‘Special Category Status’ (SCS) for Andhra Pradesh: public continue protest

Context:

• Congress president Rahul Gandhi assured that the party will grant special category status to Andhra Pradesh if voted to power in 2019.

Background:

• Following the bifurcation of Andhra Pradesh, the state lost a large volume of its revenue due to Hyderabad remaining the capital of Telangana.
• 2014: Thus, ‘Special Category Status’ (SCS) was promised to the state by the Congress Government during the state bifurcation and by the BJP during the 2014 Election campaign at Tirupati.
• 2017: According to 14th Finance Commission there is no special category status now to be given.
• Thus, after forming the government by the BJP-led NDA, when the promise was not honored because of “technical issues”, protests for Special Status for Andhra Pradeshstarted throughout the state on Jan 26, 2017 demanding for the ‘Special Category Status’ (SCS).
• To pacify the protest, the Centre instead 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. (Important for Prelims).
• The special package offered meets most of the reasonable expectations of a State struggling to recover from bifurcation and dealing with the imminent loss of the capital city and its revenues.
• Also, Central Board of Direct Taxes (CBDT) would issue two specific notifications on tax concessions being extended to A.P.
• To sum up, the Central government is willing to satisfy every condition by Andhra Pradesh.
• Only variation is that after Finance Commission report instead of formally calling it a special category state, it will be called a special package, which gives same monetary benefits that a special category state gives to a state.

What is a Special Category Status (SCS) State?

• The classification was started after the suggestion given by the 5th finance commission in the year 1969.
• By identifying that some regions in our country are historically disadvantaged in contrast to others, Central plan assistance to the SCS States has been granted in the past.
• The decision to grant special category status to States lie with the National Development Council composed of the Prime Minister, Union Ministers, Chief Ministers and members of the Planning Commission, who guide and review the working of the Planning Commission.
• It is to be noted that the Constitution does not include any provision for categorisation of any State in India as a Special Category Status (SCS) State. (Important for Prelims)

What are the criteria for a state to get it Special Category Status (SCS)?

The National Development Council (NDC) granted the status of Special-category based on a number of features of the States which included:

• hilly and difficult terrain,
• low population density or the presence of sizeable tribal population,
• strategic location along international borders,
• economic and infrastructural backwardness and
• non-viable nature of State finances.

How many states were given Special Category Status (SCS) status in India?

• Initially, three states namely Assam, Nagaland and Jammu & Kashmir were accorded special category status. (Important for Prelims)
• 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. (Important for Prelims)
• Until 2014-15, SCS meant these 11 states received a variety of benefits and sops.

What other States are seeking Special Category Status (SCS) status?

• Andhra Pradesh, Bihar and Odisha had recently demanded SCS status but they have not been granted the same as they did not meet the criteria.

What kind of assistance do Special Category Status (SCS) States have been receiving?

The Planning Commission allocates funds to states through central assistance for state plans. Central assistance can be broadly split into three components: Normal Central Assistance (NCA), Additional Central Assistance (ACA) and Special Central Assistance.

• The Special Category Status (SCS) States used to receive block grants based on the Gadgil-Mukherjee formula.
• It effectively allowed for nearly 30 per cent of the Total Central Assistance to be transferred to SCS States as late as 2009-10.
• Following the constitution of the NITI Aayog (after the dissolution of the Planning Commission) and the recommendations of the Fourteenth Finance Commission (FFC), Central plan assistance to SCS States has been increased 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 SCS States was given with 90% Central share and 10% State share.

What are the constraints involved in providing (SCS) Special Category Status to a state?

The constraints involved in providing Special Category Status are as follows:

A matter of debate:

• The way Special Category Status were assigned to a state has been a matter of debate.
• Various committees used different parameters to classify a state in Special Category status.
• Some states lobby central government to classify them in special category.

Not much economic progress among (SCS) states:

• Data reveals that even after awarding Special category status not much economic progress has been noticed among states.
• Benefit of SCS may act as a stimulus but rest depends on the individual state policy.

No relevance in present context

• The amount of proceeds that states receive has increased after 14th finance commission.
• So the structure does not seem to have any specific relevance in present context.

Demands from other States:

• Considering special status to any new state will result in demands from other States and dilute the benefits further.

Economic feasibility:

•  It is also not economically beneficial for States to seek special status as the benefits under the current dispensation are minimal.

Way ahead:

• Reckless promises are not made during elections, only to be not implemented due to “technical issues”.
• Sadly, even if civil society demands such a law to be implemented, all parties are likely to agree, but it shall never see the light of day – much like all parties claim to support the women’s reservation bill (which they will reiterate on March 8), but it never gets passed.