar said.

Out of these funds, Rs 5,95,000 crore is received from Maharashtra alone against Gujarat’s contribution of Rs 1,40,000 crore, the NCP chief added.

“In spite of Maharashtra’s immense contribution to G-Sec, the decision of establishing the IFSC (Authority) in Gujarat is egregious, erroneous and unwarranted. It will be perceived as a move to shift financial institutions and business houses away from Maharashtra and will create unnecessary political disturbances,” cautioned Pawar, a four-time Maharashtra CM.

He said that Mumbai is already recognised as the world’s top 10 centres of commerce in terms of global financial flow generating 6.16 per cent of India’s GDP and accounting for 25 per cent of industrial output and 70 per cent of capital transactions to the Indian economy.

Veteran Congress leader and former Maharashtra chief minister Prithviraj Chavan, who had also served as minister of state in the PMO, also lashed out at Modi.

"There are some of the primary requirements for setting up IFSC, like full array of international banking services for corporates and individuals, full array of international capital markets, products and services and full array of risk management services," he said.

Senior Shiv Sena leader and former minister Arvind Sawant said that his party has no grudges for creating another financial centre but strangulating the existing one which has name, fame and strength is not correct.