6 AUGUST 2016

Ø  A growing clamour for Special Category Status in Andhra Pradesh has led to State-wide protests, and heated debates in Parliament. Chief Minister Chandrababu Naidu, under immense pressure, met Prime Minister Narendra Modi on Friday seeking a resolution of this issue by the end of the Parliament session on August 12th. The Constitution does not include any provision for categorisation of any State in India as a Special Category Status (SCS) State. But, recognising that some regions in the country were historically disadvantaged in contrast to others, Central plan assistance to SCS States has been granted in the past by the erstwhile Planning Commission body, National Development Council (NDC). The NDC granted this status based on a number of features of the States which included: hilly and difficult terrain, low population density or the presence of sizeable tribal population, strategic location along international borders, economic and infrastructural backwardness and non-viable nature of State finances. The SCS States used to receive block grants based on the Gadgil-Mukherjee formula, which effectively allowed for nearly 30 per cent of the Total Central Assistance to be transferred to SCS States as late as 2009-10. Assistance to be transferred to SCS States as late as 2009-10. Following the constitution of the NITI Aayog (after the dissolution of the Planning Commission) and the recommendations of the Fourteenth Finance Commission (FFC), Central plan assistance to SCS States has been subsumed in an increased devolution of the divisible pool to all States (from 32% in the 13th FC recommendations to 42%) and do not any longer appear in plan expenditure. The FFC also recommended variables such as “forest cover” to be included in devolution, with a weightage of 7.5 in the criteria and which could benefit north-eastern States that were previously given SCS assistance. Besides, assistance to Centrally Sponsored Schemes for SCS States was given with 90% Central share and 10% State share. Apart from Andhra Pradesh which is in the news lately, Bihar and Odisha had recently demanded SCS status but they have not been granted the same as they did not meet the criteria. Following the bifurcation of A.P., Andhra lost a large volume of its revenue due to Hyderabad remaining the capital of Telangana. In a debate in the Rajya Sabha on the A.P. Reorganisation Act on February 20, 2014, then Prime Minister Manmohan Singh had said that SCS would be “extended to the successor State of Andhra Pradesh ... for a period of five years.” This oral submission by the then PM has been the basis for A.P.’s claim to the status.

Ø  The Indian Railways plans to introduce Maglev trains that can run at a top speed of 500 km an hour, in a bid to lure passengers from airlines. After receiving a proposal from a foreign investor, the Railways last week floated an expression of interest (EoI) for calling of a global tender to develop trains and tracks that operate on the principle of magnetic levitation (Maglev), according to a top Railway official. According to the document, the developer will be responsible for designing, testing, building, running trials and operations of the levitation-based system between two key cities at a distance of 200-500 km. Maglev trains are in operation in China, Japan, Germany and South Korea. As the trains are propelled by magnetic forces, friction is eliminated, making transportation free of noise and vibration. The government has called for a ‘fail-safe’ system in which passengers and cargo are safe even in case of “failure of any system of the train tracks or controls.” The government said the developer shall be responsible for a third-party inspection of the entire train system. The developer will be given a free-hand in running the train services, fixing schedule, fares and add-on services on board, the EoI document added. The developer will be required to submit the funding plan for the investment along with their audited financial statements for the last five years.