Explained: 'Special Category Status' demand of Bihar and Andhra
In March, Andhra Pradesh CM Chandrababu Naidu quit NDA after a standoff with the Center over the demand of giving Special Category Status (SCS) to his state. The issue has once again caught fire after Bihar Chief Minister Nitish Kumar yesterday asked for the same for Bihar saying it will "act as a catalyst for private investment." So, what's so special about SCS?
First off, what is Special Category Status?
There is no provision of SCS in the Constitution; the Central government extends financial assistance to states that are at a comparative disadvantage against others. The concept of SCS emerged in 1969 when the Gadgil formula (that determined Central assistance to states) was approved. 14 states out of 17 formed the general category, while Assam, J&K, and Nagaland got the SCS status.
Which states are raising demands for Special Category Status?
In the past few years, Andhra Pradesh, Telangana, Bihar, Rajasthan, Chhattisgarh, Jharkhand, Odisha, and Goa have demanded SCS status. Earlier, eight newly formed states after bifurcation got the special category status. The states are Himachal Pradesh (1970), Manipur, Meghalaya, and Tripura (1971), Sikkim (1975), Arunachal Pradesh and Mizoram (1986) and Uttarakhand (2001). So, what are the parameters for getting the SCS status?
Some prominent guidelines for getting SCS status
1. Must be economically backward with poor infrastructure. 2. The states must be located in hilly and challenging terrain. 3. They should have low population density and significant tribal population. 4. Should be strategically situated along the borders of neighboring countries.
What are the benefits of Special Category Status?
Only SCS states enjoy the Special Plan Assistance and Special Central Assistance grants. Moreover, 56.25% of the total corpus of the Normal Central Assistance is reserved for the 11 SCS states. The Centre accords 90% funds for the centrally-sponsored schemes to SCS states, as against 60% to normal category states. But, these states get no preferential treatment in sharing central tax revenue.
Now, what are the demands of Bihar CM?
More recently, Bihar CM Nitish Kumar has pressed upon the fact that Bihar is a land-locked state. "Categories of land-locked and least developed states are internationally eligible for special and differential treatment." "The 15th Finance Commission must locate the resource gaps and support backward states like Bihar in their efforts to catch up with the developed states," he added. Hence, the demand.
Andhra's demands are based on 'promises'
Coming to Andhra Pradesh, its capital Hyderabad used to generate a significant portion of its revenue, but after the bifurcation in 2014, Hyderabad went to Telangana. Manmohan Singh as PM had promised SCS to Andhra. In fact, Singh has said that Andhra would be given SCS status for five years. Notably, BJP had also promised the same to Naidu during the 2014 campaign. The promise, however, remains unfulfilled.
