Special economic package for North Eastern states

The Centre had spent Rs 20 billion in the North Eastern region since Independence, and a special economic package of Rs 61 billion has been allocated for the overall development of the region, according to a Union home ministry document.

The document said that since the inception of the North Eastern Council in 1971, the NEC had spent Rs 3.13 billion till this March under the council's plan expenditure.

The NEC's plan size of the Ninth five-year plan (1997 to 2002) has been fixed at Rs 24.50 billion, an increase of 39 per cent over the eighth five-year plan. The region, however, witnessed various agitations, setting back the development process while the insurgency problem lessened only due to the presence of special security forces, the document added.

The Shukla commission, which had submitted its report to the prime minister in March and which is now being examined by the Planning Commission, has recommended an allocation of Rs 179.96 billion during the current plan for the seven North-Eastern states. The commission -- which was constituted under the chairmanship of Planning Commission member S P Shukla -- has made 173 recommendations for overall development of the region.

The document said the flow of funds from the Centre would further be increased as it had already decided that all Union ministries and departments would earmark at least 10 per cent of their budget for specific programmes in the North-Eastern states. They would also ensure that the programmes were implemented speedily, it added.

The criteria for distribution of normal central assistance for state plans provide for a built-in preferential treatment in favour of special category states. The criteria under the Gadgil formula, which give large weightage to population (1971 census) and the incidence of poverty was not applicable to the North-Eastern states, it added.

The document said if this criteria was to be applied strictly, the North-Eastern states would be at a disadvantage because of their small population and also because of lesser incidence of poverty in these states compared to the more populous states of Andhra Pradesh, Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. So the National Development Council has laid down the present funding method, it said.

The terms and conditions of plan assistance for the 10 special category states (which included the seven North-Eastern states, Himachal Pradesh, Jammu and Kashmir, Sikkim) are more generous than those applicable to other states. The Planning Commission allotted the plan assistance to these states as 90 per cent grant and 10 per cent loan while non-special category states get 30 per cent grant and 70 per cent loan.