A growing clamour for Special Category Status in Andhra Pradesh has led to State-wide protests, and heated debates in Parliament. Chief Minister Chandrababu Naidu, under immense pressure, met Prime Minister Narendra Modi on Friday seeking a resolution of this issue by the end of the Parliament session on August 12th.
What is SCS?
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: 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.
What kind of assistance do SCS States receive?
The SCS States used to receive block grants based on the Gadgil-Mukherjee formula, which 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 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 SCS States was given with 90% Central share and 10% State share.
What other States are seeking SCS status?
Apart from Andhra Pradesh which is in the news lately, Bihar and Odisha had recently demanded SCS status but they have not been granted the same as they did not meet the criteria.
What is the basis of A.P.’s claim for SCS status?
Following the bifurcation of A.P., Andhra lost a large volume of its revenue due to Hyderabad remaining the capital of Telangana. In a debate in the Rajya Sabha on the A.P. Reorganisation Act on February 20, 2014, then Prime Minister Manmohan Singh had said that SCS would be “extended to the successor State of Andhra Pradesh ... for a period of five years.” This oral submission by the then PM has been the basis for A.P.’s claim to the status.
What has been the Centre’s response?
In a reply to a TDP MP’s question in Parliament on this claim, then Minister of State for Finance Jayant Sinha had said in April 2016 that the Centre had no proposal to modify the criteria for SCS status. And that the increased devolution as recommended by the FFC (which included revenue deficit grants following the bifurcation) is already flowing to the State.