Why in News?
Protests demanding Special Status for Andhra Pradesh have continued.
FACTS FOR PRELIMS
SPECIAL CATEGORY STATES
The Constitution does not include any provision for categorisation of any State in India as a Special Category Status (SCS) State. But, recognising that some regions in the country were historically disadvantaged in contrast to others, Central plan assistance to SCS States has been granted in the past by the erstwhile Planning Commission body, National Development Council (NDC).
The NDC granted this status based on a number of features of the States which included-
i) Hilly and difficult terrain
ii) low population density or the presence of sizeable tribal population,
iii)strategic location along international borders,
iv) economic and infrastructural backwardness and
v)non-viable nature of State finances.
The SCS States used to receive block grants based on the Gadgil-Mukherjee formula, which effectively allowed for nearly 30 percent of the Total Central Assistance to be transferred to the SCS States. Besides, assistance to Centrally Sponsored Schemes for SCS States was given with 90% Central share and 10% State share.
Following the constitution of the NITI Aayog and the recommendations of the Fourteenth Finance Commission (FFC), Central plan assistance to SCS States has been subsumed in an increased devolution of the divisible pool to all States (from 32% in the 13th FC recommendations to 42%) and do not any longer appear in plan expenditure.
The FFC also recommended variables such as “forest cover” to be included in devolution, with a weightage of 7.5 in the criteria and which could benefit north-eastern States that were previously given SCS assistance. Besides, assistance to Centrally Sponsored Schemes for the SCS States was given with 90% Central share and 10% State share.
Andhra Pradesh has been demanding a Special Category State (SCS) status from Centre ever since it was decided to carve out Telangana along with capital city Hyderabad. Following the bifurcation of A.P., Andhra lost a large volume of its revenue due to Hyderabad remaining the capital of Telangana.
A.P. does not qualify as a Special Category State. It has neither geographical disadvantages nor historical disadvantages such as socio-economic and infrastructural backwardness. Hence offering it the SCS would give impetus to every other state to demand the same.
Instead, Centre had announced a package to grant special assistance to Andhra Pradesh, wherein an amount equivalent to what the state might have got as a special category state will be compensated by Centre through externally aided projects for five years.