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Subject: Polity

  • Death Penalty Abolition Debate

  • Special Category Status and States

    • What is ‘Special Category’ status?
      What benefits do states having ‘Special Category’ status enjoy?
    • Who accords the category status to state and how?
    • Which states held Special category status?
    • Lacunas in the working of Special Category status
    • Why the status has been removed?
    • Way ahead now

    What is ‘Special Category’ status?

    • ‘Special category’ status is a classification given by Centre to assist in development of those states that face geographical & socio-economic disadvantages like hilly terrains, strategic international borders, economic & infrastructural backwardness and non-viable state finances.
    • The classification came into existence in 1969 as per the suggestion given by the Fifth Finance Commission, set up to devise a formula for sharing the funds of Central govt. among all states.

    What benefits do states having ‘Special Category’ status enjoy?

    • Significant concession in excise & customs duties, income tax and corporate tax
    • 30 percent of planned expenditure (central budget) goes to ‘special category’ states
    • Special Category states are benefited because of Normal Central Assistance which was skewed in favour of these states. These states get more funds in terms of NCA and most part of these funds was in the form of grants rather than loans.
    • Special Central Assistance given to SCS is also an additional amount which can be used by the concerned state for economic development.
    • Centre bears 90% of the state expenditure (given as grant) on all centrally-sponsored schemes and external aid while rest 10% is given as loan to state. For general category, the respective grant to loan ratio is 30:70 where as external aid is passed on in the same ratio as received at the centre.
    • Unspent money does not lapse and gets carry forward.

    Hence, special-category status catalyses the inflow of private investments and generates employment and additional revenue to state. Since centre bears 90% of state expenditure on all centrally-sponsored schemes, state can take more welfare-based schemes from the new savings.

    Further, more grants from centre helps in building state infrastructure and social sector projects. As a result, special-category state gets to bridge its development deficit.

    Who accords the category status to state and how?

    Special Category’ status had been granted in the past by the Union government to States having certain characteristics based on the recommendations of the National Development Council.

    These include

    i) hilly terrain;

    ii) low population density and/or sizeable share of tribal population;

    iii) strategic location along borders with neighbouring countries;

    iv) economic and infrastructure backwardness; and

    v) non-viable nature of State finances.

    Special Category States

    source

    Which states held Special category status?

    11 states used to have ‘special category’ status, namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Jammu & Kashmir, Himachal Pradesh, and Uttarakhand.

    Lacunas in the working of Special Category status

    • Firstly, the way Special Category Status were assigned to a state has been a matter of debate. Various committees used different parameters to classify a state in Special Category status.
    • Some states lobby central government to classify them in special category. This was to be corrected and the consent of majority of state must be taken before granting a special category status to any state.
    • Moreover there should have been a general consensus among states related to principle used for granting the SCS.
    • Secondly, data reveals that even after awarding Special category status not much economic progress has been noticed among states. This may mean that for economic development it’s important to follow sound economic policy. Benefit of SCS may act as a stimulus but rest depends on the individual state policy.
    • Third, the amount of proceeds that states receive has increased after 14th finance commission. So the structure does not seem to have any specific relevance in present context.

    Why has the status been removed now?

    The Finance Ministry’s reasoning for withdrawing the status is that the higher 42% devolution takes into account all needs of states.

    Way ahead?

    Following the demand for Special Status by Bihar, a committee was appointed under Dr. Raghuram Rajan in 2013. This committee suggested that States classified as ‘Special Category States’ and those seeking inclusion in that category, would find that their need for funds and special attention more than adequately met by a basic allocation to each State and the categorisation of some as ‘least developed’.

    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.

    References:

  • Right To Privacy

  • MGNREGA Scheme

  • North-East India – Security and Developmental Issues

     

  • Judicial Appointments Conundrum Pre-NJAC Verdict

     

    Click here to follow the Post-NJAC Verdict Developments – MOP, RTI, Security Clause, RTI, JSA  

    Instead of seeing the NJAC verdict as one that leads to a confrontation between the Parliament and the judiciary, the executive must use this as an opportunity to help the Supreme Court in preparing an institutional design so that appointments are fair and transparent.

     

    Two days after the Supreme Court pronounced its verdict on the 99th Constitution Amendment Act and the National Judicial Appointments Commission (NJAC), declaring them to be ultra vires the Constitution.

    Questions on judicial review

    The reaction of the executive to the NJAC verdict raises the fundamental question,

    “Should the exercise of power of judicial review depend upon the will of the Parliament?”

    Indian Constitution, unlike the Constitutions of USA and Australia, does not have an express provision of separation of powers but its sweep, operation and visibility are not unclear.

    While it is the Parliament’s prerogative to amend the Constitution and make laws, the duty to decide whether the basic elements of the constitutional structure have been transgressed has been placed on the judiciary.

    The power to strike down offending amendments to the Constitution on the touchstone of basic structure can be exercised by the superior judiciary alone, uninfluenced by the will of the Parliament.

    Our Constitution has given the power of judicial review to the unelected superior judiciary to declare ‘unconstitutional’ a legislative act, once it is found to be violative of the basic structure.

     

    What remains of democracy if there is no rule of law?

    The institutional arrangement at the heart of our democracy provides that the will of the people, as reflected in the decisions their elected representatives, is subject to the will of the Constitution, as reflected in the decisions of an independent judiciary.

    Parliamentary supremacy refers to the power of Parliament to make laws within the limits imposed by the Constitution.

    It also denotes the supremacy of Parliament over the executive, primarily through the accountability of the Council of Ministers to Parliament.

    All the three organs of the state derive the power and jurisdiction from our Constitution. Each must operate within the sphere allotted to it.

    Judicial function is also a very important sovereign function of the state and provides the foundation for rule of law.

    Is it good that judges appoints Judges in India?

    It is not wholly correct to say that judges appoint judges in India as consultative participation of the executive is present in the institutionalised procedure prescribed after the Third Judges case.

    But assuming it to be so, ours is perhaps the only country where the government is the biggest litigant before the courts, Isn’t it?

    Why is this so?

    We are one of the very few countries where actions of the political executive in diverse fields, ranging from violation of human rights to wrongful distribution of natural resources and wide range of issues which have huge political ramifications, are brought before the superior judiciary in the public interest litigation (PIL) .

    Can judges who are appointed with the direct say of the government be relied upon to deliver neutral and high-quality decisions in such matters?

    It is no exaggeration to say that appointment processes shape the ability of courts to hold political institutions to account.

    Veto to non-judicial members

    In the Second Judges case, the nine-judge Bench exposited that appointment of judges to High Courts and the Supreme Court forms an integral part of the basic structure of our Constitution.

    Therefore, the executive cannot interfere with the primacy of judiciary in the matter of appointments.

    The NJAC’s flawed composition consisted of the fact that it merged certain components, reflected in the inclusion of Law Minister and two eminent persons and giving any two members the power to veto the decision of the other four.

    This directly affected the independence of judiciary in the judicial appointments process.

    Way Forward to Fair and Transparent system

    Democratic values are strengthened not only by a strong legislature but also by a strong judiciary so that together a mutually respectful and independent partnership on the public’s right to justice is maintained.

    The judges who delivered the judgment in the NJAC case also hold the view that an improvement in the working of the collegium system is the need of the hour.

    Demands of the Constitution can override the wishes of the people expressed through elected governments.

    These are at the very core of a democratic commitment to judicial independence and constitutional supremacy.

    In the words of Alexander Hamilton, one of the framers of American Constitution, “where the will of the legislature declared in the statutes is in opposition to the Constitution, the judges ought to be governed by the latter, rather than former.”

    Published with inputs from Arun