Special Category Status is a financial aid given to states that fit into specific criteria and are granted mainly because of the inherent features of these states and the relatively lower income base. Right now there are 11 states that have been granted a SCS. Those are Assam, Jammu and Kashmir, Nagaland, Arunachal Pradesh, Manipur, Sikkim, Himachal Pradesh, Meghalaya, Tripura, Uttarakhand and Mizoram.
All the eight North-Eastern states have been categorized as special category. Most of these states have hilly-terrain and have a considerable tribal population. At present allocation of funds to special and general category states is decided based on the Gadgil-Mukherjee formula which is revised from time to time and allocated by the centre.
Around 90 percent of funds that is allocated to the special category states is given as grants, which need not be paid back, while only 10 percent as loans which have to be returned. States with SCS can also enjoy concessions in excise and customs duties, income tax rates and corporate tax rates as determined by the government.
For Andhra Predesh:
The demand to identify Andhra Pradesh as a Special Category State gained momentum after the state split into two. India’s 29th state, Telangana was formed which also took away AP’s capital, Hyderabad. Hyderabad was not just the capital but also a rising IT hub with about 80-90 per cent of jobs. Though AP got to share Hyderabad as the capital with Telangana for 10 years, it now has the burden to build its own capital at par with Hyderabad and provide facilities that will attract investments, to keep the state going. Andhra Pradesh thus had lost the revenue from Hyderabad and has the additional burden.
The then ruling Congress promised AP SCS for five years, while the BJP in opposition also joined the chorus and demanded that the period be extended to 10 years instead. However after the BJP government came to power, there has been no move to give SCS to the state. This has further angered the people of the state.
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