Recently, Bihar Government clarified that his party had not dropped the demand of special category status to Bihar but it was up to the Centre to take a decision on it.
Context
Recently, Bihar Government clarified that his party had not dropped the demand of special category status to Bihar but it was up to the Centre to take a decision on it.
About Special category status
- Special Category Status (SCS) refers to a classification given by the Centre to assist in the development of those states that face geographical and socio-economic disadvantages.
- This concept was first introduced on the recommendation of the fifth Finance Commission in 1969.
- The parameter of SCS were:
- 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
- Assam, Nagaland and Jammu & Kashmir were granted special status in 1969.
- In the year 1974-1979, Himachal Pradesh, Manipur, Meghalaya, Sikkim and Tripura were added under the special category.
- The states, Arunachal Pradesh and Mizoram, were added to SCS in 1990, the states increased to 10.
- In 2001, Uttarakhand State was given special category status.
Who provides the status?
- 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.
- Now, Special Category Status (SCS) is given by the Centre Government.
Benefits to states with special category status
- Central government bears 90 percent of the state expenditure on all centrally-sponsored schemes and external aid while the rest 10 percent is given as loan to the state at zero percent rate of interest.
- States with special category status are exempted from customs duty, corporate tax, income tax and other taxes to attract investment.
- 30 percent of the Centre's gross budget also goes to SCS.
- These states can avail the benefit of debt-swapping and debt relief schemes.
