Raghuram Rajan panel submitted report on Criteria for Special Category Status to Government

The committee headed by the former Chief Economic Advisor Raghuram Rajan (now RBI governor) submitted its report on 26 September 2013 to the Union Government.

The committee headed by the former Chief Economic Advisor Raghuram Rajan (now RBI governor) submitted its report on 26 September 2013 to the Union Government. The committee was appointed by the Union Government of India to decide the criteria for granting special category status to states.

According the criteria given by the report Odisha, Bihar least developed states and Goa and Kerala are most developed states.

Highlights of the report

1. According to the report depending upon their Multi Dimensional Index (MDI) scores 28 states should be divided into three categories.
• Least developed
• Less developed
• Relatively developed
2. The report suggested that irrespective the allocation of funds,each state should get a basic fixed allocation and an additional allocation depending on its development needs and development performance.
3. The report also presented the allocation methodology.

Based on Multi Dimensional Index (MDI) scores top seven developed stats are Goa, Kerala, Tamil Nadu, Punjab, Maharashtra, Uttarakhand and Haryana.

Based on the Multi Dimensional Index (MDI) scores the 10 least developed states are Odisha, Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Arunachal Pradesh, Assam, Meghalaya, Uttar Pradesh and Rajasthan.

The committee was appointed in the background of raising demand for special category status by states like Bihar, west Bengal, Orissa, Tamil Nadu and Jharkhand.

About Special Category Status criteria

• The special status is given to certain states depending on their resources and geography. Some of the features required to grant Special Category Status are Low Population density, Hilly and difficult terrain , Location of states, Economic and Infrastructural backwardness and Non viable nature of state finances
• Special category states will get 90 Percent of plan assistance is given as grants and 10 percent as loan. They will also get 30 per cent of the Centre's gross budgetary support for Plan expenditure.
• Special category states get significant excise duty concession. It will helpful to states to attract industries to locate manufacturing units with their states.
• Special status category states include the seven Northeastern states (Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura), Sikkim, Uttarakhand, Jammu and Kashmir and Himachal Pradesh.

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