Special Package


Special Package


Special Package
The government at the center regularly announces special packages for states in the pretext of various disadvantages faced by these states
  1. Low per capita income of a state
  2. Special development needs of a state
  3. Historical disadvantages faced by the state
But, such packages undermine the principle of cooperative federalism because-
  1. Decision based on discretion and often has the hidden objective to gain political milieu in a particular state. (to J&K, to WB where election later)
  2. A huge element of discretion. Many ―special packages in the past, including to Bundelkhand, the Northeast, Odisha‘s Koraput-Bolangir-Kalahandi (KBK) region, West Bengal, Bihar and J&K, were suddenly announced to suit politics, and then additional funds were sought from Parliament through supplementary demands for grants
  3. Lack of monitoring of the proper usage of the funds amounts to poor delivery and diversion of funds.
  4. Finance Commission which has the constitutional authority takes care of the special needs of states through approval of statuary grants.
There are legitimate demands too. For instance, a special financial package for Punjab  post-insurgency. Or for a plague that can potentially debilitate the nation. But over a  period of time, demands for special packages without a strong basis have become  commonplace. Succumbing to these demands without proper assessment weakens the  resource base and results in competitive federalism of a different kind, where every state  uses this tool at a politically opportune time to extract extra money.
Thus, such packages should be properly scrutinized on an inter-state level front such as  Inter State Council based on genuine needs and principles of equality so that the  packages are not antagonistic to cooperative federalism.
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Modi has announced a whopping Rs 1.25 lakh crore special package for Bihar.
Do you think special development packages periodically announced by the union government for the states are antagonistic to the principle of cooperative federalism? Critically examine. (200 Words)