Sharad Pawar's Letter to Modi on IFSC Controversy Exposes Old Marathi-Gujarati Fault Line

In political circles, the Centre's move is being seen as another of many moves to downgrade Mumbai and boost Gujarat.

Sharad Pawar, the chief of the Nationalist Congress Party, and the tallest leader in Maharashtra, has sent a strong, even angry letter to Prime Minister Narendra Modi on the Central government’s decision to locate the newly-created International Financial Services Centre Authority in Gandhinagar – which is being seen as a loss for Mumbai.

Among the many implications of this move that he points out in his lengthy note, Pawar says, “It will also be perceived as a move to shift financial institutions and business houses away from Maharashtra and will create unnecessary political disturbances.”

This may appear a strange thing to say — states do compete for institutions and investment, and some lose the game, some win it. It can leave some bitterness and anger, but what could Pawar mean by “unnecessary political disturbances?”

Pawar is not in the government and is a kind of ‘Bhishma Pitamah’ to the Maha Vikas Aghadi, headed by Uddhav Thackeray, which is composed of the Shiv Sena, the Congress, and his own NCP. His political experience goes back five decades and he is a battle scarred veteran, known for astute strategic thinking but also for his immense institutional memory. He means what he says in his letter.

Though it has never erupted in any overt hostility, much less violence, the Marathi-Gujarati fault line in the state, especially in Mumbai, has a long and chequered history and shows up in different ways.

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It goes back to the 1950s – and in some ways even earlier – to the time of agitations all over India to form states on a linguistic basis. Jawaharlal Nehru was completely against the idea but the pressure from different regions was immense. The formation of Andhra Pradesh in 1956, after the death by fasting of Potti Sriramulu, had bolstered forces in Bombay Presidency who wanted the states of Gujarat and Maharashtra to be formed.

Both sides wanted the Presidency split but the contentious issue of who would get to keep Bombay – the richest city in India – became a bitter struggle. The Gujaratis claimed that it was their pioneering work and capital that had built the city which was little more than seven swampy islands when the British had taken over it in the 17th century. Large numbers of entrepreneurs from Gujarat moved to the islands on the invitation of the East India Company to settle down. They, therefore, had a right over Bombay.

The Gujaratis have always maintained that it is their business acumen, investments and capital that has not just built Bombay but also runs it.

Marathi speaking people, who migrated to Bombay at different times and are numerically a majority, claimed that it was a Maharashtrian city. As early as the 1920s, the Marathi speakers were chafing at the lack of representation in the city’s governance at the municipal level. In the 1950s, this grew into the Samyukta Maharashtra movement, in which liberals, communists, socialists and cultural figures and intellectuals – and not just Marathi speakers – made common cause.

The Congress was opposed to both suggestions and wanted Bombay to become a separate Union Territory.

Protestors came out on the street and clashed with the police – during one such march, the police fired at the crowds, killing 105 people. The action was ordered by the much reviled chief minister of Bombay, Morarji Desai, an austere, no-nonsense man who made disparaging comments about Maharashtrians. It didn’t help that he was a Gujarati, though he was opposed to the demand for Gujarat state too.

Y.B. Chavan. Photo: Wikipedia

Once the state was formed in 1960, Y.B. Chavan became the chief minister of Maharashtra, with Bombay as the capital. Sharad Pawar is a protégé of Chavan.

By 1960, Pawar was already a student activist and became an MLA at the age of 27. He has been chief minister four times, a Union minister and is generally considered a mover and shaker at the national level. In the state, he exercises tremendous influence over all parties and attempts by the BJP to ridicule him during the 2019 state election campaign backfired spectacularly. Pawar had the last laugh when he masterminded a three way arrangement to keep the BJP out, a humiliation that the BJP has not forgotten.

Pawar knows the pulse and history of the state and is fully aware of the resentment of Marathi manoos against the Gujaratis, even though many of them are great admirers of Narendra Modi.

While the Mumbai IFC dream has struggled since 2006-2007, it effectively died a quiet death after Modi became prime minister and his pet GIFT city gathered momentum. In political circles, the Central government’s to locate the proposed IFSC authority in Gandhinagar is seen not just as an act of retaliation, but another of many moves to downgrade Mumbai and boost Gujarat. In the last five years, Maharashtra has suspected that the Modi government has been undermining Mumbai, by gradually creating alternatives in Gujarat for port facilities, directing external investment towards it and taking away the financial services sector.

The IFSC system is designed to bring in investment and financial firms, and is posited as a location between the financial markets of the East – Singapore and Hong Kong – and west, ranging from Dubai to Frankfurt and London. That will involve the creation of infrastructure and convincing big financial firms to set up shop here which is still some way off.

Logically, a facility such as the IFSC would make more sense in Mumbai. The city has a long history of finance and financial markets, it has the skilled man power, and most importantly, is a cosmopolitan place that expatriates would prefer. Gujarat’s prohibition policy is often cited as a disincentive for the young, Indians and otherwise, from moving there.

Though other parties barring the BJP in Maharashtra have all expressed their displeasure, Pawar’s letter is the sharpest criticism yet. By saying it could have consequences, he has left no doubt that he sees potential in it to whip up anti-BJP sentiment. The state BJP, under Devendra Fadnavis, is in disarray –Fadnavis, smarting at losing the chief ministership, has not been able to come up with an effective strategy to politically fight the government.

Meanwhile, Uddhav Thackeray has surprised everyone by his sobriety and the manner in which he is handling the coronavirus pandemic. Maharashtra has been hit very badly, and the government’s handling has been criticised, but he is seen as someone who is trying his best; most of all, he is also perceived as empathetic.

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Thackeray is said to take advise from Pawar on political and other matters. At another time, Thackeray’s Shiv Sena would have come out all guns blazing against Modi and at this particular decision of the central government. It is generally forgotten that in the very early days of its existence, the Sena was also anti-Gujarati in its campaign against ‘outsiders’, before it shifted its attention to ‘south Indians’. Many of the Sena’s followers dislike Gujaratis for imposing strict vegetarianism on not just co-operative societies but also entire neighbourhoods.

But the Sena has been uncharacteristically low-profile on this one. Its MP Arvind Sawant has said that Maharashtra is ‘pained’ at the decision, but this is a far cry from what the party is known for.

It has been left to Pawar to take up the issue. It is almost certain he and the other parties in the coalition will exploit it. For one thing, there is a genuine feeling that Mumbai has been short-changed badly. Land had earlier been earmarked for the project which was then appropriated for the Bullet Train, yet another of Modi’s pet schemes seen as a booster for Ahmedabad. So the latest announcement hurts the sentiments and the interests of Maharashtra.

But, managed skilfully, it could be something that can be used to build up a long term anti-BJP campaign. The MVA government is still vulnerable to being shaken and perhaps even ousted—the manner in which the Palghar lynching was exploited by the news media is seen as an attempt to show Thackeray and his government in a poor light. The BJP will not rest till it snatches back Maharashtra. Pawar wants to protect the MVA from that and has sent out a warning to the Modi establishment that he too has the ability to strike back should the need arise.