A CRITICAL ANALYSIS OF SPECIAL STATUS CATEGORY

TAMIL NADU NATIONAL LAW SCHOOL

A CRITICAL ANALYSIS OF SPECIAL STATUS CATEGORY

SUBMITTED IN THE PARTIAL FULFILLMENT OF B.COM. L.L.B (Hons.), FOURTH SEMESTER

Submitted to: PROF. M. Mahindra Prabu Submitted by: Rohit Sharma

Course Faculty: Constitutional Law II Registration no: BCO140048

Course: B.COM.LLB (Hons.)

Year: Second, IV Semester

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 A CRITICAL ANALYSIS OF SPECIAL STATUS CATEGORY

DECLARATION

I do hereby declare that the project entitled A CRITICAL ANALYSIS OF SPECIAL

STATUS CATEGORY submitted to Tamil Nadu National law school in partial
fulfillment of requirement of award of degree in undergraduate in law is a record of
original work done by me under the supervision and guidance of PROF. M. MAHINDRA
PRABU department of CONSTITUTIONAL LAW II of Tamil Nadu National law school
and has not formed basis for award of any degree or diploma or fellowship or any other
title to any candidate of any university.

Place: Trichy

Date: 08.04.16

ROHIT SHARMA

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 A CRITICAL ANALYSIS OF SPECIAL STATUS CATEGORY

PREFACE

This project is intended to carry out an extensive research on the given topic by the supervisor.
The research and analysis conducted by the researcher is bona-fide and purely for academic
purposes. The borrowed facts, data and opinions presented are from the internet media and books
according to the supervisor.

Every effort is made to keep the project error free. I would gratefully acknowledge the
suggestions to improve the project to make it more useful.

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ACKNOWLEDGEMENT

On the successful completion of this project, I would like to thank our respected mentor, our
Constitutional Law-II Lecturer, Prof. M. Mahindra Prabu who despite all of his pre-
occupations, provided me all the assistance I needed for the accomplishment of this project and
guided me while I tread on the tenebrous boulevard of ignorance. Had it not been for his support
I wouldnt be able to grasp the cognizance of something as enthralling as this. I thank him
profusely for providing me this engrossing topic to work on which helped me to learn and
relearn, to explore and re-explore our knowledge of constitutional law.

I also thank our honourable Vice Chancellor, Mr. ARUN ROY, and our esteemed Registrar, for
their inexplicable greatness to find time to educate us as and when they find an opportunity.

I would like to convey our gratitude towards our friends and batch mates who have rendered
me their valuable time and without their help this project would not have been in its present
shape and form.

No work is complete with solo endeavour, neither is mine. I thank each and every non-teaching
staff of TNNLS for their unconditional support and infinitum. I would also like to convey our
thanks to the Library Staff of TNNLS.

I am grateful to The Almighty, who has given me enough strength and blessings to work hard
and make it to the best of our ability.

Last but not the least; I thank my parents who have given me a chance to study in this esteemed
University, a heaven for legal edification.

______________________

Rohit Sharma

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Table of Contents
CHAPTER 1................................................................................................................. 4

INTRODUCTION: Special Category Concept.....................................................................4

CHAPTER 2............................................................................................................... 10

National Development Council..............................................................................10

CHAPTER 3............................................................................................................... 13

Role and Function of National Development Council.............................................13

CHAPTER 4............................................................................................................... 16

Committees say on National Development Council..............................................16

CHAPTER 5............................................................................................................... 19

Demand of Special Status Category...................................................................19

CHAPTER 6............................................................................................................... 21

CONCLUSION......................................................................................................... 21

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CHAPTER 1

INTRODUCTION: Special Category Concept

Every Constitution has its own unique character reflecting the history and disposition of its
people. India has its own beauty of history which reveals diversity in the culture and multiplicity
of people with different states which makes India a sui generis federation. There prevails
regionalism in India but still when it comes to equality, coming on same level field to get same
assistance so that equal development takes place then the Supreme Indian Constitution becomes
the guardian for all and provide equal assistance to all who are needy through an equal
provisions. Under Article 371 of Indian Constitution each state which included under the
umbrella of Special Status Category are given some extra preference than normal one.

The concept of a special category state was first introduced in 1969. The 5th Finance
Commission decided 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.1

Conditions to categorize states for special status:

The special status is given to certain states because of their inherent features, like they might
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 sizable share of tribal population;

(iii) strategic location along borders with neighboring countries;

1 See Netapedia, Special Status to States, http://www.netapedia.in/blog/?p=12 visited on 9th March, 5:25
PM (NTM)

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(iv) economic and infrastructural backwardness; and

(v) non-viable nature of state finances.2

Who gets to decide to grant the status:

The decision to grant special category status lies with the National Development Council,
composed of the Prime Minister, Union Ministers, Chief Ministers and members of the Planning
Commission, who guide and review the work of the Planning Commission. Since this has to deal
with funds transfer from Centre to state, the two bodies involved at the core are Planning
Commission and Finance Commission3. Below is an interesting split up of their respective roles
and brief calculations that are done by them.

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)

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 12th Finance
Commission recommended that the Centre give only grants, and leave it to the states to raise
loans as they wanted. Since then, the 90% grants, 10% loans formula for special-category states
is restricted to centrally-sponsored schemes and external aid. For general category states,
external aid is passed on in the exact mixture of loan and grants in which it is received at the

2 See Special Category Status and Center-Finance Relations, http://www.prsindia.org/theprsblog/?

p=2593 visited on 8th March, 4:00 PM (NTM)

3 See M. P Jain Indian Constitutional Law, 482-487, (7th Edition 2014) Lexis Nexis

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Centre. And for them, in the case of centrally-sponsored schemes, only 70% of the central
funding is given as grant.4

Allocation between non special category states is determined by the Gadgil-Mukherjee formula
which was finally revised in 2000. Gadgil formula was formulated with the formulation of the
fourth five-year plan for the distribution of plan transfers amongst the states. It was named after
the then (1969) deputy chairman of the Planning Commission Dr. D R Gadgil. The central
assistance provided for in the first three plans and annual plans of 1966-1969 lacked objectivity
in its formulation and did not lead to equal and balanced growth in the states. The National
Development Council meeting held in October 11, 1990, approved a new revised formula. This
formula came to be popularly known as Gadgil-Mukherjee formula after the name of the then
(1990) Deputy Chairman of Planning commission Dr. Pranab Mukherjee for determining the
allocation of central assistance for state plans in India. The new revised formula as approved by
NDC is given in the following table.5

Criteria Weight (%)

Population 60
Per Capita Income 25
Fiscal Management 7.5
Special Problems 7.5
Total 100

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.6

4 See Commission on Center-State Relations Center-State Financial Relations and Planning volume III

5 Ibid

6 Supra, note-1

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What benefits does a state enjoy on getting the special status:

As per Gadgil formula, a special category state gets:

Preferential treatment in federal assistance and tax breaks.

Significant excise duty concessions.
Thus, these states attract large number of industrial units to establish manufacturing
facilities within their territory leading to their economy flourishing.
The special category states do not have a hard budget constraint as the central transfer is
high.
These states avail themselves of the benefit of debt swapping and debt relief schemes
(through the enactment of Fiscal Responsibility and Budget Management Act) which
facilitate reduction of average annual rate of interest.
Significant 30% of the Centres gross budget goes to the Special category state.
In centrally sponsored schemes and external aid special category states get it in the ratio
of 90% grants and 10% loans. For the rest of the states as per the recommendations of the
12th Finance Commission, in case of centrally sponsored schemes only 70% central
funding is there in the form of grant. The rest of the states receive external aid in the
exact ratio (of grants and loans) in which it is received by the Center.7

Research Objective:

To critically analyse the role, function and process of National Development council over
Special Category Status.
To analyse the recommendations and suggestions of different committees.
To analyse the demand of Special Category Status by states namely, Bihar and Andhra
Pradesh.

Hypothesis:

National Development Council is indispensable for a sui generis federalism like India, with such
a broad federation where, it works like an apex institution or body of planning system. The
council must be backed with a constitutional provision which provides a concrete identitity.

Research Question:

7 Supra, note-3

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Whether the National Development Council needs reinvention and reform in every
section like members, criteria set by it for the category...etc?

Research Methodology:

Researcher has used method of quantitative research in which Researcher has gone through
contextual readings of different constitution books, articles on Special Category Status and
National Development Council, short write ups on the same headings from different forums like
webpage of Inter-State Secretariat, The Hindu,etc.

Review of Literature

M. Brecher on NDC states that, the NDC was established as a supreme administrative and an
advisory body on planning- it lays down policy directives invariably approved by the cabinet.
Since their inception, the NDC and its standing committee have virtually relegated the planning
commission to the status of research arm.8

H.M. Patel says that, Among the advisory body of planning commission included NDC. This
surely inaccurate as it is clear from its composition. The NDC is a body which is obviously
superior to the planning commission. It is indeed a policy making body and its recommendations
cannot regarded as policy decisions and not merely as advisory suggestions.9

K. Santhanam observes on NDC that, the position of NDC has to come to approximate to that
of super cabinet of entire Indian federation, a cabinet functioning for the government of India
and government of all states.10

A.P. Jain observed that, the NDC encroach the function which constitutionally belongs to
council of ministers at center and state levels and sometimes approves raised targets without

8 M. Brecher, Nehru-A Political Biography, 521, Oxford, 1959. See also, LaxmiKanth, Indian Polity,
Chapter 49 (4th Edition,2015), Patel Book Agency.

9 The Indian Journal of Public Administration, 460, October-December, 1959. See also, LaxmiKanth,
Indian Polity, Chapter 49 (4th Edition,2015), Patel Book Agency.

10 K. Sanathanam, Union-State Relations in India, 47, Asia Public House, 1960, See also, LaxmiKanth,
Indian Polity, Chapter 49 (4th Edition,2015), Patel Book Agency.

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prior consultation with the concerned ministry. The NDC neither by law nor by nature of its
composition is a body to take decisions on the issues of national level. It is suited to talk, debate
and advice. But it must leave the decision to center and state.11

CHAPTER 2

National Development Council

The National Development Council (NDC) or the Rashtriya Vikas Parishad, an apex body for
decision making on development matters, was set up on 6 August 1952. It was established to
strengthen and mobilize the effort and resources of the nation in support of the Plan, to promote
common economic policies in all vital spheres, and to ensure the balanced and rapid
development of all parts of the country. The Council comprises of the Prime Minister, the Union
Cabinet Ministers and Chief Ministers of all States or their substitutes, representatives of the
Union Territories and the members of the Planning Commission.12

It is a non-constitutional and non-statutory body. National Development Council came into

existence in August 1952 as a result of the resolution issued from the Cabinet Secretariat. 13 The
main Functions of the NDC, as set out in the resolution are:

1. to review the working of the national plan from time to time

2. to consider important question of social and economic policy affecting national development.

3. to recommend measures for the achievement of the aims and target set out in the National Plan
including measures to secure the active participation and cooperation of the people, improve the
efficiency of the administrative services, ensure the fullest development of the less advanced

11 A.P. Jain, Food Problem and NDC, Times of India, 6 May, 1959, (Food Minister at Cabinet). See also,
LaxmiKanth, Indian Polity, Chapter 49 (4th Edition,2015), Patel Book Agency.

12 See Interstate-council, http://interstatecouncil.nic.in/Ndc.html visited on 9th March, 5:20 PM (NTM)

13See also, D.D. Basu, The Shorter Constitution of India, 367, (7th Edition 2014)
Lexis Nexis

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regions and sections of the community and through sacrifice, borne equal and build up resources
for national development.14

The National Development Council has been evolved as an administrative agency to achieve the
fullest co-operation and co-ordination in planning between the Central Government and State
government and to bring about uniformity of approach and unanimity in the working of the
National Plans. The functions of NDC include inter alia, formulation of guidelines, consideration
of the national plan formulated by the Planning Commission, considerations of issues of social
and economic policies relating to national development and review of the working of the plan
from time to time.15

Composition of NDC:

The National Development Council comprises the Prime Minister of India, the Chief Minister of
all the States and the members of the Planning Commission. The Prime Minister who is the
Chairman of the Planning Commission acts as the secretary of the Council. The Union Ministers
and State Ministers in-charge of the related subjects are also invited to participate in its
deliberations. Some concerned officers and outside experts may also be invited. The NDC
meetings are held at least twice a year, meetings are frequent when the Five year Plans are being
formulated. The Council is always kept informed about the progress of the plans.16

Committees of NDC:

The size of the NDC is quite big which reduces the utility of this body as a forum for effective
discussion. As a result, in 1954, the Council set up a smaller standing committee. In 1993, there
were six Committees of the NDC set up, following the 43rd National Development Council
meeting held in 1992-93, to go into some of the critical areas of development.

14 Ibid

15 See Anil Kumar Jana, Administering Dictrict Plans in India, 268, (4th Edition, 2004) Concept
Publishing Company, New Delhi

16 See S.A. Palekar, Development Administration, 84,(5th Edition 2012) PHI Learning Private Limited,
New Delhi

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a) Committee on austerity

b) Committee on population

c) Committee on employment

d) Committee on micro-level planning

e) Committee on literacy

f) Committee on medical education

Such committees place their reports before the NDC for final decision and recommendation.
These committees represent a marked improvement in the role-effectiveness of the National
Development Council.17

Meetings of NDC:

The agenda of a particular meeting of the NDC consists of

a) Items suggested by the Planning Commission itself

b) Items suggested by the Central Ministers

c) Items suggested by the State Governments

The meetings of the NDC start with an address from the Prime Minister. The Secretary of the
council prepares a memorandum on each item of the agenda which is circulated among the
members in advance.

17 See Ramesh.K.Arora, Rajni Goyal, Indian Public Administration : Institutions and Issues, (2005)
Wishwa Prakashan, New Delhi.

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CHAPTER 3

Role and Function of National Development Council

Tarlok Singh calls it the highest National Forum for planning which has in practice embodied
and given informal sanction to the underlying concept of partnership and co-operation between
the Centre and the States over the whole range of development, and which brings State
Governments into the organic relationship with the organization of planning at the National
Level.18

The National Development Council plays an indispensable role in the process of Indian Planning
System and Development. It provides a forum where the Union Ministers and Chief Ministers of
States discuss the plans at important stages in their preparation stage. Plans are also approved at
meetings after their completion and before they are presented to the Parliament and the State
Legislatures. The Council considers each and every point with a social point of view which
affects the nation development directly and secures the uniformity inside nation. In these ways, it
gives a lead to the Country on broad issues of policy and promotes collective thinking and joint
action on matters of national importance. The National Development Council held its first
meeting in November 1952. Meetings ordinarily last for two days. At the earlier meetings,
financial resources, patterns of development and allocations to various sectors were considered
on the basis of papers circulated by the Commission. The Draft Outline was approved at the
meeting of September 1960 and the Report of the Third Plan in May 1961. Other meetings
considered progress report on plans, agriculture problems, problems relating to community
development, land reforms, co-operative policy, etc. It may be mentioned that between 1955 and

18 Ibid

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1958 for about three years, a standing committee consisting of 9 to 12 States had been
constituted by the National Development Council. Five special committees in important subjects
were created by it, which are as follows:

1. Committee on Agriculture and Irrigation

2. Committee on Industry, Power and Transport

3. Committee on Social Services

4. Committee on Development of Hill Areas

5. Committee on Resources19

National Development Council the main objective of the fourth Five-Year Plan was a rapid
increase in the standards of living of the people through measures which also promotes equality
and social justice. It decided at the time of the Fourth Plan that Centrally Sponsored Schemes
would be limited in total value to 1/6th or 1/7th of the quantum of Central Plan assistance to the
States. The Council had also directed that these schemes should comply to one or other of the
following criteria:

(a) They should relate to demonstrations, pilot projects survey and research,

(b) They should have a regional or inter-State character,

(c) They should be such as to require lump sum provisions to be until broken down territorially,

(d) They should have an overall significance from the all-India angle.20

19See, Shodhganga Inflibet, Role and Function of NDC,

http://shodhganga.inflibnet.ac.in/bitstream/10603/3541/17/17_role%2520and%25220performance
%2520of%2520ndc.pdf&sa=U&ved=0ahUKEwj1-
p2t7nLAhUCWI4KHcv_CHwQFggPMAA&usg=AFQjCNEXTLW980locKqkSEbH7NIIbKuWg visited on
8th March, 4:00PM(NTM)

20 See also, Summary Record of Discussions of NDC Meetings Fifty Decades of Nation Building (Fifty
Meetings of NDC) Vol. III, Government of India Planning Commission.

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National Development Council had decided in its 43rd meeting to set up five committees which
are:

1. Committee on population control,

2. Committee on employment generation,

3. Committee on literacy,

4. Committee on decentalised planning

5. Committee on austerity.

6. Committee on Medical Education

At its meeting held on December 21, 2002, the National Development Council unanimously
endorsed setting up of the four Empowered Sub-Committees of the National Development
Council:

(i) Empowered Sub-Committee on Governance Reforms with special reference to E-Governance.

(ii) Empowered Sub-Committee on Removal of Barriers to Internal Trade.

(iii) Empowered Sub-Committee on creating an Investor-Friendly Climate.

(iv) Empowered Sub-Committee on Financial and Administrative Empowerment of Panchayati

Raj Institutions.21

The council took note of the Report of the National Development Council sub-committee on the
criterion for Allocation of Funds under Major Rural Poverty Alleviation Programmes and the
status of the National Development Council sub-committee on Transfer of Centrally Sponsored
Schemes.22

21 See also, Summary Record of Discussions of NDC Meetings Fifty Decades of Nation Building (Fifty
Meetings of NDC) Vol. II, Government of India Planning Commission.

22 Ibid

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CHAPTER 4

Committees say on National Development Council

The National Development Council has seen many ups and downs till now in its working
terminal. Many suggestions came up to it, to make the council more effective, some of them
proved to be vital in its functions effectiveness but few committees completely criticised its
working despite being so fruitful for the Indian planning system. The reports of the committees
contained useful recommendations for implementation, which were implemented by the Central
and the States which proved to be meaningful inputs for the formulation, implementation and
evaluation of important plan schemes and programmes. These committees represent a marked
improvement in the role-effectiveness of the National Development Council.23

The Sarkaria Commission opined that the National Development Council has not been able to act
as an effective instrument for developing consensus and commitment to the national policies.
Yet, it has been observed that National Development Council has acted as a forum for informal
consultation between the Central and State Governments on a number of critical economic
issues. However decisions concerning resource allocations between the two have been dominated
by the viewpoint of the centre and this has strained to the certain extent the Centre-State
23 See, Ramesh.K.Arora, Rajni Goyal, Indian Public Administration : Institutions and Issues, Wishwa
Prakashan, New Delhi, 2005

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Relations in the sphere of planning.24According to the Sarkaria Commission, the Council has
served its term very efficiently despite it created lots of tension politically between the center and
states. It formulated hundreds of policies and plans but what lacks behind is its constitutionality
back up. Political environment totally destroyed the working of the Council. A separate identity
of National Development Council should be maintained. However its status should be formalized
and duties reaffirmed through a presidential order passed under article 263 and it should be
renamed as the National Economic and Development Council.25

Regarding the National Development Council, the Administrative Reforms Commission

suggested that the National Development Council should be reconstituted as Prime Minister to
be the Chairman of the Council, while the secretary of the Planning Commission should act as its
secretary. The Administrative Reforms commission suggested the functions of the Council as
follows:

To prescribe guidelines for the formulation of the National Plan.

To consider the National Plan as formulated by the Planning Commission.
To access resources required for implementing the plan and to suggest ways and means
for raising them.
To consider important questions of social and economic policy affecting development.
To review the working of the Plan from time to time and to recommend such measures as
are necessary for achieving the aims and targets articulated in the national plan.26

Thus, the functional areas of the National Development Council revolve around the broad
policies for socio-economic development, formulation of the national plan, resource mobilization
and periodical appraisal of the plan-progress. Issues like food distribution, land reforms, State
trading corporation should also figure in the discussions of National Development Council.

24 See Sarkaria Commission Report, Sarkaria Commission on Centre-State Relations, Part I, 384

25 See Ministry of Home Affairs, Sarkaria Commission and its Recommendations, Notification No.
IV/11017/L/83-CSR, 1983

26 See Administrative Reforms Commission Report, 1969, Administrative Reforms Commission on

Centre-State Relations, chapter 6,

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The National Development Council should be made to function more effectively and emerge as
the highest political level Inter-governmental body for giving a direction and thrust to planned
development of the country. Being the supreme inter-governmental body for all matters related to
socioeconomic development, it is necessary that National Development Council should be
renamed and reconstituted as National Economic and Development Council (NEDC) by
Presidential Order. NEDC should formulate its own procedures to enable it to discharge its
responsibilities. The Secretary of the Planning Commission shall act as Secretary to the National
Economic and Development Council and the Planning Commission shall provide such
administrative and other assistance for the work of the Council as may be needed. A standing
Committee of the National Economic and Development Council should be constituted consisting
of the Prime Minister, Finance Minister, three other Union Ministers nominated by the Prime
Minister, Deputy Chairman of the Planning Commission and Government Reserve Bank of India
and six Chief Ministers and from each zone selected buy rotation or consensus.27

27 See Editorial, Beyond Bangalore, The Times of India, March 24, 1983.

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CHAPTER 5

Demand of Special Status Category

As the socio-economic problems are getting deeper and deeper the demand for the Special status
is also rising proportionally. Bihar, Andhra Pradesh followed by Orissa and others are raising
their voice for the special status but despite many efforts from a decade they are not able to get
fulfilled their demand. Reason stated by the ministry is official one and very formal that Bihar
and Andhra Pradesh does not fulfill the criteria set for special status by the National
Development Council. But is it really the main reason or something else, if we see the main
objective of giving this preferential treatment of state i.e. special status was for the betterment
and upliftment of the states which lacks basic needs through which a state runs and pools in the
national economy but it does not seems to be getting fulfilled with this attitude of the ministry
which decides for this preferential treatment rather than National Development Council which
seems to be a puppet in the hand of the high officials sitting over there. If we consider the main
themes which the council takes into consideration for the special status some them are; in case of
per capita income if we see from 1976 to 2012 there is no as such great deviation in it for Bihar
according in the 2011-12 yr is 23435 and in the yr 1976-77 it was 690 so its quit evident from the
numbers that there is no fruitful change. Where as if we take Andhra Pradesh then its far better
than Bihar, according to the recent data its per capita income in the 2011-12 was 71400 which
quite high in comparison to Bihar. If we talk about other criteries like Human Development
Index, People below poverty line and SC & ST numbers in the respective states are as for Bihar
its 0.447(HDI), 33.7(PBPL) and 0.91&15.72 SCs and STs respectively and for Andhra Pradesh
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same numbers are like: 0.455(HDI), 9.2 (PBPL) and 6.89&16.19 SCs and STs present. 28 All
these shows that these two states are need of preferential treatment. These data of these two
states are quite low and below in comparison to those states which are under the umbrella of the
special category. After these entire data analysis only thing can be said that behind these
demands rejection there are political vendetta is present.

When reorganization of Bihar was happened at that time, surety was given by the center that they
will provide special assistance for the loss which occurred due to this division because all the
industries, resources and elements which acts important instrument for the state went to
Jharkhand and Bihar left with nothing. Same thing happened in with Andhra Pradesh but the
surety was not given to them the time of reorganization. As this special status brings tax breaks
which helps in industrial set up and this resolves problems like electricity, poverty, employment
which directly affects the income of the state.

28See, Sources: Domestic Product of the States of India 196061 to 2006

07, EPW Research Foundation (2009) (col. 2 & 3) and Economic Survey 200607 and 201011, Mini
stry of Finance, Government of India (col. 4 to 6). India Human Development Report, Institute of Applie
d Manpower Research, 2011;
Human Development Index for Indias States, UNDP, New Delhi 2011 (col. 5);
Planning Commission, Government of India

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CHAPTER 6

CONCLUSION

I feel more and more that we must function more from below than from the top too much of
centralization means decay at the roots and ultimately a withering of branches, leaves and
flowers. -Pandit Jawaharlal Nehru

The National Development Council, most important instrument for the Indian planning system
since 1952. It has marked its presence from time to time basis by providing necessary and
indispensable suggestions and recommendations for the development of the national economy,
dealing with polices which directly or indirectly affects development of the nation. If we trace
the working of the council it is quite is evident from its working and performance the role it
played in financial and planning system. In total 53 meetings has been held till now which itself
explains the performance and efficiency of the council but there is a contention from the
government that that in the coming some time we will not be able to see any further meeting of
the council because the present government is going to abolish the council completely and there
will be other committee working on the same issues under the umbrella of NITI AYOG. Its not a
new thing when the council is on the verge of political vendetta, it happened a number of times
since it has established as an extra constitutional body.29 It does not matter which party comes in
power its working efficiency has been questioned each time despite its work is tremendous and
exceptionally good. But being an apex body for India in policy formulation from 1952 to till now

29Supra, note-9.

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and power of granting special status to special category has worked very well but it needs some
necessary and well awaited changes in its working behavior. Inspite of winding up a re-making
thing must be done for the council. Its better to have a constitutional provision backing up its
constitutional status which will make the council free from political corruption and ministry
independency which will directly affect its working and performance. An independent office or
position should be there for the council which makes it free from political vendetta. This will
only happen when the member it consists of political higher dignitaries like CMs, PM and other
important officers of government in its policy making and formulation thing are changed and
make the council an autonomous body under constitution without having members from any
political party rather appoint someone from outside for this work solely which narrow down the
probability of its getting affected by political issues and vendetta.

One of the most important things which should be reviewed the criteria of giving a preferential
treatment i.e. special category to the states. Now its based on the basic criteria like hilly areas,
forest area cover, etc. The Raghuram Rajan committee that was set up by the central government,
in its report (September 2013), identified ten least developed states on the basis of a
composite under development index designed by it. Bihar and Andhra Pradesh followed by
Odisha has been identified as the most backward state in the country. In the meantime, the
problem of faster economic and social development of the countrys backward regions
continues.30

According to the recommendations of this committee these reforms should be taken into
consideration because it will enable the states which have better physical infrastructure and
developed market and social institutions but lacks the that special preference to have faster
growth than those who lack these facilities. Further, more urbanized states where reform has
impacted on the industry and services sectors have grown faster than the states like Bihar which
are rural with a predominantly primary sector. A large percentage of scheduled tribe and
scheduled caste population with deficient human skills and other economic and social indicators
have also acted as a drag. Inclusive growth requires creation of an enabling environment in a
backward state like Bihar, in order to facilitate and promote private sector development essential

30 See, Nilmadhab Mohanty, THE SPECIAL CATEGORY STATE CONUNDRUM IN ODISHA,05,

Working Paper No: 156, 6, ISID.

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for economic growth. Creation of such an enabling environment is possible only through
the provision of physical and social infrastructure and raising adequate financial resources for
financing the infrastructure and that will be in the hand of these states when they will get
preferential treatment named as Special Category States.

To conclude if we make these important changes in the council and its working then it will come
in a new role and serve the purpose for which initially it was established rather than winding up
idea government must review these things and reinvent the council as a new living organ which
will serve the nation in its development as an apex body for planning system.

REFERENCE

Primary Source

1. List II Entry 20 of Indian Constitution i.e. Economic and Social Planning, Forty-Second
Amendment, 1976(w.e.f 3-1-1977)

Secondary Source

1. D.D. Basu, The Shorter Constitution of India, 367 (14th Edition ), Lexis Nexis
2. M.P Jain, Indian Constitution Law, (7th Edition), Lexis Nexis
3. Nilmadhab Mohanty, The Special Category State Connundrum in Odisha
4. Administrative Reforms Commission Report, 1969, Administrative Reforms Commission on
Centre-State Relations, chapter 6.

5. Ramesh.K.Arora, Rajni Goyal, Indian Public Administration : Institutions and Issues,

Wishwa Prakashan, New Delhi, 2005
6. Sarkaria Commission Report, Sarkaria Commission on Centre-State Relations, Part I, 384
7. Ramesh.K.Arora, Rajni Goyal, Indian Public Administration : Institutions and Issues, 6-425
Wishwa Prakashan, New Delhi, 2005
8. Anil Kumar Jana, Administering Disctrict Plans in India, 268, (4th Edition, 2004) Concept
Publishing Company, New Delhi.

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%25220performance%2520of

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%2520ndc.pdf&sa=U&ved=0ahUKEwj1p2t7nLAhUCWI4KHcv_CHwQFggPMAA&usg
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4. Special Category Status and Center-Finance Relations,

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