Special Category Status for states
The Central government has filed a counter affidavit in the Supreme Court expressing its inability to give Special Category Status (SCS) to Andhra Pradesh and said all commitments under the A.P. Reorganisation Act (APRA), 2014 had been addressed.
What is the economic rationale for the demand and how serious are the economic challenges for Andhra?
- When the state was divided, Andhra not only lost a capital but also an important industry hub, which was in and around Hyderabad. The contribution of agriculture to state GDP is higher for Andhra than its neighbouring states.
- In fact, today it is arguably the highest in South. This is also a reflection of a lower level of industrialization and along with it a lower per capita income and again, the lowest in South.
- Much of this is because of Hyderabad, which political analysts argue has gone on to make Telangana, a city-centric state, with the city still an important growth engine and revenue source for Telangana. Today, the per capita income for Telangana is at par with states like Maharashtra and Tamil Nadu, and many see this as largely on account of Hyderabad.
What is Special Category Status?
There is no provision of SCS in the Constitution; the Central government extends financial assistance to states that are at a comparative disadvantage against others. The concept of SCS emerged in 1969 when the Gadgil formula (that determined Central assistance to states) was approved.
Some prominent guidelines for getting SCS status:
- Must be economically backward with poor infrastructure.
- The states must be located in hilly and challenging terrain.
- They should have low population density and significant tribal population.
- Should be strategically situated along the borders of neighbouring countries.
What kind of assistance do SCS States receive?
- The SCS States used to receive block grants based on the Gadgil-Mukherjee formula, which effectively allowed for nearly 30 per cent of the Total Central Assistance to be transferred to SCS States as late as 2009-10.
- Following the constitution of the NITI Aayog (after the dissolution of the Planning Commission) and the recommendations of the Fourteenth Finance Commission (FFC), Central plan assistance to SCS States has been subsumed in an increased devolution of the divisible pool to all States (from 32% in the 13th FC recommendations to 42%) and do not any longer appear in plan expenditure.
- The FFC also recommended variables such as “forest cover” to be included in devolution, with a weightage of 7.5 in the criteria and which could benefit north-eastern States that were previously given SCS assistance. Besides, assistance to Centrally Sponsored Schemes for SCS States was given with 90% Central share and 10% State share.
When was the first Special Category status bestowed?
The NDC first accorded SCS in 1969 to Jammu and Kashmir, Assam and Nagaland. Over the years, eight more states were added to the list — Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and, finally, in 2010, Uttarakhand. Until 2014-15, SCS meant these 11 states received a variety of benefits and sops.
Considering special status to any new State will result in demands from other States and dilute the benefits further. It is also not economically beneficial for States to seek special status as the benefits under the current dispensation are minimal. States facing special problems will be better off seeking a special package.
The Law Commission of India has submitted a report to the government recommending “cashless” gambling in sports as a means to increase revenue and deal a blow to unlawful gambling.
- Since it is impossible to stop illegal gambling, the only viable option left is to “regulate” gambling in sports.
- It will increase revenue and deal a blow to unlawful gambling. The money generated can be used for public welfare activities.
- A country as poor as India should not allow ‘legalised gambling’. Such a move would leave the poor poorer and only vested interests want legalisation of gambling.
- Socio-economic and cultural circumstances of the country are not pragmatic to accept legalised gambling activities as it is still treated as a social stigma.
- It may also prompt future generations to take unethical paths.
Law commission recommendations:
- The revenue from gambling should be taxable under laws like Income Tax Act, the Goods and Services Tax Act.
- Transactions between gamblers and operators should be linked to their Aadhaar and PAN cards so that the government could keep an eye on them.
- There is a need for classification of ‘proper gambling’ and ‘small gambling.’ Proper gambling would be for the rich who play for high stakes, while small gambling would be for the low-income groups.
- The government should introduce a cap