What is Special Category status? What assistance do states with Special Category States get?

Published: May 28, 2019

Special category status is given to the areas in India which are historically disadvantaged as compared to others. The Centre assists these states with funds. Constitution does not have any provision for categorisation of any state as a Special Category Status (SCS) State.
About SCS states

  • For giving status of SCS to a state the NDC considered factors such as difficult and hilly terrain, low population density, strategic location along borders, economic and infrastructural backwardness, and non-viable nature of state finances.
  • Fourteenth Finance Commission effectively removed the concept of Special Category States after its recommendations were accepted in 2015.

Assistance given to states with Special Category States
States which are granted special category status enjoy several benefits. These include

  • Concession on excise duty to attract industries to the state
  • 30% of the Centre�s gross budget also goes special category states
  • States can avail the benefit of debt-swapping and debt relief schemes
  • Centrally Sponsored Schemes and external aid � Special Category States get it in the ratio of 90% as grant, and 10% as loans.
  • Special Category States also get tax breaks to attract investment and preferential treatment in getting funds from centre

The NDC�first accorded SCS in 1969 to Jammu and Kashmir, Assam and Nagaland. Eight more states were added to the list � Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and finally Uttarakhand in 2010.

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