SPECIAL CATEGORY STATUS - POLITY
News: Accord
Special Category Status to Andhra Pradesh as it is essential to mitigate the
impact of bifurcation, Jagan urges Modi
What's in the news?
● Chief
Minister Y.S. Jagan Mohan Reddy requested Prime Minister Narendra Modi during a
meeting in New Delhi to initiate steps for sorting out the pending issues
between Andhra Pradesh and Telangana, while pointing out that the dispute
resolution panel set up by the Union Home Ministry was yet to make substantial
progress.
● Mr.
Jagan Mohan Reddy appealed for the grant of Special Category Status (SCS)
which, he insisted, was essential to mitigate the impact of bifurcation.
Special Category Status (SCS):
● The
concept of SCS was first introduced in 1969 by the Fifth Finance Commission.
● It
has not been mentioned in the Constitution.
● The
rationale for special status was that certain states were historically
disadvantaged in contrast to others, because of their inherent features, low
resource base and cannot mobilize resources for development.
● It
provides certain disadvantaged states with preferential treatment in the form
of central assistance and tax breaks,
establishing special development boards, reservation in local government jobs,
educational institutions, etc.
Who grants SCS?
● The
decision to grant special category status was earlier with the former Planning
Commission body called the National
Development Council (NDC).
● NITI
Aayog, which replaced the Planning Commission has no power to allocate funds
for states falling under this category, therefore, now it is discretion of the ruling party at Centre to
dole out special favors to states.
Criteria for special category status:
● Hilly
and difficult terrain.
● Low
population density or sizable share of tribal population.
● Strategic
location along borders with neighboring countries.
● Economic
and infrastructural backwardness.
● Non-viable
nature of state finances.
What Special Category States have in common?
● They
are special in the sense that they have special socio-economic, geographical
problems, high cost of production with less availability of useful resources
and hence low economic base for livelihood activities.
● States
under this category have a low resource
base and are not in position to mobilize resources for their developmental
needs even though their per capita income may appear high.
States accorded SCS:
● Assam,
Jammu and Kashmir, Nagaland, Arunachal Pradesh, Manipur, Sikkim, Himachal
Pradesh, Meghalaya, Tripura, Uttarakhand and Mizoram.
Can special category status be granted to more states
now?
● In
the present scenario, it is believed that
no more states can be given the status of a special category state.
● The
Constitution of India does not include any provision for the categorization of
any state in India as a 'special category state'.
● However,
a wide range of provisions are available to as many as 10 states that have been
listed under Articles 371, 371-A to 371-H, and 371-J.
Benefits of SCS:
● The
central government bears 90 percent of
the state expenditure on all centrally-sponsored schemes and external aid
while the rest 10 percent is given as loan to the state at zero percent rate of
interest.
● Preferential treatment
in getting central funds.
● Concession on excise duty
to attract industries to the state.
● 30 percent of the
Centre's gross budget also goes to special
category states.
● These
states can avail the benefit of debt-swapping
and debt relief schemes.
● States
with special category status are exempted from customs duty, corporate tax,
income tax and other taxes to attract investment.
● Special
category states have the facility that if they have unspent money in a
financial year; it does not lapse and gets carried
forward for the next financial year.
What is the difference between special category status
and special status?
|
Special Category Status |
Special Status |
|
1.
The special category status is granted by the National Development Council,
which is an administrative body of the Government.
Example:
North-eastern and Hilly states. |
1.
The constitution provides special status through an Act that has to be passed
by 2/3rds majority in both the houses of Parliament.
Example:
Erstwhile Jammu and Kashmir
|
|
2.
Special category status deals only
with economic, administrative and financial aspects, but not any legislative
and political rights. |
2.
Special status empowers legislative
and political rights. |
Which states have been demanding special category
status?
● Andhra
Pradesh
● Bihar
● Goa
● Odisha
● Rajasthan.
Present position of Centre:
● After
establishment of NITI Aayog and
recommendations of 14th Finance Commission, Central plan assistance to SCS
States was subsumed in increased devolution of divisible pool to all States
(from 32% in 13th Finance Commission recommendations to 42%).
● The
Central Government held that 14th Finance Commission has effectively removed
the concept of Special Category States after its recommendations were accepted
in 2015 and it has restricted it only to north-eastern and three hilly states.