Centre's decision to set up IFSC HQ in Guj 'egregious': Pawar

NCP chief Sharad Pawar has written to the Central government about its decision to set up headquarters of the International Financial Services Centre (IFSC) at Gandhinagar instead of Mumbai, calling it "egregious, erroneous and unwarranted". He urged the Centre to reconsider the decision to set up the IFSC authority in Gujarat and relocate it in Mumbai on the basis of merit.

Mumbai: NCP chief Sharad Pawar has said the Centre's decision to set up headquarters of the International Financial Services Centre (IFSC) at Gandhinagar instead of Mumbai is egregious, erroneous and unwarranted", and urged the Union government to reconsider it.

This will not only cause financial damage to the country but also bring international discredit to it by undermining the importance of Mumbai, which is the country's financial capital and the best choice for the IFSC authority, Pawar said in a letter written to the Centre on Saturday.

"In spite of Maharashtra's immense contribution to government securities, the decision to establish IFSC (headquarters) in Gujarat is egregious, erroneous and unwarranted," he said in the letter.

"I expect the Prime Ministers Office to take a rational and judicious decision, keeping aside the state politics and consider it as an issue of utmost national importance," the former Union minister said.

Pawar cited a Reserve Bank of India (RBI) report to put forth his point.

He said according to the RBI data as on April 23, the Indian banking sector has deposits to the tune of Rs 1,45,00,000 crore.

Maharashtra's share 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), he said.

As per the reserve requirements, every bank has to maintain SLR at 18 per cent of its deposits, in the form of government securities, he said.

"Through this G-sec, the central government receives funds to the tune of Rs 26,00,000 crore, and out of it Rs 5,95,000 crore is received from Maharashtra as against Gujarat's contribution of Rs 1,40,000 crore, he said.

"Mumbai has been recognised as one of the worlds top 10 centers 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," Pawar said.

The city houses important financial institutions and corporate headquarters of numerous companies, and its business opportunities attract many multi-national companies from all over the world, he noted.

Since the IFSC authority is a unified agency to regulate all international financial services centers in the country, and Mumbai, being country's economic, financial and commercial capital, is the best choice and place to relocate IFSC (headquarters), Pawar said.

He, therefore, urged the Centre to reconsider the decision to set up the IFSC authority in Gujarat and relocate it in Mumbai on the basis of merit.

Pawar said he hoped his letter will be taken in the right spirit and a true statesmanship will be shown in considering to set up the IFSC headquarters in Mumbai.

On Saturday, the Union government's decision to set up the IFSC headquarters at Gandhinagar instead of Mumbai led to a verbal spat between the ruling allies Congress-Shiv Sena and the opposition BJP in Maharashtra.

While the two ruling alliance partners alleged that it was an attempt to lessen Mumbai's stature, the Maharashtra BJP claimed the Congress-led governments did nothing to get IFSC in Mumbai when they ruled the state earlier.

PTI