SPECIAL PACKAGES

What Are Special Packages?

• Definition: Financial assistance or targeted benefits provided by the central government to states facing geographical, socio-economic, or political challenges. These are discretionary grants under Article 282 of the Constitution.
• Purpose: Address regional disparities, boost infrastructure, and support development in marginalized states.
• Key Features:
  • Need-based: Not a statutory right but granted at the Centre’s discretion.
  • Beyond Finance Commission Allocations: Separate from mandatory devolutions recommended by the Finance Commission.
  • Flexibility: Funds can be used for projects outside the state’s legislative jurisdiction (e.g., national highways, railways).

Constitutional Basis

1. Article 282 (Discretionary Grants):
   • Allows the Centre and states to make grants for any public purpose, even if it falls outside their legislative domains.
   • Forms the legal basis for special packages.
2. Articles 371A to 371J:
   • Provide special provisions for specific states (e.g., Nagaland, Maharashtra, Gujarat, Andhra Pradesh) to address historical, cultural, or socio-economic needs.
   • Example: Article 371D ensures equitable opportunities in public employment and education for Andhra Pradesh post-bifurcation (2014).

Special Packages in Union Budget 2024-25

1. Bihar

• Context: Bihar has long demanded Special Category Status (SCS) due to its socio-economic backwardness (low per capita income, weak infrastructure).
• Key Allocations (2024-25):
  • Infrastructure: Funds for roads, bridges, and irrigation projects.
  • Education & Healthcare: Upgrading primary health centers and schools.
  • Agriculture: Support for drought-resistant crops and cold storage chains.
• Historical Precedent: In 2015, Bihar received a ₹1.25 lakh crore package for highways, energy, and tourism.

2. Andhra Pradesh

• Context: Promised Special Category Status during bifurcation (2014) but granted a special package instead.
• Key Allocations (2024-25):
  • Capital Development: Funds for Amaravati infrastructure and Visakhapatnam-Chennai industrial corridor.
  • Port Modernization: Upgrading Krishnapatnam and Kakinada ports.
  • Renewable Energy: Solar parks and green hydrogen projects.
• Historical Precedent: 2016 package included ₹2.2 lakh crore for Polavaram Dam, roads, and revenue deficit compensation.

Criticisms & Challenges

1. Political Motivations:
   • Allegations of favoritism toward states aligned with the ruling party.
   • Example: Andhra Pradesh’s package revived ahead of elections.
2. Implementation Delays:
   • Past packages (e.g., Bihar’s 2015 allocation) faced slow execution due to bureaucratic hurdles.
3. Lack of Transparency:
   • No standardized criteria for granting packages, leading to arbitrariness.
4. Inadequate Compensation:
   • Andhra Pradesh claims the 2016 package fell short of promised SCS benefits.

Comparison with Other States

• Kerala & Punjab: Demand similar packages for flood rehabilitation and agrarian crises.
• Northeastern States: Receive funds under Article 371 but also benefit from centrally sponsored schemes.

Judicial & Institutional Oversight

• Supreme Court: Has emphasized that grants under Article 282 must align with public purpose (e.g., Centre for PIL v. Union of India, 2011).
• CAG Audits: Highlighted underutilization of funds in Bihar and Andhra Pradesh.

Way Forward

1. Legal Framework: Enact laws to standardize criteria for special packages.
2. Accountability: Link funds to measurable outcomes (e.g., SDG indicators).
3. Decentralization: Involve local governments in planning and execution.
4. SCS Revisit: Reconsider granting Special Category Status to Bihar and Andhra Pradesh for tax breaks and higher central funding.

Conclusion

Special packages remain a critical tool for addressing regional inequality but require reforms to ensure transparency and effectiveness. While Bihar and Andhra Pradesh’s 2024-25 allocations signal targeted support, long-term solutions demand institutionalizing criteria, depoliticizing grants, and prioritizing participatory development.