Special category states

• Bihar Cabinet has recently passed a resolution seeking special category status to State.
• Niti Aayog, in its first ‘Multi-dimensional Poverty Index’ (MPI) report, ranked Bihar as the poorest state in India, estimating that nearly 52 per cent of its population did not have access to requisite health, education and living standards.

ABOUT SCS

• Special category status is generally granted to States which face geographical and socio-economic disadvantages, such as those which
  • lie along an international border,
  • have hilly terrain,
  • a sizable share of tribal population,
  • suffer from economic and infrastructural backwardness or
  • non-viable nature of state finances.
• Such States receive a higher share of Central funding and financial support for development purposes.
• The ‘special category’ status to a state, first introduced in 1969 by 5^th Financial Commission, allows preferential treatment in the form of Central assistance and tax breaks, establishing special development boards, reservation in local government jobs, educational institutions, etc. to disadvantaged states.
  • This formula was named after the then Deputy Chairman of the Planning Commission, Dr Gadgil Mukherjee and is related to the transfer of assistance to the states by centre under various schemes.
• Initially, three states—Assam, Nagaland and Jammu & Kashmir—were granted special category status.
  • Since then, eight more have been included—Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and Uttarakhand.
• After the dissolution of the planning commission and the formation of NITI Aayog, the recommendations of the 14th Finance Commission were implemented which meant the discontinuation of the Gadgil formula-based grants.
  • The 14^th Finance Commission effectively removed the concept of special category status.

CONSTITUTIONAL BACKING

• The Constitution of India does not include any provision for the categorization of any state in India as a ‘special category state.
• However, a wide range of provisions are available to as many as 10 states that have been listed under Articles 371, 371-A to 371-H, and 371-J.