Special Category Status

  • IASbaba
  • February 24, 2023
  • 0
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Context:  Recently , the Union Finance Minister announced that the Centre will not consider the demands for “special category status “ for any states

About Special Category Status :

  • It is a classification given by the Centre to assist development of states that face geographical and socio-economic disadvantages.
  • Under this, the Central government extends financial assistance to states that are at a comparative disadvantage against others.
  • There is no provision of SCS in the Constitution of India.
  • The concept emerged in 1969 with the approval of the Gadgil formula in the Fifth Finance Commission in 1969. 

The parameters required for Special Category Status:

  • Must be economically backward with poor infrastructure.
  • The states must be located in hilly and challenging terrain.
  • They should have low population density and significant tribal population.
  • Should be strategically situated along the borders of neighboring countries.
  • First SCS was accorded in 1969 to Jammu and Kashmir, Assam and Nagaland.
  • The 14th Finance Commission has done away with the ‘special category status’ for states, except for the North-eastern and three hill states.
  • Presently, eleven states have the Special Category Status in the country including Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand, and Telangana.

Benefits to States with SCS:

  • The Centre pays 90% of the funds required in a centrally-sponsored scheme to special category status states as against 60% or 75% in case of other states, while the remaining funds are provided by the state governments.
  • Preferential treatment in getting central funds.
  • 30 percent of the Centre’s gross budget also goes to special category states.
  • Unspent money does not lapse and is carried forward.
  • Significant concessions are provided to these states in excise and customs duties, income tax and corporate tax.
  • These states can avail the benefit of debt-swapping and debt relief schemes.


Previous Year Questions

Q.1)  With reference to India’s Five-Year Plans, which of the following statements is/are correct? (2019)

  1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.
  2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
  3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.

Select the correct answer using the code given below.

  1. 1 and 2 only
  2. 2 only
  3. 3 only
  4. 1, 2 and 3

Q.2) The main objective of the 12th Five-Year Plan is (2014)

  1. inclusive growth and poverty reductions
  2. inclusive and sustainable growth
  3. sustainable and inclusive growth to reduce unemployment
  4. faster, sustainable and more inclusive growth.


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