"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.
As of April 30, Telangana has 1,012 confirmed cases of COVID-19 (9th highest in the country). Of these, 367 have been cured, and 26 have died. In this blog, we summarise some of the key decisions taken by the Government of Telangana for containing the spread of COVID-19 in the state and relief measures taken during the lockdown.
Movement Restrictions
For mitigating the spread of COVID-19 in the state, the Government of Telangana took the following measures for restricting the movement of people in the state.
Closure of commercial establishments: On March 14, the government ordered for the closure of cinema halls, amusement parks, swimming pools, gyms and museums until March 21 which was later extended to March 31.
Lockdown: To further restrict the movement of people, the state and central governments announced lockdown in the state and country. The lockdown included: (i) closing down state borders, (ii) suspension of public transport services, (iii) prohibiting congregation of more than five people. The entities providing essential commodities and services were exempted from these restrictions.
Starting from April 20, the central government allowed certain activities in less-affected districts of the country. However, on April 19, the state government decided not to allow any relaxation in Telangana until May 7.
Health Measures
Telangana Epidemic Diseases (COVID-19) Regulations, 2020: On March 21, the government issued the Telangana Epidemic Diseases (COVID-19) Regulations, 2020. The regulations are valid for one year. Key features of the regulations include:
(i) All government and private hospitals should have dedicated COVID-19 corners,
(ii) People who had travelled through the affected areas should be home quarantined for 14 days,
(iii) Procedures to be followed in the containment zones among others.
Private Hospitals: On March 22, for increasing the availability of healthcare facilities in the state, the government issued an order prohibiting private hospitals from performing any elective surgeries. The hospitals were also instructed to have separate counters for respiratory infections.
Increasing the health workforce in the state: On March 30, the government issued notification for the recruitment of medical professionals on a short term basis.
Prohibition on spitting in public places: On April 6, the Department of Health, Medical and Family Welfare department banned spitting of paan, any chewable tobacco or non-tobacco product, and sputum in public places.
Welfare measures
To mitigate the hardships faced by the people, the government took various welfare measures. Some of them are summarized below:
Relief assistance: On March 23, the government announced the following measures:
Factories: On March 24, the government directed the management of factories to pay the wages to all workers during the lockdown period.
Migrant Workers: On March 30, the government decided to provide 12 kg of rice or atta and one time of support of Rs 500 to all migrant workers residing in the state.
Regulation of school fees: On April 21, the government ordered all private schools not to increase any fees during the academic year of 2020-21. The schools will charge only tuition fees on a monthly basis.
Deferment of collection of rent: On April 23, the government notified that house owners should defer the rent collection for three months. Further, the owners should collect the deferred amount in instalments after three months.
Administrative Measures
Deferment of salaries: The government announced 75% deferment of salaries of all the state legislators, chairperson of all corporations and elected representatives of all local bodies. The government employees will have salary deferment from 10% to 60%. Employees of the Police Department, Medical and Health Department, and sanitation workers employed in all Municipal Corporations and Municipalities are exempted from deferment of salary.
Chief Minister's Special Incentives: The government granted special incentives to certain categories of employees as follows:
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
