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Modi to hold talks on special category status for north-eastern states with Tripura CM Manik Sarkar

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By NewsGram Staff Writer

The contentious issue of retaining the special category status for eight north-eastern states will be taken by Prime Minister Narendra Modi on Tuesday while holding talks with Tripura Chief Minister Manik Sarkar.

“The prime minister is eager to discuss the special category status issue with me first,” Sarkar, a member of the Communist Party of India-Marxist (CPI-M) politburo said.

He said all the chief ministers of the eight northeastern states had approached Modi for a meeting over their “joint demand of retaining the special category status for the eight states”.

“But the prime minister wanted to meet me first to discuss the issue,” Sarkar said.

Sarkar, who has been the chief minister of Tripura for more than 17 years, on Monday left for New Delhi where he will meet Modi on Tuesday.

Cutting across political lines, the chief ministers of the eight states ruled by the Congress, Left and regional parties had earlier urged Modi to maintain the special category status.

“The resolution was recently sent to the prime minister and the chief ministers of the eight states sought to meet with him on the issue,” Sarkar said before leaving for the national capital.

“The special status must be maintained to ensure that these states continue to avail financial help and assistance from the central government to help bring these underdeveloped states at par with the other mainland states,” Sarkar told IANS.

Sarkar took the initiative and had drafted the resolution two months back that was adopted by the other chief ministers.

The resolution has been signed by his counterparts Tarun Gogoi (Assam), Lal Thanhawla (Mizoram), Mukul Sangma (Meghalaya), T.R. Zeliang (Nagaland), Nabam Tuki (Arunachal Pradesh), Okram Ibobi Singh (Manipur) and Paban Chamling (Sikkim).

All these states have non-BJP governments except Nagaland, where the Bharatiya Janata Party is a partner of the ruling Nagaland People’s Front-led Democratic Alliance of Nagaland.

Assam, Arunachal Pradesh, Mizoram, Manipur and Meghalaya are ruled by the Congress, while Tripura has a CPI-M led Left Front government and Sikkim is ruled by the Sikkim Democratic Front.

Sarkar, 66, said “After scrutinising the 14th Finance Commission recommendations and the union budget for the current financial year, it appears that the special category status of the northeastern states is going to be ceased.”

Sarkar said all the chief ministers felt this would be “a big blow to the interest of the industry starved backward region which has been suffering from inadequate infrastructure and under-development for many decades giving birth to terrorism, ethnic unrest and numerous problems”.

“This dangerous and disastrous move of discontinuing special category tag cannot be accepted at this stage,” he said.

There are 11 states in India which are clubbed in the special status category.

The special category tag was first given to three states – Assam, Jammu and Kashmir and Nagaland – in 1969 after the Fifth Finance Commission recommended additional assistance to some disadvantaged states in the form of central aid and tax holidays.

Currently, the eight northeastern states, Himachal Pradesh, Jammu and Kashmir and Uttarakhand have the special category tag.

The funding pattern for the special category states for central schemes was in the 90:10 ratio where 90 percent of the total expenditure is borne by the central government while 10 percent is contributed by the state.

Sarkar, known for his clean image and good governance in Tripura, said: “Northeastern states of India deserve a special dispensation despite the region having abundant human and natural resources. The resources remain untapped because of the faulty policy of the central government.”

The Left leader is confident that the region has immense scope to benefit economically through trade and other economic activities with the five neighbouring countries, including China, Myanmar and Bangladesh.

At the same time, he said the future of the northeastern states was uncertain because the performance of the North Eastern Council and ministry of Development of North Eastern Region (DoNER) was “extremely disappointing”.

Only 250 km out of the northeast’s 5,687 km outer perimeter touches India. The remaining represents international boundaries with China (1,300 km), Myanmar (1,643 km), Bhutan (516 km), Bangladesh (1,880 km) and Nepal (97 km).

(With inputs from IANS)

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Fall Of The Currency And Increase In Oil Prices: India ‘s Turmoil

The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars.

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India
Rajesh Kumar, left, shares a ride to work with another employee, Dilip Swain, right, as higher petrol prices in India begin to be felt in people's pocketbooks.VOA

The fall of the currency of India to record lows and rising global oil prices have raised worries that the world’s fastest growing economy faces headwinds that could hurt the fortunes of Prime Minister Narendra Modi’s party in next year’s general elections.

From people filling fuel at gas stations to thousands of students heading out to study overseas, the impact of the slumping rupee is sparking discontent.

Having plunged by about 12 percent against the dollar this year, the rupee is one of Asia’s worst faring currencies, and as in other countries, the slide has accelerated since the crash of the Turkish lira.

“The reasons are global. We must bear in mind that in last few months, dollar has strengthened against almost every currency,” said Finance Minister Arun Jaitley recently as he tried to send out reassuring signals that India’s economy is on track.

India
The rupee has plunged by about 12 percent this year raising fears of spiraling inflation. VOA

The rupee’s sharp depreciation comes at a time when the economy had recovered from a slowdown and surged to a two-year high in the quarter that ended in June. Forecasts put growth for this year at 7.5 percent.

Economy will slow

But economists warn this momentum will be difficult to sustain as the tumbling rupee, along with rising crude oil prices, takes a toll on growth. India, the world’s third largest oil importer, gets almost 80 percent of its fuel needs overseas.

“The government needs to mellow down on growth aspirations,” said N.R. Bhanumurthy, economist with the National Institute of Public Finance and Policy. “The growth needs to come down to a little less than 7 percent.”

Even as the government faces the prospect of a slowing economy, it is under pressure to lower taxes on gas and diesel to bring down the sharp rise in prices. Fuel is one of the most heavily taxed items in India, with rates as high as nearly 50 percent. Prices vary from state to state, but they have gone up by about 14 percent this year.

Hoping to cash in on the growing disaffection over the surge in fuel prices and the sliding rupee, opposition parties led nationwide protests that shutdown offices and schools in several cities this week.

India
Discontent with spiraling fuel prices poses a challenge to Prime Minister Modi’s Bharatiya Janata Party ahead of general elections next year. VOA

The government dismissed the protests, saying that although people faced momentary difficulties, they understood they were because of factors beyond its control.

Political analysts are not so sure, pointing out that fuel prices are a politically sensitive issue in India and usually result in a spike in inflation.

“Anger is rising, there is resentment,” said Satish Misra at the Observer Research Foundation, warning the ruling party will face a backlash “Obviously that is going to have a negative impact on the electoral fortunes of the Bharatiya Janata Party, there is no doubt about that.”

Warnings from economists

Among those who are upset with the high fuel prices is Rajesh Kumar, who commutes 30 kilometers to the advertising agency where he works. Hit by the higher prices that eat into his income, he has started sharing the ride with another employee.

India
Narendra Modi. Wikimedia Commons

“I have given up the idea of buying another car,” he said despondently. “I will not be able to afford the cost of running it.”

Economists however have warned the government against giving in to populist pressures ahead of a series of state polls later this year and general elections around April next year. They say lowering taxes on fuel or taking measures to prop up the currency will strain the country’s finances and hurt the economy in the long run.

Also Read: Diverse Gathering To Be Addressed This World BioFuel Day: PM Narendra Modi

“One needs to be more careful and vigilant,” Bhanumurthy said. “It is easy for India to stay with low growth than experiencing the high deficit.”

But there is also some good news for the Indian economy. The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars. (VOA)