Special Category Status (SCS)
Kartavya Desk Staff
Context: The strong showing of Chandrababu Naidu’s Telugu Desam Party (TDP) and Nitish Kumar’s Janata Dal-United (JD(U)) in the 2024 Lok Sabha elections has reignited their calls for special category status (SCS) for their respective states, Andhra Pradesh and Bihar.
About SCS:
Special Category Status (SCS) | Description
About SCS | Special Category Status (SCS) is a classification granted by the Centre to assist in the development of states facing geographical and socio-economic disadvantages. Introduced in 1969 on the recommendations of the Fifth Finance Commission, it was initially granted to Jammu & Kashmir, Assam, and Nagaland. Later, states like Sikkim and Tripura were also included. The SCS States used to receive grants based on the Gadgil Mukherjee formula. However, after the recommendations of the 14th Finance Commission, SCS was stopped for any new states.
Current Status | Currently, no new states have been granted SCS. Special funding patterns for North Eastern and Himalayan states are based on recommendations from a Sub-Group of Chief Ministers, not through SCS.
Factors for SCS | Before granting SCS to a state, five factors were considered: hilly and difficult terrain, low population density and/or significant tribal population, strategic location along international borders, economic and infrastructural backwardness, and non-viable nature of state finances.
States with SCS | Currently, 11 states in India have SCS: Arunachal Pradesh, Assam, Himachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand.
Benefits of SCS | States with SCS receive Centre-State funding from centrally sponsored schemes in a more favourable ratio of 90:10 compared to general category states. They also enjoy tax concessions and exemptions to attract investment.
Demand from Bihar and Andhra Pradesh | Bihar and Andhra Pradesh have been demanding SCS. Bihar’s demand is based on its low per capita income and high poverty rates. Andhra Pradesh demands SCS due to revenue loss after the 2014 bifurcation, as promised by former Prime Minister Manmohan Singh.
Source: TH