Special category states in India

Special category states in India:

The decision to grant special category status to States lie with the National Development Council.

Background: Initially, three states namely Assam, Nagaland and Jammu & Kashmir were accorded special category status and later on eight other states were also given special category status namely: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Uttarakhand, Tripura, Himachal Pradesh, and Sikkim and thus the list is now increased to eleven.

The bases on the basis of which NDC decides whether a State should be accorded special status or not includes:

• hilly and difficult terrain.
• low population density and or sizeable share of tribal population.
• strategic location along borders with neighboring countries.
• economic and infrastructure backwardness and non-viable nature of state finances.

OTHER IMP. DETAILS :- 

• In order to achieve the status of a special category state, a state has to project itself as socioeconomically or strategically vulnerable state.
• The Finance Commission is entrusted with the work of distribution of central tax revenues among states. The Finance Commission also recommends the principles governing non-plan grants and loans to states.
• The special category states get 30% of the total assistance for all states while the other states share the remaining 70%.
• The nature of the assistance also varies for special category states. Normal Central Assistance (NCA) is split into 90% grants and 10% loans for special category states, while the ratio between grants and loans is 30:70 for other states.

BENEFITS :-

The main benefits of special category status are: 

a significant concession in excise and customs duties 

concession in income and corporate taxes 

Centre bears 90% cost of all Centrally sponsored schemes 

External aid will also to be devolved in the same ratio as received by the Centre. 

Difference between special status and special category status:

 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.