Address by Shri Ajit Jogi, Chief Minister, Chhattisgarh
49th N.D.C. Meeting, 1^st September 2001, Vigyan Bhavan, New Delhi.

Hon'ble Prime Minister, Hon'ble Deputy Chairperson of the Planning Commission, Hon'ble Chief Ministers and Ministers from the States, Ladies and Gentlemen;

The last meeting of the National Development Council was held more than two and a half years ago - and since then, we have three new members of the Council, including Chhattisgarh. It is a welcome coincidence that the new States would be charting their planned growth at about the same time that the Tenth Five Year Plan of the country would be unveiled. Here is an opportunity to raise the new States-which share similar conditions of backwardness - to a minimum acceptable socio-economic level so that they could contribute even more effectively to national growth in the subsequent Plans. And, there is little doubt that the people of all the three have the same yearning for development and the strength of determination to do so, as the rest of our countrymen. It is in this background that I must mention some disappointment in not finding any special or conscious approach to the development of a new State such as Chhattisgarh in the Draft Approach Paper.

2. Mr. Prime Minister, Sir, the Draft Approach Paper circulated to us, like the earlier ones, reiterates our commitment to growth with equity and sustainability. You would recall Sir, we always had targets in the reduction of poverty, primary level schooling, safe drinking water and other minimum needs, and so on.

Yes, perhaps those were not called 'monitorable targets', and nor was human development indices in vogue then. But, targets did exist. The only refreshing approach with the present one seems to be the targeted growth rate of 8%. This again, although appearing to be highly ambitious, is attainable provided several conditionalities are attended to - the least of which is the transfer of adequate resources to the States along with degrees of freedom and flexibility at the appropriate levels, required to carry on with the task. The concept of 'core¹ Plan at State level, it is presumed will help towards this. However, I also observe that while the present document seeks to raise a few relevant issues, and, makes many currently fashionable statements, it also seems to concentrate more on several sweeping generalisations. I could not help a feeling that the document also sounds somewhat naive when dealing with issues of administrative reforms especially in the context of the delicate and sensitive Central-State equations.

3. Having said that, let me turn to some of the general issues first. Achievement of a high growth rate combined with equity and sustainability has to be backed by adequate resources. If a State's Plan- targets are ultimately to be dovetailed to its resources; with the present pattern of devolution of funds from the Centre, the new States would take several decades to be anywhere near the targeted growth rates and to attain the higher level of human' development envisaged. It goes with out stating that the principle of equity will be served only if higher allocation of resources are made to the more backward States, even as there ought to be incentives for sectoral performance for those who succeed in shaking off the cult of 'backwardness'.

4. The State specific targets should be based on an assessment of the State's potential in terms of, not only its own socio-economic development but also, its capacity to contribute to national growth. In other words, the development targets of a State should have a direct nexus with its development potential, which is realisable during the next five to ten years. Resources must be provided to unlock a State's potential for growth.

5. The concept of efficiency enhancing policies in various sectors of the economy, if seen in conjunction with State-specific development targets would yield the same results. I would suggest that we identify individual States or regions which have the optimum potential for growth in a particular sector and provide the State or region with necessary policy frame and resources' backing so that substantial growth is achieved in that sector in a short period of time. The State-specific targets should therefore flow from the core competence of each State, supported by additional allocation of resources. Please recall that the 'green revolution' for food self-sufficiency was achieved through such a strategy.

6. Take our own case - Chhattisgarh is a State with low density of population and approximately 44% of its geographical area under forests. It thus already has more forests than the targets set in the Approach Paper for the year 2012. Endowed with enormous mineral resources it also has perhaps one of the largest reserves of diamonds. It also has rich land and water resources. Utilisation of all these resources would make substantial contribution to the growth of the region and the nation; therefore, the State specific targets for development in the case of Chhattisgarh should relate to the utilisation of these resources - which merits additional allocations. The same ought to be true for the other regions in respect of their individual strengths.

7. The Prime Minister would recall that I had advocated a similar approach at the Power Ministers' conference and had suggested that Chhattisgarh along with a few other States had the potential to be the power hubs to meet the nation's demand, and save on avoidable transportation and other handling costs. I am happy to inform you that the response from some of the States to our invitation to set up power generating units in Chhattisgarh has been very encouraging. A strategy should now be devised to implement this suggestion in the best interests of the national economy. I would suggest that such a strategy should form part of the Tenth Plan, and a Task Force comprising the Ministries of Finance, Power and the State Governments should work out the modalities.

8. Similarly, the State has great potential for development of agriculture. I note that agriculture development has been included as a core element of the Tenth Plan and that the strategy would focus on the mono-crop areas, rain fed areas and also the small and marginal farmers. Although a major paddy area, with almost 82% of the net sown area under paddy, Chhattisgarh continues to be primarily mono-cropped; with a productivity which is approximately half of the national average. This is mainly due to lack of irrigation that presently covers less than one-fifth of the area under cultivation. The State has potential water resources to irrigate three-fourths of its cultivable area with an estimated investment of approximately Rs.25,000 crores. State-specific growth target approach should take this potential into consideration for special allocation of resources to achieve the optimum level of irrigation.

9. The approach paper concedes what is common knowledge regarding the Externally Aided Projects (EAR) which supplement our scarce resources for development, particularly in the social sectors. Almost four-fifths of the funds under EAP are flowing into a few States and corrective measures will be required to remove the distributional inequity. Mere assistance in preparation of projects for funding under EAP would not be adequate. I would suggest that when the State Plan targets are fixed, a study should be made to identify the areas where external assistance could flow. Such a study by the Planning Commission and the Central Government will help needy States like Chhattisgarh to mobilise extra budgetary resources for overall development.

10. The growth rate of 8% is indeed attainable, but the means to attain such a high growth rate may have to be carefully considered. I agree that a substantial part of the additional growth has to come from increased efficiency of existing assets and investment, but I think we are conceding too easily that the order of domestic savings required for growth rate of this size may not be feasible. Unfortunately, this is further reinforced by the recent developments in the financial sector of our economy. Little purpose is served in repeating that the investors', particularly the small investors', confidence has been shattered by certain recent events. The image of the financial sector must be enhanced if any improvement in the level of saving is to be achieved. Unless this is done, the ambitious target of a 8% growth rate will remain just yet another unattainable goal.

11. Mr. Prime Minister, I would like to inform you that Chhattisgarh has adopted sound fiscal practices from the very beginning. The fiscal deficit has been kept at less than 1% of our Net State Domestic Product; establishment expenditure has been kept low. We are making all efforts to contain the non-plan salary bill at 40% of the total expenditure of the State which is a commitment that we have given to our Legislature; sincere economy measures have been adopted, and every effort is being made to raise additional revenues. The special problems of the State, indeed of all the three new States, however, must be addressed in the Tenth Plan. Chhattisgarh is one of the poorest States in terms of per capita income and has, as you are aware, a large tribal population. In addition to the special problems of the State there is the need for a new Capital City and administrative infrastructure. Chhattisgarh would need special funds to build its new capital. In the past, all newly created States were provided with generous grants- in- aid for building Capital cities. A poor State like Chhattisgarh should not be denied this dispensation.

12. On the subject of additional resources for the Tenth Plan, may I remind the Prime Minister that Chhattisgarh is being deprived of a major source of its revenues. The rates of royalty on coal were revised last in October 1994. As per the provision of the relevant statute, royalty rates are to be revised every three years. Thus, revision was due in the year 1997 and again in 2000. The price of coal has increased by more than 108%, since 1994. The royalty rates should have similarly been doubled in the least. Royalty on coal constitutes about 80% of the total mining revenue of the State. Non-revision of royalty, therefore, is a major set back to the resource position of the State. This situation is unacceptable to a new State and must be remedied before the Tenth Plan commences. Time and again we have demanded that rate of royalty of coal should be ad valorem so that it is automatically raised with coal prices. The issue has been deferred for far too long and must be addressed urgently.

13. Mr. Prime Minister, I would like to bring to your notice a major issue relating to reorganisation of States; and this has a bearing on any new State's resources. The criterion of population is being used indiscriminately for division of assets and liabilities to the detriment of newly created States. For example, the Calamity Relief Fund and certain grants awarded by the Eleventh Finance Commission have been apportioned on the basis of population. The size of the Calamity Relief Fund of each State was, to begin with, not determined on the basis of population. The criteria on the basis of which the size of the Fund was determined, should now be applied in the matter of division of the Fund for the new States. This is important for a State that has recurring droughts, and occasionally devastating floods, as witnessed this year. Similarly, the various up-gradation grants recommended by the EFC were not on the based on population. The grants provided to undivided States are now being erroneously apportioned on the basis of population. We would like this issue to be considered and resolved urgently. I would now turn to some of the sectoral policy issues.

14. Agriculture: No one doubts the need for Agricultural development to be at the very core of a national Plan, indeed one would be surprised if that were not to be so. Agriculture policies should focus not only on crop intensity but also on diversification of agriculture. Horticulture is an area that has received little attention in the Approach Paper while dealing with the agriculture sector. States with promising potential for horticulture should be encouraged through suitable policy initiatives backed by adequate resources. Chhattisgarh is one such State, which while making efforts for improvement in paddy yields, is diversifying its agriculture with emphasis on pulses, oil seeds and horticulture. We want to take up major projects in horticulture, and some proposals have already been submitted to the Government of India, I would suggest that such projects should form part of the Tenth Plan.

15. Recurring droughts sap the vitality of the agriculture sector in the State. Diversification and intensification of agriculture would not be possible without substantially increasing our irrigation capacity from the present 17-18%. This will require a composite scheme of tapping both surface and ground water and will involve large investments. While AIBP may continue to be one of the main instruments for providing resources, there should be more flexibility in the Programme for irrigation projects. The Programme should include funding of selected medium projects and clusters of small projects.

16. I would like to mention in this connection that the present Central schemes do not serve the specific agricultural development needs of States. There has to be a switchover from schemes with universal application to State-focussed schemes after careful assessment of needs. I would like to repeat that a plethora of schemes which every State can avail, is not of much value in this sector as perhaps in most others.

17. Forests: Fortunately Chhattisgarh already has more forest cover than the target proposed to be attained by 2012 (33%). Our forests are known for their rich biodiversity. The State needs large resources to preserve and protect them. It should be noted that by preserving such a large forest area the State provides the nation with green lungs, and helps the rest of the nation achieve a major national and social objective of preserving and protecting its ecology. The Tenth Plan must make provisions for special plan assistance in protection and preservation of forests to Chhattisgarh and the other States which have a higher than national average of forest cover.

18. We have recently introduced a scheme - Indira Hareli Saheli - under which marginal farmers and persons below poverty line are assigned plots of marginal and waste land to grow trees with the incentive that they will have the right to the usufruct. This is on the lines of the suggested approach in the Draft Paper for the development of farm forestry on marginal lands. The response to the scheme has been very encouraging. We want to cover 12 lakh hectares of waste (bhata) land and other land classified as 'Chhote jhad bade/ jhad ka jangal', which are devoid of any vegetation. In the first phase 3.5 lakh hectares have been selected for plantation under the scheme. On completion of this ambitious scheme, we would have brought 10% more area of the State under tree cover. This is a major State initiative that deserves Central support. I would suggest that the Food for Work programme is fully integrated with such a Scheme. In fact, social and farm forestry on marginal lands should be accepted as one of the main programmes under Food for Work and the present norms of Food for Work regarding the cash component should be made more flexible for such programmes.

19. As I mentioned a short while ago, forests of Chhattisgarh are rich in bio-diversity and have a large variety of medicinal plants. The commercial potential of medicinal plants and herbs has not been fully realised in our State. We intend taking up several projects in the forest villages for the commercial exploitation of this potential. Such projects would utilise the traditional knowledge dormant in local communities, particularly the tribal communities, familiar with such plants and herbs. I feel that this could be a major programme for tribal development; and would make Chhattisgarh a Van-Aushadhi State' of the country. I suggest that this potential should be recognised and programmes included in the Tenth Plan.

20. Health: Improvement of the health status of our people, particularly the tribal and other vulnerable sections of the population, is a major area of concern for the State. People in remote tribal areas of the State continue to die of diseases like Malaria and gastro-entritis - such deaths are preventable and with out getting in to the debate over statistics; even one such death should be a matter of shame for everyone of us. Health care in tribal areas is a major challenge that must be met. A major programme converging health, sanitation and nutrition is required for this. It should also be dovetailed with the programmes for rural infrastructure such as that for roads and water supplies. I recommend that the Tenth Plan should include such a programme focussed on tribal areas with adequate funds for requisite health infrastructure. Our tribal and other rural areas continue to be without qualified doctors. Efforts and incentives have not convinced or persuaded doctors to serve in these areas where untold miseries caused by minor ailments continue to afflict the poor. It is our considered opinion that the Centre must seriously consider and amend the Medical Council of India Act to introduce shorter term three year medical degree courses for training doctors who will be readily available in such areas for serving as the first line of attention to public health requirements.

21. I have mentioned elsewhere about the prevalence of large varieties of medicinal plants and herbs in the forests of Chhattisgarh. Based on these there is a system of medicine among the tribal people which has not so far been explored. This system of medicine should be documented and some centres for health care, based on tribal medicines, set up in the State. Going by empirical evidence, it will perhaps be foolhardy to reject tribal medicines outright as a local unscientific system. This system should be examined, documented and made part of the Indian system of medicine.

22. Education: Education is one of the important aspects of State's development strategy. Along with DPEP we have taken a major initiative in the form of a special time-bound enrolment drive "Padbho Padhabo School Jabo" in July this year. As a result of the drive, percentage enrolment in primary sector has leapt to more than 95, and concerted efforts are being made to sustain this achievement. In order to ensure the participation of local community in the management of Primary and Middle Schools, VECs (Village Education Committee) and SMCs (School Management Committee) have been constituted in "all the villages. In order to enable the students of this backward State to compete at the national level, English has been introduced as a compulsory subject right from Class I in school. If the one teacher for 40 students norm proposed to be adopted for the Tenth Plan is followed, we will require more than 20,000 additional teachers. This norm will be difficult to follow without additional assistance under the Plan.

23. An ambitious project to improve the quality of education by the name of Indira Suchana Shakti has been started in the State with the objective of providing free information technology education to all poor girl students (classes 9 to 12). Presently, more than 20,000 students are being benefited by this scheme and it is hoped that this figure will reach 90,000 in the coming years. Such a scheme should find place in the Plan. As part of our literacy campaign, 9th and 11th class students have been given the incentive of bonus marks in their annual school examinations for making illiterate persons literate. The scheme called Gyan Vikas Abhiyaan.has been well received, and only underscores the point that several social sector interventions are possible through managerial innovation rather than solely through financial resources. The Approach to the Tenth Plan should encourage innovative initiatives made by the State Governments.

24. Tribal Development: As has already been mentioned, Chhattisgarh has a very large tribal population, It is in these districts inhabited by tribal communities in the southern part of the State bordering Andhra Pradesh and Maharshtra and the north-eastern part bordering Jharkhand, that the problem of extremist violence such as Naxalism has grown alarmingly over the years. This is a highly sensitive problem as our tribal youth are getting exposed to the extreme leftist secessionist ideology which have dangerous portents for the unity, integrity and security of the nation. This problem has to be addressed with utmost seriousness and urgency. The State Government has submitted a comprehensive project to deal with the socio-economic aspects of the problem, with an outlay of Rs.532 crore. While reiterating our request for the early sanction of this package, may I also suggest that the Tenth Plan should provide for similar integrated packages for sensitive areas which address problems in a multi-dimensional frame.

25. Tribal development plans should be based on an area approach and the objective should be to bring them to the mainstream of society without injuring their rich and varied heritage. Rapid socio-economic development and suitable local employment to the educated youth should be our main objective. Such programmes will have to focus on agriculture development and agro-processing, processing of minor forest produce, other rural industries and handicrafts. The tribal areas need to be opened up and road connectivity should be substantially increased as early as possible. Comprehensive area-based plans will be the best answer to tribal development needs in Chhattisgarh.

26. Poverty alleviation programmes: Major poverty alleviation programmes should be linked with the Food for Work programme in a poor State where food security is all the more critical. Our recent experience in management of a serious drought situation has led us to this conclusion. The State was allocated 2 lakh tonnes of rice and nearly 3 lakh tonnes of paddy last year. All drought relief works and works under EAS were taken up under the Food for Work programme. Chhattisgarh is one of the few States to have fully utilised the allocation of food grains. Food grains by way of wages would be the best way to provide food security in areas of distress. Since we have large quantities of surplus food grains, the Food for Work programme should be further expanded to cover all rural works under the Central and State Plans. Elsewhere, I have already suggested the use of food grains for generating employment along with increasing the green cover over wastelands.

27. Roads : The Pradhan Mantri Gramin Sadak Yojana will no doubt help in substantially improving the rural road connectivity. However, we would urge the Central Govt. to relax the priorities for taking up roads under the scheme, the need for which has been underlined by oft-repeated outbreaks of epidemics in remote tribal areas. Timely intervention could prevent common diseases from assuming epidemic proportions. Poor road communications in inaccessible rural areas often compound the misery for the population in such pockets. The priorities should be made more flexible to enable connecting unconnected villages that are at a considerable distance from any paved road, irrespective of the size of population. It must be recognised that in a State a low density of population, there is a need for some flexibility in the population norms under the rural roads' programme.

28. While on the subject of roads, we would also like to bring to the Prime Minister's notice that Chhattisgarh is perhaps one of the very few States not covered by National Highway Development Project. It remains outside the Golden Quadrilateral and also the axes corridors for north-south and east-west. This will deprive the State of access to this nationally vital infrastructure project and the benefits accruing to the economy from it. The Tenth Plan ought to include access for all similarly placed States under this project. For example, Chhattisgarh should have access to both the Quadrilateral as well as the Axes roads by linking it with Bhubaneshwar, Varanasi, Vishakhapatnam and Nagpur with roads of the same standard as the proposed national network.

29. As I mentioned earlier, there can be no quarrel with the major objectives of the Plan because they are no different from those of the earlier Plans, However, we have reservations on the manner of approaching the objectives that have been proposed by the Draft Paper. For instance, the Paper merely talks about 'reduction of Centrally Sponsored Schemes (CSS ) through transfer to States, convergence and weeding out', we strongly feel that such an exercise would be merely cosmetic. Instead, it should be realised that the concept of sponsorship undermines the autonomy of States and puts the Central Government in a patronising position rather than that of a partner in the development endeavour. We therefore advocate that all schemes of development should be conceived, designed and must originate at the level of the State Governments, and the role of the Central Government should be limited to financially supporting such initiatives which meet mutually agreed parameters. Therefore, Centrally Sponsored Schemes ought really to be Centrally Supported Schemes or State Initiated Schemes. The past experience regarding the CSS does not in any way suggest that there can be any guarantee against the spawning of new Centrally Sponsored Schemes that may replace the ones weeded out or converged. After all the very reason that a plethora of Schemes mushroomed in the first place, is to 'utilise' the administrative machinery already created and available with the Central Government. Therefore, any exercise for weeding out or converging Centrally Sponsored Schemes must also ensure that there is a corresponding downsizing of the Central Government itself.

30. Once the responsibility for conceiving and designing schemes and projects vests in the State Governments, and the role of the Central Government is one of setting broad guidelines for seeking its financial assistance for such schemes, there should be neither any role conflict nor an overlap between the two. The entire range of activities from sanctioning of the Schemes to their monitoring should ordinarily rest with the States, and the Centre should step in only to guide the States regarding the best practices, enriching the analytical rigour for evaluation and so on. Also, the transfer of these schemes must be accompanied by devolution of adequate resources for them. This has not unfortunately been the experience in the past. Unless there is matching devolution of resources to the States, with adequate provision for growth and inflation in future, it would not be possible for the States to carry on these schemes.

31. There can be no standard prescription for making support to States contingent on agreed programme of reforms. Different States are at different stages of development and require varying degrees of reforms at present. While there are no differences as regards the need for reforms, any attempt to make a standardised model would only lead to unwarranted complications. Giving preference to the completion of existing projects than to new projects is a reasonable premise, this should not, however, be at the cost of the aspirations of backward regions where new projects alone can bring hopes of development.

32. Among the other issues listed in the minimum agenda suggested in the Draft Approach Paper, the inclusion of critical repairs and maintenance as permissible Plan activities should help States such as ours. Absence of new projects for the last several years has meant that existing assets require badly needed investment to make them more productive and useful. You would recall that in the recently convened Conference on Cooperative Credit and Rural Infrastructure Fund, I had made the same plea.

33. We are committed to the decentralization of power to the Panchayat Raj Institutions and the Gram Sabhas. We are also committed to protect PRIs from the transgression by other institutional structures. While doing so, we are also aware of the need for strengthening of PRIs and other local bodies, both from the point of view of finances as well as the institutional capacity to perform the functions that are in their domain. The Tenth Plan should encourage States to undertake such an exercise.

34. The economic rationale for releasing unproductive and locked up public investments and their allocation to more productive sectors is too well known to need any elaboration. Privatisation as one of the options towards this end is also an accepted strategy. The problem really is that of degree of transparency in the processes, in the sequencing and in the priorities. Some recent experiences have indicated that there is no national consensus on the issue and the attempts to bypass the States have only worsened the process. You would admit that the creation of the Disinvestment Commission followed by its demise and then rebirth in some new incarnation, are all issues that have not really inspired the nation in as sensitive an issue as privatisation of public assets built over five decades and more of nation building. Similarly, the process of reducing subsidies has to be treaded with great caution and since the States have to handle the fall out of any withdrawal or reduction of subsidies vis a vis the beneficiary groups, I would suggest that there should be a time frame for the exercise as applicable to each Sector in consultation with the States most affected.

35. We endorse all such suggestions that provide for consultation and setting of mutually agreed targets to be achieved with in some agreed time periods. We are opposed to any imposing of targets or time periods on the States. We are also opposed to any uniform treatment of States at varying levels of development and economic strengths. I also have a word of caution with regard to the issues concerning the various legal reforms and in particular those regarding the labour laws. Good public policy formulation implies consultation in the widest possible manner with all the various stakeholders. Any impression that reforms are being pursued under duress from external sources, or that there is an eagerness to lean towards only one set of stakeholders in preference to the others, or that of a tearing hurry to beat a deadline only raises resistance and doubts about the sincerity of policy makers. This is true of Governments both in States as well as the Centre. Any exhibition of exasperation, and impatience is understandable from those with little experience of public affairs behind them. The institutions of Governance however have to strike that balance between pure economics and politics.

36. I think the suggested model blue-print for administrative reforms is a highly objectionable interference in the States' domain. Mr. Prime Minister, Sir, we have a very delicate balance of administrative controls at the level of the State and the Centre. The States are responsible enough to weigh the benefits of continuity of functionaries in various positions. The State Government is the best judge of the suitability of functionaries in different positions. The States after all have been grooming functionaries in the various sectors and these very functionaries take up senior level assignments at the Centre in many instances. We have built a delicate balance, as I said before, due to the maturity and restraint exercised by the State Governments on the one hand and the Central Government on the other. Let us not experiment with model blue prints which can only disturb the existing systems. I hope the suggestion in the Draft Approach Paper is perhaps only a passing suggestion, and no more. Chhattisgarh would oppose any attempt to interfere with the States' discretion with regard to deployment of its functionaries, and would resist any attempt to link assistance under the Plans with any such transgression. This is why I called such suggestions naive at the beginning of my address, I shall now speak a few words about the Criteria for allocation of funds.

37. Criteria for allocation of funds under major rural poverty alleviation programme: Mr. Prime Minister, Sir, for a poor State like Chhattisgarh it is difficult to agree with the NDC sub-committee's recommendation in favour of continuation of the presently used criterion based on adjusted shares for allocation of funds to States for major rural poverty alleviation programmes. It was emphasized by many States at the last meeting of the NDC, that the interests of backward States should not be adversely affected by a change in -a methodology which is based on data that are not very reliable. Chhattisgarh has an estimated 35% of the population below poverty line. Add to this, that the State has a large tribal population constituting one-third of the total. Mere marginal adjustments over the Expert Group recommendation actually puts States such as ours at a disadvantage and due to the special problems like recurring droughts and distressed migration of people in search of jobs, we will be very badly hit by such a sharing criteria. We would therefore, urge that at least for the new States, the share on the basis of Task Force methodology should be retained.

38. Moreover, the poverty levels of the new States need to be assessed afresh. Since State-specific estimation of poverty on the basis of quinquennial consumer expenditure data of NSS has been accepted with a view to ensure that State-specific variations in consumption patterns and prices are taken into account, there has to be a fresh estimation of incidence of poverty in Chhattisgarh. Evolution of appropriate criteria for the Tenth Plan is likely to take time. We would request that till the criteria are decided upon and allocation finalised on the basis of estimates of poverty in Chhattisgarh, the State's share in allocation of funds under major rural poverty alleviation programmes should continue to be on the basis of the recommendation of the Task Force. Let me conclude by addressing the issue of Special Category States.

39. We welcome the grant of Special Category State Status to Uttaranchal The new State deserves it. However, I would like to urge that the other two new States, Chhattisgarh and Jharkhand, deserve no less. I had raised this issue with the Hon'ble Prime Minister almost immediately after the State came into being. We have submitted our case to the Planning Commission.

40. Chhattisgarh has almost all the features on the basis of which the grant of special status is considered. Let me enumerate some of these : (i) Hilly and difficult terrain: The State is hilly, if not as hilly as Uttaranchal, and has large areas which are inaccessible. There are less hilly States which enjoy special category status. (ii) Low population density and tribal population: The density of population of the State is one of the lowest in the country, at 154 per sq. km, it is lower than Uttaranchal. As much as 44% of the land area of the State is under forest cover and the tribal population is as large as 32.4% (1991 census).(iii) Economic and infrastructural backwardness: Chhattisgarh is economically one of the most backward States in the country with a per capita income as low as Rs. 7072, as against the national average of Rs. 9739, at constant prices. The State has a large population below the poverty line, estimated nearly 35%. Agriculture is rain-fed and totally dependent on paddy (81%) with poor productivity. The net irrigation percentage is 17.5; the net area under irrigation is even less, and most of it is merely protective and supportive irrigation. Infrastructure-wise the State is backward. Chhattisgarh is served poorly by road network; surfaced road length is only 21.37 Km, as compared to the national average of 75 Km per 100 sq. km. of area. The State is also not served well by railways. The per capita energy consumption is 300 units which is one of the lowest in the country. The unit cost of delivery of services is very high because of the sparseness of the population. This is borne also by the fact that there are a total of 55, 475 habitations populated by the 2.07 crore population (iv) Nonviable nature of State finance: The State has a revenue deficit of Rs. 350 crore in the current year. The financial liabilities of the undivided State are yet to be apportioned. Major non-Plan liabilities, like pensions have also not so far been apportioned. Public debts and guarantee liabilities have not been divided so far. Due to reasons of location and proximity, the State would not inherit any of the major assets of the undivided State. The new State has to set up its Capital, its Vidhan Sabha, High Court and State Secretariat, and the necessary administrative infrastructure. Creation of even a part of such assets will entail large expenditure. At this stage therefore, it would be premature to conclude about the financial status of the State. Taking all these factors into account the financial position of the State can not but be unviable.

41. The State is strategically located even if not on the international borders. The serious problem of extremist violence in the State can only be ignored to our peril. These extremist groups propagate dangerous secessionist ideology under the forest cover of six of our districts which are largely tribal, and poor in terms of income and infrastructure. In the interest of the unity and integrity of the nation, these areas need large investments in terms of improvement in road communication and other infrastructure, as also socio- economic development. Projects have been prepared in the past to address the problems of these areas, but could never take off because of the paucity of resources. We must therefore make the investments required to address the basic reasons for frustration and disillusionment in these strategically sensitive areas.

42. The over all position of the State should also be viewed in the context of other special problems it has to grapple with. The State has faced recurring drought situations of considerable severity almost every year. Last year 12 of its 16 districts were drought-affected. This necessitated opening of large number of relief works for wage employment. From the month of Feb. 2001 to June 2001, wage employment was provided to as many as 10 lakh people per day. Since April the figure had gone up to 12 lakhs. Coupled with recurring droughts, is the demeaning problem of distress migration of our people in search of work to other States during non-agriculture season each year. The extent of such migration is estimated to be large; as many as half a million people are estimated to have migrated last year alone. Even if there is no drought, such distress migration arising out of marginal agriculture, has to be prevented by providing wage employment during the off-season. The regular programmes of rural employment assurance are wholly inadequate as they do not tackle these special circumstances obtaining in Chhattisgarh. I am sure the conditions are perhaps no different in the State of Jharkhand also.

43. Suffice it to state that although Chhattisgarh is not a border State, it has its own serious special security problems which need to be addressed without further delay. I would therefore, fervently plead that the States of Chhattisgarh and Jharkhand should also be given special category status for Central assistance, at least for a decade, during the Tenth and Eleventh Plan periods, so as to enable the nascent States to provide their people with the minimum level of socio-economic development in keeping with human dignity. And, Sir, as we all know, unless we do so the objectives of equity under the Plan would only be a mirage.

44. I thank you for this opportunity and, before I close, let me reiterate and plead that the new States, in view of their special problems, should receive special consideration under the Tenth Plan.