"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.
With 4,203 confirmed cases of COVID-19, Maharashtra has the highest number of cases in the country as of April 20, 2020. Of these, 507 have been cured, and 223 have died. In this blog, we summarise some of the key decisions taken by the Government of Maharashtra for containing the spread of COVID-19 in the state.
Measures taken prior to lockdown
By March 12, the state had registered 11 cases of COVID-19. Consequently, the state government took measures to: (i) prepare hospitals for screening and testing of patients, and (ii) limit mass gathering given the highly contagious nature of the disease. The measures taken by the government before the lockdown are summarised below.
Health Measures
On March 14, the government notified the Maharashtra COVID-19 regulations to prevent and contain the spread of COVID-19 in the state. Key features of the regulations include: (i) screening of COVID-19 patients in hospitals, (ii) home quarantine for people who have travelled through the affected areas, and (iii) procedures to be followed in the containment zones, among others.
Movement Restrictions
On March 15, with 31 COVID-19 cases in the state, the Department of Public Health ordered the closure of cinema halls, swimming pools, gyms, theatres, and museums until March 31. On March 16, all educational institutions and hostels in the state were closed till March 31. The teaching staff was advised to work from home. All exams were also deferred until March 31.
Administrative Measures
On March 13, the Maharashtra government constituted a high-level committee to formulate guidelines for mitigating of the spread of COVID-19 in the state. The responsibilities of the committee included: (i) taking a daily review of the status of COVID-19 in the state, and (ii) implementing the guidelines issued by the World Health Organisation and the Ministry of Health.
On March 17, the first casualty due to COVID-19 occurred in the state. On March 19, the government put restrictions on meetings in the government offices and issued safety guidelines to be followed in these meetings.
On March 20, considering the unmitigated spread of COVID-19 in Mumbai, Pune and Nagpur, the attendance in government offices was restricted to 25%. Subsequently, on March 23, the government limited the attendance in government offices to 5% across the state.
Measures taken post-lockdown
To further restrict the movement of individuals, in order to contain the spread of the disease, the state government enforced a state-wide lockdown on March 23. This lockdown, applicable till March 31, involved: (i) closing down of state borders, (ii) suspension of public transport services, and (iii) banning the congregation of more than five people at any public place. Entities engaged in the supply of essential goods and services were excluded from this lockdown. This was followed by a nation-wide lockdown enforced by the central government between March 25 and April 14, now extended till May 3. Before the extension announced by the central government, the state government extended the lockdown in the state till April 30.
On April 15, the Ministry of Home Affairs issued guidelines on the measures to be taken by state governments until May 3. As per these guidelines, select activities will be permitted in less-affected districts from April 20 onwards to reduce the hardships faced by people. Some of the permitted activities are (i) agriculture and related activities, (ii) MNERGA works, (iii) construction activities, (iv) industrial establishments, (v) health services, (vi) certain financial sector activities among others subject to certain conditions.
Welfare Measures
To address the hardship being faced by residents of the state due to lockdown, the state took several welfare measures summarised as follows:
On March 30, the School Education Department issued directions to all schools in the state to postpone the collection of school fees until the lockdown is over.
The Department of Tribal Development issued directions to provide food/dietary components at home to women beneficiaries and children under Bharat Ratna Dr A.P.J. Abdul Kalam Amrut Aahar Yojana.
The state government issued directives to the private establishments, industries and companies to pay full salaries and wages to their employees.
On April 7, the state Cabinet decided to provide wheat and rice at a subsidised price to all Above Poverty line ration card holders and Shiv Bhojan at Rs 5 for next three months in all Shiv Bhojan centres.
On April 17, the Housing Department notified that landlords/house owners should defer the rent collection for three months. No eviction will be allowed due to non-payment of rent during this period.
Administrative Measures
On March 29, the public works department issued directions suspending the collection of tolls at PWD and MSRDC toll plazas for goods transport until further direction.
MLA Local Development Program: Under MLALAD program, a one-time special exception to use the MLALAD funds was given to legislators for the purchase of medical equipment and materials for COVID-19 during the year 2020-21.
Analysing the impact on the economy of the state: On April 13, the government constituted an Expert Committee and a Cabinet Sub-Committee to analyse the implications of COVID-19 on the economy of the state. These committees will also suggest measures to revive the economy of the state.
Orders relating to Mumbai city
On April 8, the city administration made it compulsory for all people to wear masks in public places.
On April 10, the Commissioner of Police, Greater Mumbai issued an order prohibiting any kind of fake or distorted information on all social media and messaging applications. The order is valid until April 24.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
