Context:
Special Category Status (SCS) demand by Bihar and Andhra Pradesh gained momentum after 2024 Lok Sabha Elections results
Special Category Status:
- Classification given by the Centre to assist in the development of those states that face certain geographical and socio-economic disadvantages.
- Genesis – Introduced in 1969 on the recommendations of the Fifth Finance Commission to benefit certain disadvantaged states with preferential treatment.
- Grants for SCS were based on – Gadgil-Mukherjee formula.
- Criteria outlined in the Gadgil-Mukherjee Formula include:
- Hilly terrain
- Low population or sizeable share of tribal population
- Strategic location along borders
- Economic and infrastructure backwardness
- Nonviable nature of state finances
- Current Status – 11 states have SCS – Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand, and Telangana.
- 14th Finance Commission effectively removed the concept of SCS.
- Instead, it advised the Centre to raise the state’s share of tax receipts from 32% to 42%, which has been in place since 2015.
Special Status Vs. Special Category Status:
| Aspect | Special Status | Special Category Status |
| Granting Authority | Passed through an Act with 2/3rd majority in both houses of Parliament | Granted by the National Development Council, an administrative body of the government |
| Example | Jammu and Kashmir had special status under Article 370 and special category status | After the abrogation of Article 35A and the change in Jammu and Kashmir’s status to a union territory, it no longer holds special category status |
| Applicability | Provided through specific constitutional provisions such as Articles 371, 371-A to 371-H, and 371-J | Applied based on criteria like hilly terrain, low population density, tribal population, strategic location, economic and infrastructure backwardness, and nonviable state finances |
| Provisions Covered | Empowers legislative and political rights | Deals with economic, administrative, and financial aspects |
Benefits of SCS:
- Central government pays 90% of the funds in centrally sponsored schemes while other states get 60% to 75% of the funds.
- Preferential treatment in getting central funds.
- In case of unspent money, the states with SCS have the provision to carry it forward.
- These States can avail the benefit of debt-swapping and debt relief schemes.
- SCS states also enjoy a significant concession on excise, customs duties, income tax, and corporate tax.
- 30% of the Centre’s Gross Budget goes to Special Category states.
Source: The Hindu
Previous Year Question
The provisions in the Fifth Schedule and Sixth Schedule in the Constitution of India are made in order to;
[UPSC Civil Service Exam – 2015 Prelims]
(a) protect the interests of Scheduled Tribes
(b) determine the boundaries between states
(c) determine the powers, authorities, and responsibilities of Panchayats
(d) protect the interests of all the border State
Answer: (a)
