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"No one can ignore Odisha's demand. It deserves special category status. It is a genuine right," said Odisha Chief Minister, Naveen Patnaik, earlier this month. The Odisha State assembly has passed a resolution requesting special category status and their demands follow Bihar's recent claim for special category status. The concept of a special category state was first introduced in 1969 when the 5th Finance Commission sought to provide certain disadvantaged states with preferential treatment in the form of central assistance and tax breaks. Initially three states Assam, Nagaland and Jammu & Kashmir were granted special status but since then eight more have been included (Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and Uttarakhand). The rationale for special status is that certain states, because of inherent features, have a low resource base and cannot mobilize resources for development. Some of the features required for special status are: (i) hilly and difficult terrain; (ii) low population density or sizeable share of tribal population; (iii) strategic location along borders with neighbouring countries; (iv) economic and infrastructural backwardness; and (v) non-viable nature of state finances. [1. Lok Sabha unstarred question no. 667, 27 Feb, 2013, Ministry of Planning] The decision to grant special category status lies with the National Development Council, composed of the Prime Minster, Union Ministers, Chief Ministers and members of the Planning Commission, who guide and review the work of the Planning Commission. In India, resources can be transferred from the centre to states in many ways (see figure 1). The Finance Commission and the Planning Commission are the two institutions responsible for centre-state financial relations.
Figure 1: Centre-state transfers (Source: Finance Commission, Planning Commission, Budget documents, PRS)
Planning Commission and Special Category The Planning Commission allocates funds to states through central assistance for state plans. Central assistance can be broadly split into three components: Normal Central Assistance (NCA), Additional Central Assistance (ACA) and Special Central Assistance. NCA, the main assistance for state plans, is split to favour special category states: the 11 states get 30% of the total assistance while the other states share the remaining 70%. The nature of the assistance also varies for special category states; NCA is split into 90% grants and 10% loans for special category states, while the ratio between grants and loans is 30:70 for other states. For allocation among special category states, there are no explicit criteria for distribution and funds are allocated on the basis of the state's plan size and previous plan expenditures. Allocation between non special category states is determined by the Gadgil Mukherjee formula which gives weight to population (60%), per capita income (25%), fiscal performance (7.5%) and special problems (7.5%). However, as a proportion of total centre-state transfers NCA typically accounts for a relatively small portion (around 5% of total transfers in 2011-12). Special category states also receive specific assistance addressing features like hill areas, tribal sub-plans and border areas. Beyond additional plan resources, special category states can enjoy concessions in excise and customs duties, income tax rates and corporate tax rates as determined by the government. The Planning Commission also allocates funds for ACA (assistance for externally aided projects and other specific project) and funds for Centrally Sponsored Schemes (CSS). State-wise allocation of both ACA and CSS funds are prescribed by the centre. The Finance Commission Planning Commission allocations can be important for states, especially for the functioning of certain schemes, but the most significant centre-state transfer is the distribution of central tax revenues among states. The Finance Commission decides the actual distribution and the current Finance Commission have set aside 32.5% of central tax revenue for states. In 2011-12, this amounted to Rs 2.5 lakh crore (57% of total transfers), making it the largest transfer from the centre to states. In addition, the Finance Commission recommends the principles governing non-plan grants and loans to states. Examples of grants would include funds for disaster relief, maintenance of roads and other state-specific requests. Among states, the distribution of tax revenue and grants is determined through a formula accounting for population (25%), area (10%), fiscal capacity (47.5%) and fiscal discipline (17.5%). Unlike the Planning Commission, the Finance Commission does not distinguish between special and non special category states in its allocation.
Listed below are some key Bills pending in Parliament that are expected to address various aspects of corruption in India. These Bills need to be scrutinized carefully by both lawmakers and citizens alike, so as the strengthen them. Citizen groups can engage in a variety of ways to get their views heard, which have been described in the primer on Engaging with Policy Makers. Some of these anti-corruption Bills are listed in the current Winter Session for consideration and passing. These are marked in red below. (The full list of all Bills being considered in the Winter Session can be accessed here.) Each Bill below has been hyperlinked to a page which has the text of the Bill, the report of the Standing Committee, PRS analysis, and other relevant documents, all in one place. Spreading this message to a number of interested people will be a very useful contribution by all those interested in building greater engagement of people with what happens in Parliament.
Bill |
Date of introduction |
Status |
Brief description |
The Lokpal and Lokayuktas Bill, 2011 (Listed for passing) | December 22, 2011 | Passed by Lok Sabha on 27 Dec 2011. Report of Rajya Sabha Select Committee submitted on November 23, 2012. | It seeks to establish the office of the Lok Pal at the centre and Lokayuktas in states for inquiring into complaints against certain public servants.The Bill once passed shall be applicable to states if they give their consent to its application. |
The Whistle Blowers Protection Bill, 2011 (Listed for passing) | August 26, 2010 | Passed by Lok Sabha on December 27, 2011. Pending in Rajya Sabha | It seeks to protect whistleblowers (person making a disclosure related to acts of corruption, misuse of power or criminal offence).Under the Bill any person including a public servant may make such a disclosure to the Central or State Vigilance Commission.The identity of the complainant shall not be disclosed. |
The Benami Transactions (Prohibition) Bill, 2011 | August 18, 2011 | Standing Committee submitted its Report on June 26, 2012 | The Bill prohibits all persons from entering into benami transactions (property transactions in the name of another person).Any benami property shall be confiscated by the central government.It seeks to replace the existing Benami Transactions (Prohibition) Act, 1988. |
The Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Bill, 2011 (Listed for passing) | March 25, 2011 | Standing Committee submitted its Report on March 29, 2012 | Indiais a signatory to the UN Convention against corruption. The Bill is necessary for India to ratify the Convention.The Bill makes it an offence to accept or offer a bribe to foreign public officials and officials of public international organizations in order to obtain or retain international business |
The Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011 | December 20, 2011 | Standing Committee submitted its Report on August 28, 2012 | It requires every public authority to publish a citizen charter within six months of commencement of the Act.The charter should detail the goods and services to be provided and the timeline for their delivery. |
The Electronic Delivery of Services Bill, 2011 | December 27, 2011 | Standing Committee submitted its Report on August 30, 2012 | The Bill requires all public authorities to deliver all public services electronically within a maximum period of eight years.There are two exceptions to this requirement: (a) service which cannot be delivered electronically; and (b) services that the public authorities in consultation with the respective Central and State EDS Commissions decide not to deliver electronically. |
The Prevention of Money-Laundering (Amendment) Bill, 2011 (Listed for passing) | December 27, 2011 | Standing Committee submitted its Report on May 9, 2012 | The Bill Amends the Prevention of Money Laundering Act, 2002.This Bill widens the definition of offences under money laundering to include activities like concealment, acquisition, possession and use of proceeds of crime.It provides for the provisional attachment and confiscation of property (for a maximum period of 180 days). |
The National Identification Authority of India Bill, 2010 | December 3, 2010 | Standing Committee submitted its Report on December 13, 2011 | The Bill seeks to establish the National Identification Authority of India to issue unique identification numbers (called ‘Aadhaar’) to residents ofIndia.Every person residing inIndia(regardless of citizenship) is entitled to obtain an Aadhaar number after furnishing the required information.The number shall serve as an identity proof. But not as a citizenship proof. |
The Judicial Standards and Accountability Bill, 2010 | December 1, 2010 | Passed by Lok Sabha on March 29, 2012; Pending in Rajya Sabha | It replaces the Judges (Inquiry) Act, 1968. It provides for enforceable standards for the conduct of High Court and Supreme Court judges.The Bill requires judges and their spouses and children to declare their assets and liabilities. It also establishes a process for the removal of judges of Supreme Court and High Court |
The Public Procurement Bill, 2012 | May 14, 2012 | Standing Committee Report pending | The Bill seeks to regulate and ensure transparency in the procurement process. It applies to procurement processes above Rs 50 lakh.The procuring entity shall adhere to certain standards such as (a) ensuring efficiency and economy; and (b) provide fair and equitable treatment to bidders. |
Sources: Respective Bills, PRS Legislative Research