Rajya Sabha panel recommends special category status for Odisha

The Rajya Sabha standing committee on commerce has recommended providing special category status to Odisha and two other states in its demands of grant reports for 2012-13, tabled on April 30 this year, for the Department of Industrial Policy and Promotion (DIPP) under the Union commerce ministry.

Having a special category status entitles a state to get special financial package from Centre for upliftment of several sectors including industries. The package included extending financial assistance towards central capital investment subsidy, central interest subsidy and central comprehensive insurance scheme etc.

Currently this status is enjoyed by Jammu and Kashmir, Himachal Pradesh , Uttarakhand and north eastern states as they are filled with hilly areas, contain sizeable tribal population, share their border with foreign countries and have very low industrial activities.

 

“The committee desires that the department take every step to popularise the scheme (The centrally sponsored scheme involving implementation of various components of industrial incentive package) in every special category states so as to create a robust industrial atmosphere in these states. The committee recommends extending the special category status to states like Bihar, Odisha, Jharkhand so that these industrially backward states may also avail the benefit of this and other similar scheme run by the government,” the panel headed by MP Shanta Kumar said.

For several years, Odisha, and Bihar have been demanding for special category status which has been outrightly rejected by the Central government on the ground of not fulfilling one or more criteria such as having an international border.

Planning Commission deputy chairman Montek Singh Alhuwalia rejected Odisha's plea to grant such status in January this year saying, since the state is growing at a faster rate compared to the national average it does not need any special package. Similarly, an inter-ministerial panel last week rejected Bihar’s demand to get listed among the special category states, a status currently enjoyed by only 10 of the 28 states of the country.

Despite lack of support from the central government, rapid industrialization in Odisha, particularly in the field of mineral processing, has put the state on a high growth trajectory. The state, otherwise known for high incidence of poverty, has outpaced national growth rate in the first three years of the 11th Five Year Plan (2007-12).

According to the Economic Survey of Odisha for 2010-11, the state has registered an average real annual growth rate of 9.57 per cent compared to national average of 7.79 per cent during this period.