No special category status for Odisha, says Sitharaman

Union Finance Minister Nirmala Sitharaman on Friday made it clear that there is no proposal to accord Special Category Status to Odisha as demanded by the ruling Biju Janata Dal (BJD).

She told a press conference that the Finance Commission has made a recommendation to the Centre saying that no state will be accorded the special status.

Sitharaman was on a visit to Odisha to attend post Budget discussions. She also interacted with industries, traders, charted accountants and other stakeholders.

The special category status was introduced in 1969 to benefit certain backward states having hilly terrains, strategic international borders and economic and infrastructural backwardness.

However, Telangana, the newest state of India, is accorded the status as it was carved out of another state - Andhra Pradesh, Sitharaman said.

Sitharaman’s categorical statement that Odisha will not get the special category status is politically significant as the ruling BJD headed by Chief Minister Naveen Patnaik has been demanding it citing instances of being the most vulnerable state to natural calamities like cyclones.

The state government also cited that since Odisha’s population comprises above 22 per cent of people belonging to tribals and has a vast backward area, it required special attention.

Eleven states - Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand and Telangana - have been accorded the special category state status as they share borders with other countries, Odisha lacked that criterion.

Referring to Patnaik’s concern over the reduction of budgetary allocation under MGNREGA, the union finance minister said that the provision for the scheme has not been reduced in the budget.

“It is a demand-driven programme and the provision may go up as and when the demand grows. The government also wants to ensure that the fund is well spent,” she said.

On BJD’s agitation over the reduction of allocation for procurement, Sitharaman said: “We have not at all brought down procurement of paddy or wheat. The quantum of procurement has gone up in the last eight years and due to high MSP, the total amount given to the farmers is also high.”

To a question on the expansion of the GST compensation regime, Sitharaman said it has already been extended till 2026.

“And it is extended to pay the loans which were incurred during the pandemic time. Pandemic time loan was taken to pay the states, some amount of the total compensation to be paid. We have to pay the amount borrowed and interest. It is a decision of the Council and not the government,” she said.

Sitharaman said that the PM Vishwakarma Kaushal Samman (PM-VIKAS) Yojana announced in the Union Budget 2023 will greatly benefit the artisans of Odisha.

“All the artisans from Odisha will be greatly benefitted from that scheme. The artisans engaged in paintings, stone sculpture and weaving will be benefitted,” she said.