{"id":41146,"date":"2024-06-06T02:41:18","date_gmt":"2024-06-05T21:11:18","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=41146"},"modified":"2025-09-30T10:55:01","modified_gmt":"2025-09-30T05:25:01","slug":"special-category-status","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/special-category-status\/","title":{"rendered":"What is Special Category Status"},"content":{"rendered":"<h2>What\u2019s in today\u2019s article?<\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>What is the Special Category Status (SCS)?<\/li>\n<li>Why Bihar and AP Demanding SCS and its Feasibility?<\/li>\n<\/ul>\n<h2>Why in News?<\/h2>\n<ul>\n<li>With the General Elections throwing up a fractured mandate, Nitish Kumar\u2019s Janata Dal (United) and Chandrababu Naidu\u2019s Telugu Desam Party are set to play a key role in government formation at the Centre.<\/li>\n<li>As a result, their past demands for special category status (SCS) for Bihar and Andhra Pradesh, respectively, are back in focus.<\/li>\n<\/ul>\n<h2>What is the Special Category Status (SCS)?<\/h2>\n<ul>\n<li><strong>Meaning:\u00a0<\/strong>To be able to get the status,\u00a0<strong>states have to fulfil the following requirements\u00a0<\/strong>(based on Gadgil formula):\n<ul>\n<li>They need to have hilly and difficult terrain.<\/li>\n<li>They need to have low population density and \/or a sizable share of the tribal population.<\/li>\n<li>They must be in a strategic location along borders with neighbouring countries.<\/li>\n<li>They must be economically and infrastructurally backward.<\/li>\n<li>They must have a non-viable nature of state finances.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Evolution of the idea of SCS:<\/strong>\n<ul>\n<li><strong>It was introduced in 1969<\/strong>\u00a0on the recommendations of the\u00a0<strong>Fifth Finance Commission<\/strong>\u00a0(chaired by Mahavir Tyagi) to benefit certain backward states.\n<ul>\n<li>At that time, this was provided to\u00a0<strong>Assam, Jammu and Kashmir and Nagaland<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li>The idea of SCS was first formalised in April 1969 when the\u00a0<strong>Gadgil formula<\/strong>\u00a0of fund allocation was cleared by the National Development Council (NDC).\n<ul>\n<li>On the basis of this formula, more states were given the SCS when they attained statehood.<\/li>\n<li>These include Himachal Pradesh in 1970-71, Manipur, Meghalaya and Tripura in 1971-72; Sikkim in 1975-76; Arunachal Pradesh and Mizoram in 1986-87 and Uttarakhand in 2001-02.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Which states have the SCS?<\/strong>\n<ul>\n<li>Currently,\u00a0<strong>11 states<\/strong>\u00a0have the SCS in the country including\u00a0<strong>Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand, and Telangana<\/strong>.<\/li>\n<li><strong>Telangana<\/strong>, the newest state of India, is accorded the status as it was carved out of another state &#8211; Andhra Pradesh, which hit the state&#8217;s finances.<\/li>\n<li>Along with AP and Bihar, Odisha is another state demanding SCS.<\/li>\n<\/ul>\n<\/li>\n<li><strong>What benefits do states with SCS enjoy?<\/strong>\n<ul>\n<li>Benefits to these states included getting Central assistance of as much as\u00a0<strong>90% in the form of grants and 10% loan<\/strong>\u00a0for centrally sponsored schemes.\n<ul>\n<li><strong>For Non-SCS<\/strong>, the Normal Central Assistance was calculated as 30% grant and 70% loan.<\/li>\n<\/ul>\n<\/li>\n<li>SCSs were also provided\u00a0<strong>Special Plan Assistance<\/strong>\u00a0for projects of special importance to the state.<\/li>\n<li>Further, u<strong>nspent funds\u00a0<\/strong>do not lapse at the end of the financial year.<\/li>\n<li>They also get\u00a0<strong>tax concessions<\/strong>\u00a0although many tax benefits have now been subsumed under the goods and services tax regime.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Why Bihar and AP Demanding SCS and its Feasibility?<\/h2>\n<ul>\n<li><strong>Bihar:<\/strong>\n<ul>\n<li>Bihar has been asking for it ever since the\u00a0<strong>mineral-rich Jharkhand was carved out\u00a0<\/strong>of it back in 2000.<\/li>\n<li>Bihar has been\u00a0<strong>ranked as the poorest state<\/strong>\u00a0in India, according to the Centre&#8217;s\u00a0<a href=\"https:\/\/vajiramandravi.com\/current-affairs\/multidimensional-poverty\/\" target=\"_blank\">Multidimensional Poverty Index (MPI)<\/a>\u00a0report.<\/li>\n<li>It is estimated to have nearly 52% of its population, without having proper access to requisite health, education and living standards.<\/li>\n<li>While the state meets most of the criteria for the SCS,\u00a0<strong>it does not fulfil the criteria of hilly terrain and geographically difficult areas.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>AP:<\/strong>\n<ul>\n<li>After its bifurcation in\u00a0<strong>2014<\/strong>, the then UPA government at the Centre had promised to grant SCS to AP\u00a0<strong>to compensate for the loss of revenue and of Hyderabad<\/strong>, where much of the development was concentrated.<\/li>\n<li>Today\u2019s AP is essentially an agrarian state, with low economic buoyancy, leading to huge revenue disabilities.<\/li>\n<li><strong>SCS would mean higher grants-in-aid to the state government from the Centre.<\/strong>\u00a0To illustrate, per capita grants to SCSs is Rs 5,573 crore per year, whereas AP receives only Rs 3,428 crore.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Feasibility:<\/strong>\n<ul>\n<li>According to the\u00a0<strong>14th Finance Commission<\/strong>, the SCS was a\u00a0<strong>burden on the Centre\u2019s resources<\/strong>\u00a0and this has been used by the central government to reject SCS to more states.<\/li>\n<li>In order to plug the resource gap without extending SCS, tax devolution to states has been raised to\u00a0<strong>42%\u00a0<\/strong>as recommended by the 14th FC and has been maintained by the 15th FC (41%).<\/li>\n<li>However, with the\u00a0<strong>16th FC<\/strong>\u00a0already set up and\u00a0working on the formula for tax\u00a0devolution between the Centre\u00a0and states for the five-year\u00a0period starting April 1, 2026,\u00a0granting special category\u00a0status to these two states may\u00a0be a simpler task.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3>Q.1. What is the National Development Council (NDC)?<\/h3>\n<p>The <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/national-dental-commission-bill-2023\/\" target=\"_blank\">NDC<\/a> is the apex body for decision making and deliberations on development matters in India, presided over by the PM. It was set up on 6 August 1952 to strengthen and mobilise the effort and resources of the nation in support of the Five-Year Plans.<\/p>\n<h3>Q.2. What is the Multidimensional Poverty Index (MPI)?<\/h3>\n<p>Traditionally, poverty is calculated based either on income levels or on expenditure levels. Globally, the MPI uses 10 indicators covering three main areas: health, education, and standard of living. These three dimensions have one-third weight each in the final index.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.businesstoday.in\/india\/story\/special-category-status-for-bihar-and-andhra-pradesh-past-demands-come-back-in-the-limelight-432273-2024-06-05\" target=\"_blank\" rel=\"nofollow noopener\">Special category status for Bihar and Andhra Pradesh: Past demands come back in the limelight<\/a> | <a href=\"https:\/\/www.deccanherald.com\/india\/explained-what-is-special-category-status-accorded-to-states-1192611.html\" target=\"_blank\" rel=\"nofollow noopener\">DH<\/a> | <a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-politics\/special-category-status-naidu-andhra-pradesh-9374411\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Special Category Status was introduced in 1969 on the recommendations of the Fifth Finance Commission to benefit certain backward states.<\/p>\n","protected":false},"author":5,"featured_media":41147,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-41146","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/41146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=41146"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/41146\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/41147"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=41146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=41146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=41146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}