Devendra Fadnavis ready to provide infra; seeks tax sops to make Mumbai a financial hub
Maharashta government wants Centre to allow foreign companies to use Mumbai as base for global financial deals.
MUMBAI: The Maharashtra government has proposed that the central government allow foreign banks and companies to use Mumbai for their global financial transactions as part of its plan to turn the city into a global financial hub on the lines of Singapore or Hong Kong.
In an exclusive interview with ET, Maharashtra chief minister Devendra Fadnavis said Mumbai has the advantage of location, being five hours ahead of London, and that the government may consider tax concessions to help foreign banks and companies to move their financial desks to Mumbai.
"The basic problem in making Mumbai a financial centre is that in our law, whatever business we do from Mumbai or from any Indian city , is taxable. But financial services are tradeable. If you tax even services that are traded elsewhere, why should someone come to Mumbai?" An international banking operations centre like in Singapore or Hong Kong means foreign banks or companies with large treasury or trading operations can set up desks in Mumbai to trade or raise money. Fadnavis wants tax concessions given to such activity to make Mumbai attractive. His administration, he said, will create infrastructure such as public transport systems like metros and make land available for buildings and offices.
"Our appeal to the central government through this deliberation would be that it should adopt the global model on taxation.
Only those financial services that are created and utilised within the country should be taxed, but those that are utilised and created elsewhere by using Mumbai as a financial centre should not be taxed.
This would be the incentive for people to come and operate from Mumbai." A top bureaucrat said that the move to make Mumbai a financial services hub, a la Singapore, comes after one-on-one meetings that many Indian industrialists, bankers and businessmen had with Fadnavis. They told the chief minister that they would set up businesses in Mumbai instead of Singapore if certain laws were changed.
The Mistry committee report of 2007 had outlined a series of steps the government could take to make Mumbai a financial hub, but the then UPA government could not act on the report and nothing was done about it for the last seven years.
In an exclusive interview with ET, Maharashtra chief minister Devendra Fadnavis said Mumbai has the advantage of location, being five hours ahead of London, and that the government may consider tax concessions to help foreign banks and companies to move their financial desks to Mumbai.
"The basic problem in making Mumbai a financial centre is that in our law, whatever business we do from Mumbai or from any Indian city , is taxable. But financial services are tradeable. If you tax even services that are traded elsewhere, why should someone come to Mumbai?" An international banking operations centre like in Singapore or Hong Kong means foreign banks or companies with large treasury or trading operations can set up desks in Mumbai to trade or raise money. Fadnavis wants tax concessions given to such activity to make Mumbai attractive. His administration, he said, will create infrastructure such as public transport systems like metros and make land available for buildings and offices.
"Our appeal to the central government through this deliberation would be that it should adopt the global model on taxation.
Only those financial services that are created and utilised within the country should be taxed, but those that are utilised and created elsewhere by using Mumbai as a financial centre should not be taxed.
This would be the incentive for people to come and operate from Mumbai." A top bureaucrat said that the move to make Mumbai a financial services hub, a la Singapore, comes after one-on-one meetings that many Indian industrialists, bankers and businessmen had with Fadnavis. They told the chief minister that they would set up businesses in Mumbai instead of Singapore if certain laws were changed.
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The Mistry committee report of 2007 had outlined a series of steps the government could take to make Mumbai a financial hub, but the then UPA government could not act on the report and nothing was done about it for the last seven years.
The Fadnavis government is working towards that objective but it would require central government’s approval, tax concessions and massive investment in infrastructure and basic services.
Fadnavis said the government plans to set up 10 new smart cities, two of which will come outside Mumbai. Development plans for various regions of the state, especially the fringe areas surrounding big cities like Mumbai and Nagpur, are being worked out and this will be followed by new cities or large urban clusters to soak up the migrant population in rural areas.
"This will take the pressure off existing cities," Fadnavis said.
"Just a day ago, I gave permission for the creation of a new city near Nagpur, which will almost be like a Nagpur Metro area. We will also allow development of a new city around the new airport that is coming up in Navi Mumbai and this will be a 600 square kilometre city which will be bigger than Mumbai itself. Similarly, in Thane district, we have given permission for a new city on land that was earlier reserved," Fadnavis said.
"The problem till now was that the development plans for these cities were just not getting sanctioned. For the last 15 years, the development plans were not sanctioned. This blocked development of new areas and creation of new suburbs or cities. But we have speeded up the process and have given clearances to 35 development plans and several other projects," he said.
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