Jaipur- Special Category State (SCS) is again in the headlines. With the General Elections resulting in a fractured mandate, Nitish Kumar’s Janata Dal (United) and Chandrababu Naidu’s Telugu Desam Party are poised to play crucial roles in forming the central government.
Consequently, their longstanding demands for SCS for Bihar and Andhra Pradesh have come back into the spotlight.
In a surprising development, former Rajasthan Chief Minister Ashok Gehlot has reignited the demand for special category status for Rajasthan, just as Narendra Modi is set to take the oath for his third consecutive term as Prime Minister. Notably, the Planning Commission had turned down Rajasthan government’s request for special category status in March 2010 — it was headed by Congress’ Ashok Gehlot at that time.
The Commission had said: “It would be more appropriate to provide financial assistance/additional Central assistance… rather than changing the status.”
On Saturday, Gehlot took to his social media handle X to make his case. He highlighted the unique challenges that Rajasthan faces, including its vast desert area, limited water resources, and large geographical expanse. He argued that Rajasthan should be the first state to receive special status.
In his post, Gehlot wrote:
“ Shri Narendra Modi will take the oath for the Prime Minister's office. According to media reports, due to the weakened position of this government, Bihar and Andhra Pradesh are likely to get special state status. I want to inform you that the first need for special state status or special attention from the central government is for Rajasthan because our state is the largest desert state. Only a small part of the state has a river that flows throughout the year, and the geographical conditions are challenging. Rajasthan accounts for 10% of the country’s area, but only 1% of the water. The distance between villages is so long that the cost of delivering every service, including electricity, water, and roads, is very high. For example, in some places under the Jal Jeevan Mission, the cost of installing a water connection is more than Rs. 20,000. Some districts in our state are larger than many other states. Therefore, our long-standing demand for special state status remains. I request the designated Prime Minister Narendra Modi that Rajasthan has the first right to special state status, and it should be fulfilled.”
While Gehlot's demand has brought Rajasthan into the spotlight, Andhra Pradesh and Bihar have been at the forefront of seeking SCS for their states. Both states argue that special status would address their unique developmental challenges and help them achieve economic growth and social development.
Bihar and Andhra Pradesh have been demanding SCS due to the economic impacts of their bifurcation. Bihar lost a resource-rich region when Jharkhand was carved out in 2000. Similarly, Andhra Pradesh faced significant economic challenges after the creation of Telangana in 2014, especially with the loss of its administrative and financial capital, Hyderabad.
The concept of Special Category Status (SCS) was introduced during a meeting of the National Development Council (NDC) in April 1969, when the Gadgil Formula was approved.
Out of the 17 states in India at that time, 14 states followed the Gadgil Formula. However, Assam, Jammu & Kashmir, and Nagaland received special consideration.
Later, eight more states were granted SCS when they became states:
- Himachal Pradesh (1970-71)
- Manipur, Meghalaya, and Tripura (1971-72)
- Sikkim (1975-76)
- Arunachal Pradesh and Mizoram (1986-87)
- Uttarakhand (2001-02)
These states, along with the original three, are referred to as Special Category States (SCS), while all other states are called General Category States (GCS).
The Gadgil Formula, which has since been revised to the Gadgil Mukherjee Formula, is used to allocate funds among General Category States. This formula considers:
- Population (60%)
- Per capita income (25%)
- Fiscal performance (7.5%)
- Special problems (7.5%)
Decision-Making Authority
The decision to grant Special Category Status is made by the National Development Council. This council includes the Prime Minister, Union Ministers, Chief Ministers, and members of the Planning Commission, which has been replaced by NITI Aayog.
1. Higher Funding for Projects: The central government covers 90% of the costs for centrally-sponsored schemes in special category status states, compared to 60% or 75% for other states. The remaining funds come from the state governments.
2. Carry Forward of Unspent Funds: Any money that is not used in a financial year does not expire and can be used in the following years.
3. Tax Concessions: These states receive significant tax breaks, including reduced excise and customs duties, as well as lower income tax and corporate tax rates.
4. Larger Share of Budget: Special category states receive 30% of the central government's total budget.
1. Increased Central Financial Burden: Providing special status puts more strain on the central government's finances.
2. Encourages More Demands: Granting special status to one state often leads to similar demands from other states.
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