What additional benefits does a state get with a special status?

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Arpita Yadav, Feminist, Sapiosexual

A special status is given to a state based on following parameters - 

• Hilly and difficult terrain
• Low population density
• Strategic locations along the borders of the country
• Economic and infra backwardness
• Non-viable nature for state finances.

Currently, 11 states have been given the 'special state status' -
Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Himachal Pradesh, Jammu and Kashmir

The benefits that a state gets under the provision of being a 'special state' are -

• Preferential treatment in getting Central funds assistance
• Concession on excise duty, this attracts industries to the state
• Significant 30% of the Centre’s gross budget goes to the Special category states
• These states avail themselves of the benefit of debt swapping and debt relief schemes 
• In centrally sponsored schemes and external aid special category states get it in the ratio of 90% grants and 10% loans, while other states get 30% of their funds as grants.

Edit as suggested by Zafar ul Haq: Grant is an amount which need not be payed back, however loans should be paid back with interests.

Sources :
Special Category status and centre-state finances
The Special Status to States

  

13,110 views • 34 upvotes • Updated 3 Apr, 2014

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Venkaiahreddy Kota

First let me clear the air between the terms ‘Special Status’ and ‘Special Category Status’. There is a huge difference between them.
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.

  

1,931 views • 9 upvotes • Written 6 May

What are the political or social benefits for giving Indian states special status?

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Prithvi Pavan Vetsa

The special status is in the context of Centre-state finances. A special category state gets preferential treatment in federal assistance and tax breaks. There were only three such states in 1969, when the Gadgil formula for sharing central Plan assistance among states was devised. Now, there are 11-the seven north-eastern states, Sikkim, Uttarakhand, Jammu and Kashmir and Himachal Pradesh.Now the newly formed of Andhra Pradesh is given a special status for five years time. They are given a higher share of the Union government's resource allocation because of harsh terrain, backwardness and other social problems. 

The special-category states get significant excise duty concessions, persuading industry to relocate/locate manufacturing within their territory. This has been a sore point with neighbouring general-category states. Apart from that, 30% of the Centre's gross budgetary support for Plan expenditure goes to special-category states. Earlier, 70% of the Plan assistance given to the states were loans and the balance 30%, grants.In the case of special-category states, 90% of Plan assistance was given as grants, and only 10% as loans. 

The 12th Finance Commission recommended that the Centre give only grants, and leave it to the states to raise loans as they wanted. Since then, the 90% grants: 10% loans formula for special-category states is restricted to centrally-sponsored schemes and external aid. For general category states, external aid is passed on in the exact mixture of loan and grants in which it is received at the Centre. And for them, in the case of centrally-sponsored schemes, only 70% of the central funding is given as grant.

No special category status for Seemandhra: plan panel

NEW DELHI, June 13, 2014

No special category status for Seemandhra: plan panel

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In this March 5, 2014 file photo, Deputy Chairman of Planning Commission, Montek Singh Ahluwalia is seen with with Rajya Sabha member T Subbarami Reddy who gave a representation for special package to Seemandhra, in New Delhi.

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Former PM Manmohan Singh had announced in the Rajya Sabha on February 21 that special category status would be extended to Seemandhra for five years.

The residual Andhra Pradesh, known as Seemandhra, can’t be accorded the status of special category State to provide extra Central aid under the current norms, the Planning Commission has said.

“Andhra Pradesh (Seemandhra) does not meet National Development Council criteria (for special category state),” the Commission said in its presentation to Planning Minister Inderjit Singh Rao.

This point is significant because the Union Cabinet headed by former Prime Minister Manmohan Singh on March 2 had directed the Commission to accord special category status to the successor of Andhra Pradesh (Seemandhra) for five years.

Singh had even announced in the Rajya Sabha on February 21 that special category status would be extended to Seemandhra for five years.

Andhra Pradesh has been recently bifurcated into two States - Telangana and Andhra Pradesh. There are demands for according special category status (SCS) from States including Bihar, Rajasthan, Odisha and Jharkhand.

In case of Bihar, an inter ministerial group has said that the State is not eligible to get SCS based on existing criteria. However government is yet to take a decision on Bihar’s demand.

The Commission, however, has intimated to Rajasthan, Odisha and Jharkhand that they are eligible for getting SCS as per the criteria.

About according SCS to Seemandhra, the Commission pointed out to the Minister that any such proposal would have to be endorsed by the country’s apex planning body National Development Council (NDC) headed by the Prime Minister with Cabinet Ministers and all Chief Ministers on its board.

As per the Gadgil—Mukherjee formula for devolution of Central assistance for state plans, 30 per cent of the total funds is earmarked for Special Category States.

As against the composition of Central assistance of 30 per cent grant and 70 per cent loan for major States, special category states receive 90 per cent plan assistance as grant and just 10 per cent as loan.

The special category status to various States in accorded by the NDC based on consideration of a set criteria.

The criteria include hilly and difficult terrain; low population density and or sizeable share of tribal population; strategic location along borders with neighbouring countries; economic and infrastructure backwardness and non—viable nature of state finances.

At present, the existing 11 special category status States are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Uttarakhand, Nagaland, Tripura, Himachal Pradesh, Jammu and Kashmir and Sikkim.

Andhra Pradesh's Endless Wait for Special Status

By Express News Service

Published: 28th August 2014 06:00 AM

Last Updated: 28th August 2014 03:08 AM

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HYDERABAD: Special Category Status (SCS) for Andhra Pradesh has so far remained a pie in the sky. This is causing some degree of disquiet among the AP leaders though they have not lost hope yet because it was the BJP which had fought for it in both Houses of Parliament during the fag-end of UPA-II.

Though then Prime Minister Manmohan Singh made an announcement in Parliament on according SCS for five years, it remained a promise only, causing discomfiture to the leaders of Andhra Pradesh. The Manmohan Singh cabinet in March this year also took a decision to this effect and asked the Planning Commission to do it but that is where the things stand as of now.

In his Independence Day message, Prime Minister Narendra Modi announced that Planning Commission would be disbanded and a new institution would be ushered in to cater to the aspirations of 21st century India and strengthen participation of states, the ruling Telugu Desam Party is wondering how and in what shape SCS would come for Andhra Pradesh.

“When Chandrababu Naidu met the Prime Minister recently, at no stage  was there any room for doubt. He was very much in favour of according  SCS,” a senior TDP functionary said.

The delay in according SCS is on account of the proposal to disband the Planning Commission. “But a brain-storming session is going on as to how to keep the promise of according SCS to AP since it was promised by a Prime Minister on the floor of Parliament at the time of the debate on the bifurcation Act. We are sure of getting the status since it was the BJP which fought for SCS,” the TDP leader said.

The AP government hopes that Narendra Modi would hold ground even if Telangana state wants similar status or for that matter if Tamil Nadu demands that such a status should not be given to AP. “The Centre is not politically weak to acquiesce to the demands of other states on conferring SCS to AP. It has made a commitment and it will honour it,” the functionary said.

Though the Planning Commission will be disbanded and an alternative institution is brought in, according SCS is likely to be entrusted to another institution. The debate at present is which organ of the government should do it - whether it is the Finance Ministry or Planning and Programme Implementation Department.

The AP government is also hopeful that endorsement of National Development Council (NDC) would be done away with since Planning Commission would not be there anymore. If NDC’s endorsement is not required, the work becomes simpler.

Also the government hopes that the eligibility criteria would undergo a sea-change. At present, the Planning Commission clears SCS proposal for states if a State has hilly and difficult terrain, significant tribal population, backward in infrastructure, proximity to borders and low population density.

Who is special

SCS to a State is Granted if it has:

•  Hilly and difficult terrain 
•  Significant tribal population
•  Backward in infrastructure
•   Proximity to borders with neigbouring countries
•  Low population density

90% in the Form of Grant

SCS entails a State to get 90 per cent of the Centre’s devolutions in the form of grant and only 10 per cent as loan. For other states, 30 per cent comes as a grant and the rest as loan. Of the total funds meant for states, 30 per cent is reserved for SCS states.

• Though delay in according SCS is disquieting, AP feels it would soon be through though Planning Commission is being disbanded
• AP leaders have reason to believe that SCS would be delinked from the alternative institution proposed in place of plan panel
• The task likely to be entrusted either to finance ministry or department of planning and programme implementation
• 11 states like Arunachal Pradesh, Manipur, Mizoram, Meghalaya, Assam, Uttarakhand presently enjoy SCS

SECTION - 94 of THE ANDHRA PRADESH REORGANISATION ACT, 2014

SECTION - 94 of THE ANDHRA PRADESH REORGANISATION ACT, 2014

94. (1) The Central Government shall take appropriate fiscal measures, including offer of tax incentives, to the successor States, to promote industrialisation and economic growth in both the States. 

94. (2) The Central Government shall support the programmes for the development of backward areas in the successor States, including expansion of physical and social infrastructure. 

94. (3) The Central Government shall provide special financial support for the creation of essential facilities in the new capital of the successor State of Andhra Pradesh including the Raj Bhawan, High Court, Government Secretariat, Legislative Assembly, Legislative Council, and such other essential infrastructure. 

94. (4) The Central Government shall facilitate the creation of a new capital for the successor State of Andhra Pradesh, if considered necessary, by denotifying degraded forest land.

SECTION - 90 of THE ANDHRA PRADESH REORGANISATION ACT, 2014

SECTION - 90 of THE ANDHRA PRADESH REORGANISATION ACT, 2014

90. (1) The Polavaram Irrigation Project is hereby declared to be a national project. 

90. (2) It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation and development of the Polavaram Irrigation Project for the purposes of irrigation. 

90. (3) The consent for Polavaram Irrigation Project shall be deemed to have been given by the successor State of Telangana. 

90. (4)  The Central Government shall execute the project and obtain all requisite clearances including environmental, forests, and rehabilitation and resettlement norms.

SECTION - 46 of THE ANDHRA PRADESH REORGANISATION ACT, 2014

SECTION - 46 of THE ANDHRA PRADESH REORGANISATION ACT, 2014

46. (1) The award made by the Thirteenth Finance Commission to the existing State of Andhra Pradesh shall be apportioned between the successor States by the Central Government on the basis of population ratio and other parameters:

Provided that on the appointed day, the President shall make a reference to the Fourteenth Finance Commission to take into account the resources available to the successor States and make separate awards for each of the successor States.

46. (2) Notwithstanding anything in sub-section (1), the Central Government may, having regard to the resources available to the successor State of Andhra Pradesh, make appropriate grants and also ensure that adequate benefits and incentives in the form of special development package are given to the backward areas of that State.

46. (3) The Central Government shall, while considering the special development package for the successor State of Andhra Pradesh, provide adequate incentives, in particular for Rayalaseema and north coastal regions of that State.

THE ANDHRA PRADESH REORGANISATION ACT, 2014

THE ANDHRA PRADESH REORGANISATION ACT, 2014

file:///C:/Users/Express/Downloads/APRegACT2014_0.pdf

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ప్రత్యేక హోదా ఇస్తే ఏం వస్తుంది?

ప్రత్యేక హోదా ఇస్తే ఏం వస్తుంది? గ్రాంటు, విదేశీ నిధులతోనే నవ్యాంధ్రకు లాభం

హైదరాబాద్‌, ఆగస్టు 24 (ఆంధ్రజ్యోతి): కేంద్రం నవ్యాంధ్రకు ప్రత్యేక హోదా ఇస్తుందా!? హోదా పేరు లేకుండా ఆర్థిక ప్రయోజనాలు కల్పిస్తుందా!? అందులో గ్రాంటు ఎంత ఇస్తుంది!? ప్రత్యేక హోదాతో సమానంగా 90 శాతం గ్రాంటు ఇస్తుందా? 70 శాతానికే పరిమితం చేస్తుందా? హోదా ఇస్తే ఏపీకి ఒరిగేదేమిటి? హోదా లేకుండా ఆర్థిక ప్రయోజనాలు కల్పిస్తే ఒనగూరే లబ్ధి ఏమిటి? ప్రధాని మోదీతో చంద్రబాబు భేటీ సందర్భంగా వ్యక్తమవుతున్న ప్రశ్నలివి. ప్రత్యేక హోదాతో వచ్చే లాభాలు.. ఏపీకి కలిగే ప్రయోజనంపై ఆర్థిక శాఖ వర్గాలు ఒక నివేదిక తయారు చేశాయి. దాని ప్రకారం, కేంద్రం నుంచి రాష్ట్రాలకు అందే సాయం రెండు రకాలుగా ఉంటుంది. ప్రత్యేక కేటగిరీ హోదా పొందిన రాష్ట్రాలకు ఒక పద్ధతిలో, మిగిలిన రాష్ట్రాలకు మరో పద్ధతిలో ఈ సాయం ఇస్తారు. మన దేశంలో ప్రస్తుతం ప్రత్యేక హోదా పొందిన రాష్ట్రాలు పదకొండు (జమ్మూ కశ్మీర్‌, సిక్కిం, హిమాచల్‌, ఉత్తరాఖండ్‌, అరుణాచల్‌ ప్రదేశ్‌, అసోం, మణిపూర్‌, మేఘాలయ, మిజోరం, నాగాలాండ్‌, త్రిపుర) ఉన్నాయి. కేంద్రం తాను రాష్ట్రాలకు ఇచ్చే సాయంలో 30 శాతం ఈ ప్రత్యేక కేటగిరీ రాష్ట్రాలకు, మిగిలిన 70 శాతం ఇతర రాష్ట్రాలకు ఇస్తుంది. ప్రత్యేక కేటగిరీ రాష్ట్రాలకు కూడా ఎంత అంటే అంత ఇవ్వరు. వాటి వార్షిక ప్రణాళిక సైజు, అందులో ఖర్చు చూసి దాని ప్రకారమే ఇస్తారు. అయితే, అలా ఇచ్చే మొత్తంలో 90 శాతం గ్రాంటుగా ఇస్తారు. మిగిలిన రాష్ట్రాలకు కేంద్రం ఇచ్చే సాయంలో కేవలం 30 శాతం మాత్రమే గ్రాంటుగా ఉంటుంది. వివిధ పద్దుల కింద ప్రత్యేక కేటగిరీ రాష్ట్రాలకు, ఇతర రాష్ట్రాలకు నిధుల కేటాయింపులో తేడా ఇలా ఉంటుంది. 90 శాతం గ్రాంటు వస్తే..!? నవ్యాంధ్రకు 90 శాతం గ్రాంటు ఇచ్చినా భారీగా నిధులు రావని అధికార వర్గాలు చెబుతున్నాయి. 90 శాతం గ్రాంటుగా ఇస్తున్న ప్రత్యేక కేటగిరీ రాష్ట్రాల్లో ఇదే పరిస్థితి నెలకొంది. ఉదాహరణకు, 2013-14 ఆర్థిక సంవత్సరానికి సంబంధించి కేంద్రం ఈ రెండు రకాల రాష్ట్రాలకు కలిపి తన బడ్జెట్‌లో రూ.57,575 కోట్లు కేటాయించింది. ఇందులో ప్రత్యేక కేటగిరీ రాష్ట్రాలకు రూ.17 వేల కోట్లు కేటాయించింది. ఇందులో 90 శాతం గ్రాంటు కింద ఆ 11 రాష్ట్రాలకు కేవలం రూ.15 వేల కోట్లు మాత్రమే ఇచ్చింది. ఇతర రాష్ట్రాలకు 30 శాతం గ్రాంటు కింద రూ.40 వేల కోట్లు ఇచ్చింది. అదే ఏడాది ఉమ్మడి ఆంధ్రప్రదేశ్‌ వార్షిక ప్రణాళికను రూ.53 వేల కోట్లుగా నిర్థారించింది. నవ్యాంధ్రకు ఆ ప్రణాళిక రూ.27 వేల కోట్లుగా ఉంటుందని అంచనా. నవ్యాంధ్రకు ప్రత్యేక కేటగిరీ హోదా ఇస్తే, ఈ ప్రణాళిక సైజు, కేంద్రం లెక్కల ప్రకారం 90 శాతం గ్రాంటు కింద రాష్ట్రానికి వచ్చే సాయం రూ.5600 కోట్లు మాత్రమే ఉంటుందని అంచనా. దీనికన్నా విదేశీ రుణ ప్రాజెక్టులకింద ఎక్కువ సాయం వచ్చే అవకాశం ఉందని ఏపీ ఆర్థిక శాఖ అంచనా. ఆసియా అభివృద్ధి బ్యాంక్‌, జపాన్‌కు చెందిన జైకా, ప్రపంచ బ్యాంక్‌ వంటి అంతర్జాతీయ సంస్థల నుంచి రాష్ట్రానికి వచ్చే రుణ సహాయంలో కూడా తొంభై శాతం గ్రాంటుగా వస్తుంది. విదేశీ రుణ ప్రాజెక్టులు కూడా కేంద్రం ఆమోదిస్తేనే వస్తాయి. కేంద్రాన్ని ఒప్పించి ఈ రుణ ప్రాజెక్టులను ఎంత ఎక్కువ తెచ్చుకోగలిగితే రాష్ట్రానికి అంత ఉపయోగం ఉంటుందని ఆర్థిక శాఖ వర్గాలు చెబుతున్నాయి. అలాగే, సాగునీటి ప్రాజెక్టులకు సంబంధించిన ఏఐబీపీ పథకం కింద కూడా ప్రత్యేక హోదా ద్వారా కొంత లాభం పొందే అవకాశం ఉందన్నది ఆ వర్గాల అంచనా. నీతి ఆయోగ్‌ ఆమోదం పొందిన మేజర్‌, మీడియం ప్రాజెక్టులను పూర్తి చేయడానికి ఈ పథకం కింద కేంద్రం నిధులు ఇస్తుంది. ఇప్పటికే నిర్మాణం మొదలై వచ్చే నాలుగేళ్లలో పూర్తి చేయడానికి అవకాశం ఉన్న సాగునీటి పథకాలకు ఈ నిధులు ఇస్తారు. ప్రత్యేక హోదా వస్తే ఇవి కూడా 90 శాతం గ్రాంటుగా వస్తాయి. అయితే, ప్రత్యేక హోదా ఇచ్చేది లేదని, దాని బదులు ఆ పేరుతో ఆర్థిక ప్రయోజనాలు ఇస్తామని కేంద్రం చెబుతున్న విషయం తెలిసిందే.