The Centre intends to use the recent executive and legislative action to reiterate its reform agenda to the States in the National Development Council (NDC) Meeting on December 27.
Although it is well aware that States such as Bihar will again press the demand for Special Category status, the Government is hopeful of addressing key issues, Minister of State for Planning and Parliamentary Affairs Rajeev Shukla told Business Line in an interview. Excerpts:
The NDC meeting scheduled for December 27 is set to be stormy. What is your view on this?
The overarching goal of the 12th Plan, as proposed in the draft, is to achieve ‘faster, sustainable and more inclusive growth.’ Twelve key economic challenges and priority areas have been identified for achieving this. These are, enhancing the capacity of growth, better preventive and curative healthcare, enhancing skills and faster generation of employment, improved access to quality education, managing the environment, managing urbanisation, markets for efficiency and inclusion, rural transformation and sustained growth of agriculture, decentralisation, empowerment and information, accelerated development of transport infrastructure, technology and innovation and securing the future of India.
I expect the NDC to discuss threadbare and approve these, if necessary, with qualitative improvements.
Which issues do you expect the States to raise?
Many State-specific issues are likely to be raised, such as inclusion of more districts under the Backward Region Grant Fund (BRGF), grant of special category status, extension of Integrated Action Plan to wider areas and request for funds in the form of ‘Green Bonus.’
What will be the Centre’s strategy?
The agenda for growth has been set after the defeat of the motion against foreign direct investment (FDI) in retail. This also paved the way for consideration and passage of key economic Bills such as Banking Bill (both in Lok Sabha and Rajya Sabha) and Companies Bill (in Lok Sabha).
So, the Government’s victory in debate on FDI can be treated as a stepping stone for further reform. Combining this with the focus on inclusive growth will be the key strategy.
The Planning Commission is in constant touch with State Governments. Every year, Annual Plans for each State are finalised after detailed discussions with them. What we should be discussing is the more optimal and effective use of available resources, as opposed to just increasing expenditure.
Do you think special status for three States, including Bihar, will also be discussed?
States, especially Bihar, are likely to raise this issue. The status of special category has been granted in the past by the NDC to some States that are characterised by a number of features necessitating special consideration. These include, hilly and difficult terrain, low population density, sizeable share of tribal population, strategic location along borders with neighbouring countries, economic and infrastructural backwardness and non-viable nature of State finances.
States in these categories have a low resource base and are not in a position to mobilise resources for their development needs, even though the per capita income of some of these States is relatively high.
Moreover, a number of these States were carved out of former Union territories or districts of some other State, necessarily involving creation of overheads and administrative infrastructure that was out of proportion to their natural resource base.
The Governments of Bihar, Jharkhand, Rajasthan and Odisha have requested Special Category status. The Planning Commission is examining the matter.
However, Bihar and Jharkhand have been given one-time additional Central assistance of Rs 51 crore, each while Rajasthan and Odisha got Rs 60 crore each. At the same time, Bihar and Odisha were given Rs 1,500 crore and Rs 250 crore, respectively, as Special Plan under BRGF/Special Assistance in addition to Central assistance during 2012-13.
Can you shed more light on the ‘Sin Tax’ being proposed to curb the use of alcohol and tobacco?
A designated ‘Sin Tax’ to finance a part of the health budget can lead to reduced consumption of products that are harmful to health, such as tobacco and alcohol. We have just flagged this as a suggestion in the draft 12{+t}{+h} Plan. A final view will be taken after suggestions from various States.
How do you plan to raise resources to fund social programmes to be rolled out before the 2014 general elections?
We have no dearth of human and knowledge resources. Further, there is increased inclination towards public-private partnerships. The Government may also bring in many forward-looking reform initiatives at an appropriate time.
In the previous Plans, we mobilised sufficient funds for innovative schemes, such as MGNREGA, NRHM etc. Similarly, when the Government plans new social sector schemes, it would definitely mobilise the required funds.