special state staus

it is all about special category of status in india

1. What Is Special Category Of Status Special category status is a classification that allows states to get significant level of resources necessary for development. This includes a change in the way funds are allocated to the state for planned development. Under special category status, a state will typically receive 90% of funds as grants and 10 % as loans in the centrally sponsored schemes (CSS). In contrast, other states typically receive 30% funds as loans and 70% as grants. There could be variation based on the scheme

2. To Emerge out of poverty and infrastructural backwardness of the 29 states in India, 11 states have been accorded special category status Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Jammu & Kashmir Himachal Pradesh Uttarakhand

3. Ministry Of Commerce & Industry Planning Commission Geographical Isolation Inaccessible terrain Poor resource base Remoteness to larger Market Poor Infra structure Hilly & difficulty terrain Low population density Strategic location along the borders with neighbouring countries Economic and infrastructural backwardness Non-viable nature of state finance Criteria for special category status Conceptually, a state under special category has a low resources base that makes indigenous development improbable. Also, such a state is strategically located mandating a sustained level of development. Special category status is accorded by National Development Council.

4. Background The issue of Special Category Status came up at the time of approval of the Gadgil Formula at the meeting of the National Development Council (NDC) held in April, 1969. Out of the 17 States at that time, 14 States were brought under the Gadgil Formula. The remaining 3 States namely Assam, Jammu & Kashmir and Nagaland were given special consideration. Subsequently, eight (8) other States were granted Special Category Status when they attained statehood. Himachal Pradesh (1970-71), Manipur, Meghalaya and Tripura (1971-72), Sikkim (1975-76), Arunachal Pradesh and Mizoram (1986-87) and Uttarakhand (2001-02) were added to the list. States other than these eleven are referred as General Category States (GCS).

5. Gadgil Formula is now revised and is known as the Gadgil Mukherjee formula that is used for allocation of NCA among General category states. This formula gives weight to population (60%), per capita income (25%), fiscal performance (7.5%) and special problems (7.5%) The decision to grant special category status lies with the National Development Council, composed of the Prime Minster, Union Ministers, Chief Ministers and members of the Planning Commission (replaced by NITI Aayog).

6. The nature of benefits to Special Category states will help us understand why many states crave for this status. The major benefits of SCS are A major portion of the Normal Central Assistance (56.25%) is distributed to eleven Special Category States and the remaining (43.75%) among eighteen General Category States. Only Special Category States receive Special Plan Assistance and Special Central Assistance grants. The assistance for Externally Aided Projects (EAPs) flows to Special category States as 90 per cent grant whereas for General Category States, it flows as loans. Benefits to Special Category States (SCS)

7. Contd…. The state share in Centrally Sponsored Schemes is usually lower for Special Category States, especially the States of North East region as compared to General Category States. Special-category states get a significant excise duty concession & other such tax breaks that attract industries to relocate/locate manufacturing units within their territory. Apart from the central assistance, the states receive a significant amount of revenue from the transfer of central taxes. The current share of states in the net collection of central tax revenue is 32% (to be increased to 42% as per the recommendations of the 14th Finance Commission). There is  no preferential treatment to SCS  when it comes to sharing of the central tax revenue

8. figures in actuals for financial year 2011-12 Type Amount (In Rs Crores) Total Central Government Expenditure 1304365 State’s share in Central Taxes 255414 Total Central Assistance to States 104016 Total Central Assistance to SCS 58103 Total Central Assistance to GCS 45913 Percentage of Total Central Assistance to SCS 55.86% Percentage of Total Central Assistance to GCS 44.14% Sources:  from Planning Commission, Finance Commission of India 

9.  The way Special Category Status were assigned to a state has been a matter of debate. There is no consensus among states related to principles used for granting the SCS. From the earlier experience, there is no guarantee that even after awarding Special category status, economic progress will take place. This means that for economic development, it is important to follow sound economic policies. The positives of SCS may act as a stimulus but everything depends on the each state policy. The amount of proceeds that states receive has increased after 14th finance commission recommendations have been accepted. SCS may lose relevance altogether. ISSUES WITH THE WORKING OF SCS

10. After the constitution of the NITI Aayog and recommendations of the 14th Finance Commission (FFC), Central plan assistance to SCS States has been subsumed in an increased devolution of the divisible pool to all States (from 32% in the 13th FC recommendations to 42%). The FFC also recommended variables such as “forest cover” to be included in devolution, with a weightage of 7.5 in the criteria and which will benefit north-eastern States that were previously given SCS assistance. Status after 14th Finance commission recommendations

11. DEMAND FOR SPECIAL CATEGORY STATUS A demand for Special Category Status for Andhra Pradesh has led to State-wide protests in AP, and heated debates in Parliament. The demands have finally been accepted albeit with significant tweaks.   The demand has been present since the bifurcation of the state. Bihar, Chhattisgarh, Jharkhand, Odisha and Rajasthan have been demanding this status for quite some time now

12. No Odisha did not qualify for special category status. Planning Commission rejected Odisha demand. He describe Odisha’s economy stable and viable. Odisha does not satisfy the criterion of hilly and difficult train although forest in some areas do pose some difficulties. Odisha can be a special status category or not

13. Conclusion The special status state is an aid given to those states that are economically weak and also come under the definite special status criteria. These states have socio economic and environmental disadvantages. It has been seen as the most crucial step for the upliftment of the States by the Indian government.

14. Bibliography https://googleweblight.com/i?u=https://factly.in/what-are-special-category-states-history-numbers-behind-scs/&hl=en-IN http://www.greaterkashmir.com/news/opinion/special-status-v-s-special-category/159028.html https://www.slideshare.net/mobile/risingbihar/what-is-special-category-status-45006379?qid=2ca1cae8-3a46-458e-9304-0991208be66c&v=&b=&from_search=7 http://www.thehindu.com/news/national/andhra-pradesh/special-category-status-is-the-new-catch-phrase/article5735730.ece

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