"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.
The Lok Pal (anti-corruption body) Bill has generated widespread interest in the past few days.
The Bill is an attempt by the government, under massive pressure due to corruption charges, to gain some of its lost ground. However, civil rights activists, including Anna Hazare, Swami Agnivesh, Kiran Bedi and Arvind Kejriwal, have termed the draft legislation as weak and demanded that fifty per cent of the members in the committee drafting the bill should be from the public.
But the common man appears to be in the dark about the scope of the proposed bill.
Here's an FAQ on the controversial bill.
What is the controversy between the government and Anna Hazare about?
Anna Hazare and other civil society activists have proposed a draft Lok Pal Bill to tackle the menace of corruption. The Prime Minister formed a sub-committee of the Group of Ministers to discuss the issue with these activists. However, these two groups were unable to reach an agreement on the provisions of the Lok Pal Bill. According to the government, the activists demanded that the government should accept the Bill drafted by them without any changes.
What steps has the government taken to enact the Lok Pal Bill?
In January 2011, the government has formed a Group of Ministers chaired by Shri Pranab Mukherjee to suggest measures to tackle corruption, including examination of the proposal of a Lok Pal Bill.
What is the purpose of the office of Lok Pal?
The office of the Lok Pal is the Indian version of the office of an Ombudsman who is appointed to inquire into complaints made by citizens against public officials. The Lok Pal is a forum where the citizen can send a complaint against a public official, which would then be inquired into and the citizen would be provided some redressal.
What are issues that have generated debate on the Lok Pal Bill?
There are diverging views on issues such as the inclusion of the office of the Prime Minister, Ministers and Members of Parliament, inclusion of judges, and powers of the Lok Pal. Some experts contend that all public officials should be accountable while others feel that the autonomy and privilege of Parliament require the Prime Minister, Ministers, and Members of Parliament to be accountable only to Parliament.
Have there been other attempts to establish the institution of Lok Pal at the central level?
Yes. The Lok Pal Bill has been introduced eight times in the Lok Sabha (1968, 1971, 1977, 1985, 1989, 1996, 1998 and 2001). However, each time the Lok Sabha was dissolved before the Bill could be passed, except in 1985 when it was withdrawn.
Have any expert commissions made recommendations on the office of Lok Pal?
Yes, a number of commissions have made various recommendations regarding the necessity of the office of the Lok Pal, its composition, powers and functions, and jurisdiction. The commissions, which dealt with the Lok Pal include the First Administrative Reforms Commission of 1966, the National Commission to Review the Working of the Constitution of 2002 and the Second Administrative Reforms Commission of 2007. The Lok Pal Bills that were introduced were referred to various Parliamentary committees (the last three Bills were referred to the Standing Committee on Home Affairs).
What are the present laws that deal with corruption of public officials in India?
Public servants (such as government employees, judges, armed forces, and Members of Parliament) can be prosecuted for corruption under the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988. However, the Code of Criminal Procedure and the 1988 Act require the investigating agency (such as the CBI) to get prior sanction of the central or state government before it can initiate the prosecution process in a court.
Have the state governments been more successful in setting up bodies to redress public grievances against administrative acts?
So far 18 state governments have enacted legislation to set up the office of Lokayukta and Uplokayukta (deputy Lokayukta). The 18 states are: Andhra Pradesh, Assam, Bihar, Chhattisgarh, Delhi, Gujarat, Jharkhand, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Uttarakhand, and Uttar Pradesh.
Which other countries have the office of the Ombudsman for grievances?
Sweden, Finland, Denmark, the Netherlands, Austria, Portugal, Spain, New Zealand, Burkina Faso and the United Kingdom are some of the countries which have the office of an Ombudsman.
The article was published on rediff.com on April 5, 2011
