No More Special


The helplessness was not just palpable, but infectious as well. Yesterday, the chief minister, Okram Ibobi, speaking at the district level Congress workers`™ conference in connection with the celebration for the 125th birth anniversary of Dr BR Ambedkar at the public ground near Aimol Tampak, Pallel again tried to reassure the audience that things will not change for the worse even though the Centre, as per the outlook of the new BJP government, has ended the special category status enjoyed by Northeastern states. According to him, the Centre cannot stop the fund flow to Manipur. We however fail to see his logic. Essentially the government exchequer is filled by tax money. As per the federal dispensation of India, certain taxes go to the Central kitty directly and certain others to the states. There is a formula by which these tax revenues are pooled in and then redistributed amongst the states and the Union governments. Generally, this is to ensure some degree of parity between the different states, and states which have big tax bases do not end up keeping all and states with small tax bases are not left with inadequate funds. States in the Northeast would by and large fall in the latter category of states with little or no tax bases of their own, therefore so far given special category status so that they get more than their entitled shares by the general redistribution formula.
It is difficult to imagine where the chief minister will bring in the money which used to come to the state as grants, after the grants have been stopped. Will he be thinking in terms of reforming the tax structure in the state too, including bargaining with the Centre for a greater share of the Central taxes raised from the state? Will he be thinking of living within means, therefore sizing down salaries, or else lobby with the Centre to allow levying taxes on Central government institutions and jobs in the state? All these options at this moment seem at best fantasies? A sudden shift in the tax regime can cause huge social turmoil, and it also cannot go outside the permissible parameters set by the Union tax schemes either. For too long these states have been taking the matter too easy, and living as if the special category status is a given condition which would not change ever.

In all likelihood, the new policy does not mean there will be a depletion of the volume of expenditure on the former special category states. It probably means many developmental and governance programmes so far in the hands of the state governments, will now be taken over by the Central government. Thus, there will be a sizing down of funds passed on to these state governments, but the spread of the fields of expenditure these governments traditionally were given the responsibility of will be reduced, so that the smaller funds in their hands now can still keep them going. As it is, in the past few decades a great number of developmental schemes in the states have already come to be in the hands of the Centre, and now in all likelihood more will be taken over by the Centre. In all these years, both in the corridors of power as well as in the intelligentsia, there have been so much talk of funds pumped into the Northeast turning black and being siphoned off into individual pockets of the local power elites. Maybe this new outlook is influenced by this long cultured and widespread perception, false or otherwise.

If this guess is true, whatever the justification, it would be pathetic to see these state governments reduced to mere caricatures, left to take care of nothing more than disbursement of government employees`™ salaries. Let the local BJP not be happy about this either. If the structure of the tax redistribution is changed in the manner, they too would be in the same soup if they do ever come to power. In fact, public resentment may well turn against them for it is their government at the Centre which will be putting these state governments in this humiliating situation. In the meanwhile, whether the Centre relents and allows the special category status of these states to continue or not, these states and their people must learn the lesson and prepare to earn their own money, and also to live within their means. Official corruption must end too. Let them realise, even if does not end today, the special category status cannot be forever. Some day or the other, other states will protest their taxes are subsidising none earning states.

Leader Writer: Pradip Phanjoubam


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