Spl category status to states does not help

Bihar Chief Minister Nitish Kumars demand for special category status for his state has led the Planning Commission question the very utility of such a status,currently available to hilly states and the North East. We have realised that thespecial category status conferred to Himachal Pradesh,Uttaranchal and the North Eastern states has not helped them to industrialise. Instead,it has only caused heartburn among neighbouring states. They are complaining that industrial activity from their states is being relocated to neighbouring states, Plan panel member Anwarul Hoda told The Indian Express.

The biggest lure for states to seek special category status is the tax exemption and a 90:10 funding pattern,wherein 90 per cent of Central funds to such states are in the form of grants and the balance 10 per cent in the form of loans. Making a case for doing away with the said status,he suggested that the government should devise a comprehensive and well-designed infrastructure package for these states to lure industry.

Unless the states are provided with a special infrastructure package,the effectiveness of tax sops under the special category status will be limited. We have been extending such a status for the North Eastern status for over 10 years now. Has it helped them? Hoda questioned. Responding to a query on the effectiveness of such a status sought by Nitish Kumar for Bihar,the Plan panel member cited that if such a status has not helped those states,it will not make any difference to Bihar either.

Bihar seeking such a status could trigger similar demands from other backward states like Jharkhand and Chhattisgarh. It would not be out of place to mention here that most industrial units have come up in the foothills of states like Himachal Pradesh and Uttaranchal,primarily due to lack of quality infrastructure in the interior.