What additional benefits does a state get with a special status?
2 Answers
A special status is given to a state based on following parameters -
Currently, 11 states have been given the 'special state status' -
Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Himachal Pradesh, Jammu and Kashmir
The benefits that a state gets under the provision of being a 'special state' are -
Edit as suggested by Zafar ul Haq: Grant is an amount which need not be payed back, however loans should be paid back with interests.
Sources :
Special Category status and centre-state finances
The Special Status to States
- Hilly and difficult terrain
- Low population density
- Strategic locations along the borders of the country
- Economic and infra backwardness
- Non-viable nature for state finances.
Currently, 11 states have been given the 'special state status' -
Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Himachal Pradesh, Jammu and Kashmir
The benefits that a state gets under the provision of being a 'special state' are -
- Preferential treatment in getting Central funds assistance
- Concession on excise duty, this attracts industries to the state
- Significant 30% of the Centre’s gross budget goes to the Special category states
- These states avail themselves of the benefit of debt swapping and debt relief schemes
- In centrally sponsored schemes and external aid special category states get it in the ratio of 90% grants and 10% loans, while other states get 30% of their funds as grants.
Edit as suggested by Zafar ul Haq: Grant is an amount which need not be payed back, however loans should be paid back with interests.
Sources :
Special Category status and centre-state finances
The Special Status to States
First let me clear the air between the terms ‘Special Status’ and ‘Special Category Status’. There is a huge difference between them.
Special status is guaranteed by the Constitution of India through an Act passed by the two-third majority in both houses of the Parliament, as in the case of Jammu and Kashmir, whereas Special Category Status is granted by the National Development Council, an administrative body of the government. While Special Status empowers legislative and political rights, Special Category Status deals only with economic, administrative and financial aspects.
At present there are 11 States that enjoy Special Status and Special Category Status: Arunachal Pradesh, Assam, Himachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.
Special status is guaranteed by the Constitution of India through an Act passed by the two-third majority in both houses of the Parliament, as in the case of Jammu and Kashmir, whereas Special Category Status is granted by the National Development Council, an administrative body of the government. While Special Status empowers legislative and political rights, Special Category Status deals only with economic, administrative and financial aspects.
At present there are 11 States that enjoy Special Status and Special Category Status: Arunachal Pradesh, Assam, Himachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.
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The special status is in the context of Centre-state finances. A special category state gets preferential treatment in federal assistance and tax breaks. There were only three such states in 1969, when the Gadgil formula for sharing central Plan assistance among states was devised. Now, there are 11-the seven north-eastern states, Sikkim, Uttarakhand, Jammu and Kashmir and Himachal Pradesh.Now the newly formed of Andhra Pradesh is given a special status for five years time. They are given a higher share of the Union government's resource allocation because of harsh terrain, backwardness and other social problems.
The special-category states get significant excise duty concessions, persuading industry to relocate/locate manufacturing within their territory. This has been a sore point with neighbouring general-category states. Apart from that, 30% of the Centre's gross budgetary support for Plan expenditure goes to special-category states. Earlier, 70% of the Plan assistance given to the states were loans and the balance 30%, grants.In the case of special-category states, 90% of Plan assistance was given as grants, and only 10% as loans.
The 12th Finance Commission recommended that the Centre give only grants, and leave it to the states to raise loans as they wanted. Since then, the 90% grants: 10% loans formula for special-category states is restricted to centrally-sponsored schemes and external aid. For general category states, external aid is passed on in the exact mixture of loan and grants in which it is received at the Centre. And for them, in the case of centrally-sponsored schemes, only 70% of the central funding is given as grant.
The special-category states get significant excise duty concessions, persuading industry to relocate/locate manufacturing within their territory. This has been a sore point with neighbouring general-category states. Apart from that, 30% of the Centre's gross budgetary support for Plan expenditure goes to special-category states. Earlier, 70% of the Plan assistance given to the states were loans and the balance 30%, grants.In the case of special-category states, 90% of Plan assistance was given as grants, and only 10% as loans.
The 12th Finance Commission recommended that the Centre give only grants, and leave it to the states to raise loans as they wanted. Since then, the 90% grants: 10% loans formula for special-category states is restricted to centrally-sponsored schemes and external aid. For general category states, external aid is passed on in the exact mixture of loan and grants in which it is received at the Centre. And for them, in the case of centrally-sponsored schemes, only 70% of the central funding is given as grant.
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