SPECIAL CATEGORY STATUS
CONTEXT:
- Recently, Bihar cabinet passed a resolution seeking the grant of special category status (SCS) to Bihar.
WHAT IS SPECIAL CATEGORY STATUS (SCS) ?
- A Special Category Status (SCS) is a classification given by Centre to assist in the development of those states that face geographical and socio-economic disadvantages like hilly terrains, strategic international borders, economic and infrastructural backwardness, and non-viable state finances.
- The intention behind these provisions is to safeguard the interest and aspirations of certain backward regions or to protect cultural and economic interests of the tribal people or to deal with the disturbed law and order in some parts.
- The Constitution of India does not include any provision for the categorization of any state in India as a ‘special category state.
CRITERIA FOR SCS:
- Hilly and difficult terrain
- Low population density or sizeable share of tribal population
- Strategic location along borders with neighbouring countries
- Economic and infrastructural backwardness
- Non-viable nature of state finances
BENEFITS UNDER SCS:
- States which are granted special category status enjoy several benefits.
- The central government bears 90 percent of the state expenditure on all centrally-sponsored schemes and external aid while rest 10 percent is given as loan to 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 carry forward for the next financial year.
WHO GRANTS SCS STATUS TO STATES?
- The decision to grant special category status lies with the National Development Council, composed of the prime minister, union ministers, chief ministers and members of the planning commission, who guide and review the work of the commission.
- Special category status for plan assistance has been granted in the past by the National Development Council (NDC) to some states that are characterized by a number of features necessitating special consideration.
SYLLABUS: PRELIMS, CURRENT AFFAIRS
