Why in news
Andhra Pradesh Chief Minister for the fourth time, Telugu Desam Party (TDP) leader N. Chandrababu Naidu said the State’s economy has gone beyond the stage of even a special category status
His remarks assume significance since the NDA government has already ruled out special category status to any State.
Mr. Naidu’s stance rules out any immediate possibility of a conflict between the BJP and the TDP.
What is the special category status?
The special category status was introduced in 1969 based on the recommendations of the Fifth Finance Commission.
The intent was to help States that are disadvantaged in terms of their geographic, social or economic status to improve their position on par with other, more developed Indian States.
Parameters (Based on Gadgil Formula):
Hilly Terrain;
Low Population Density and/or Sizeable Share of Tribal Population;
Strategic Location along Borders with Neighbouring Countries;
Economic and Infrastructure Backwardness; and
Nonviable Nature of State finances
A State that is granted the special category status would be able to claim more funds from the Centre than otherwise and can also enjoy various tax-related concessions.
For example, a State with special category status would receive 90% of funds from the Centre when it comes to schemes sponsored by the Union government, as against other States which receive only around 60% to 80% of funds from the Centre.
Initially, Jammu & Kashmir, Assam and Nagaland were granted the special category status to aid their economic development.
J&K used to have Special status before Article 370 was repealed
Eleven States including Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand and Telangana (the newest) have been accorded the special category state status.
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