Special Financial Packages for Bihar and Andhra Pradesh

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Questions and Answers

What is a potential risk of relying on short-term gains from special packages?

It fosters long-term self-reliant growth.

It may lead to dependency on central assistance. (correct)

It encourages structural reforms.

It reduces administrative efficacy.

What could be a consequence of unequal distribution of special packages among states?

Increased feelings of neglect among certain states. (correct)

Enhanced cooperation between central and state governments.

Stronger inter-state relationships.

Balanced social benefits across communities.

Which of the following is NOT a suggested way to improve the allocation of special packages?

Develop a clear framework based on measurable criteria.

Implement strict monitoring and evaluation mechanisms.

Increase influence of political lobbying. (correct)

Create customized development plans for each state.

How can public-private partnerships benefit the allocation of special packages?

By mobilizing additional funding and expertise. Signup and view all the answers

What approach can help reduce the demand for special packages among states?

Decentralization granting greater fiscal autonomy. Signup and view all the answers

What is one of the main purposes of special financial packages for states?

To offer financial assistance to states facing geographical and socio-economic challenges. Signup and view all the answers

Which article of the Constitution empowers the Centre and states to make discretionary grants?

Article 282 Signup and view all the answers

What is a significant concern regarding the utilization of special packages by states?

Effective utilization depends on the state’s administrative capacity. Signup and view all the answers

What was the announced financial support for irrigation and flood mitigation projects in Bihar?

Rs. 11,500 crore Signup and view all the answers

Which initiative focuses on economic opportunities for states in the Eastern regions, including Bihar and Andhra Pradesh?

Purvodaya: Vikas bhi Virasat bhi Signup and view all the answers

What is a potential implication of providing special financial packages to states?

It can lead to increased fiscal burden on the Centre and other states. Signup and view all the answers

What was the financial support arranged for Andhra Pradesh in FY 24-25?

Rs. 15,000 crore Signup and view all the answers

Which project is mentioned as essential for ensuring food security for the nation in Andhra Pradesh?

Polavaram Irrigation Project Signup and view all the answers

Study Notes

Demand for Special Financial Packages

Chief Ministers of Bihar and Andhra Pradesh recently requested special financial packages.
Union Budget 2024-25 allocated special packages for both states.

Allocation Details for Bihar

Financial support of ₹11,500 crore announced for projects including:
- Kosi-Mechi intrastate link project.
- Other irrigation and flood mitigation schemes.

Allocation Details for Andhra Pradesh

Financial support of ₹15,000 crore designated for FY 24-25.
Key projects include:
- Completion of the Polavaram Irrigation Project to ensure national food security.
- Development of essential infrastructure along:
  - Vishakhapatnam-Chennai Industrial Corridor (Kopparthy node).
  - Hyderabad-Bengaluru Industrial Corridor (Orvakal node).

Overview of Special Packages

Special packages provide financial assistance to states with unique geographical and socio-economic challenges.
These packages are discretionary and not mandated by need; they fall under Article 282 of the Constitution, allowing grants for public purposes.

Implications of Special Packages

Fiscal Prudence: Increased fiscal burden on the Centre and may affect other states.
Governance Issues: Dependence on the state's administrative capacity for effective utilization can lead to mismanagement.
Dependency Risks: Short-term financial assistance may prevent states from initiating structural reforms, fostering dependency on central support.
Federal Tensions: Unequal allocation can create friction between the Centre and states, prompting feelings of neglect and conflict.
Social Unrest: Perception of unfair benefit distribution can lead to social discord among communities.

Recommended Actions for Improvement

Establish a clear, objective framework for special package allocation, focusing on measurable criteria like poverty levels and infrastructure gaps.
Develop tailored initiatives that address specific needs of each state, particularly in infrastructure and employment.
Encourage Public-Private Partnerships (PPPs) to attract additional resources and lessen the fiscal burden on the Centre.
Enhance monitoring and evaluation mechanisms to improve administrative efficiency and prevent fund misuse.
Promote decentralization to give states greater fiscal autonomy and decision-making power, reducing reliance on special packages.

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Description

Explore the details surrounding the recent financial allocations made to Bihar and Andhra Pradesh as part of the Union Budget 2024-25. This quiz covers key projects and the significance of these financial packages in addressing the unique challenges faced by these states.