 "Naveen opposes proposal to scrap special category status")
“Unfortunately, while we find Odisha has been categorised as least developed state, the special category status has not been accorded to us. Therefore, we will continue our fight for this just cause,” said chief minister Naveen Patnaik.
The Centre had constituted a six-member committee headed by Raghuram Rajan, former chief economic adviser to the finance ministry and incumbent Governor of Reserve Bank of India (RBI) to fix a new criterion for determining backwardness of states.
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The Rajan committee report places Odisha as the least developed state along with Madhya Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Jharkhand, Meghalaya, Rajasthan and Uttar Pradesh.
The panel has proposed a general method for allocating funds from the Centre to the states based on both a state's development needs as well as its development performance and said the special category system can be done away with.
All states are subject to Central financial assistance based on their need. The assistance is released by the Planning Commission of where 70 per cent of the fund is in the form of loans and the balance 30 per cent is a grant. However, for special category states, 10 per cent is loan and 90 per cent is in form of grant.
The Rajan committee report has suggested that each state should get a basic fixed allocation and an additional allocation depending on its development needs and development performance measured by a multi dimensional index (MDI).
Odisha has got maximum score in the MDI, justifying its plea to get maximum funds. However, the state government is not satisfied with the proposal. “We have been demanding for special category status for the last 40 years. We demand allocation of funds on 90-10 basis and tax exemption on new investments. The Congress leaders gave the impression that the committee report will address these issues,” Patnaik said criticising the Union finance minister's claim that the Rajan committee report is enough to satisfy the need of the states.
The Opposition Congress, however, welcomed the proposal of the report.
“The UPA government has shown us a way for development of the least developed states along with Odisha. We welcome this proposal,” said senior Congress leader Bhupinder Singh.
State Bharatiya Janata Party (BJP) leaders said that based on the Rajan committee's recommendations, Odisha has a right to be included in the list of special category states. “If the committee says that Odisha is the least developed state, it should be included in the special category status,” said Biswabhushan Harichandan, senior leader of BJP.
The grant of special category tag to a state is determined by a host of criteria- hilly and difficult terrain, low population density or sizeable share of tribal population, sharing international borders, economic and infrastructural backwardness and non-viable nature of state finances.