Special Provisions in India’s Federal Structure for Special Category Status

The distinctiveness of India’s federal structure lies in the exceptional treatment extended to various States through Special Category Status. These Special Category Status provisions were introduced to accommodate diverse sizes, populations, and social and historical contexts. Article 371 ensures Special Provisions for States like Andhra Pradesh, Goa, Gujarat, Maharashtra, Sikkim, and Telangana.

What Are the Criteria for Special Category Status in India?

• Recommendations of the Fifth Finance Commission: The special category status was introduced in 1969 on the recommendations of the Fifth Finance Commission to benefit certain backward states having hilly terrains, strategic international borders, and economic and infrastructural backwardness. 
• To be able to get the Special Category Status, states have to fulfill the following requirements:
  • They need to have hilly and difficult terrain 
  • They need to have low population density and /or a sizable share of the tribal population.
  • They must be in a strategic location along borders with neighboring countries.
  • They must be economically and infrastructurally backward
  • They must have non-viable nature of state finances 

States with Special Category Status: Unique Provisions and Telangana’s Status

• Special Provisions for Unique Contexts: Special provisions primarily pertain to the northeastern States, such as Assam, Nagaland, Arunachal Pradesh and Mizoram. 

• These provisions stem from their sizable indigenous tribal populations, distinct histories and cultures.

• Hilly States and Others: Special provisions also extend to hilly States like Himachal Pradesh.
• Status to Telangana: India’s newest state, Telangana, received this status as a result of being split apart from Andhra Pradesh, which had an adverse financial impact.

What Benefits Do States Gain from Special Category Status?

• Centre Sponsored Scheme: Under this Special Category Status, the government pays 90 per cent of the funds in schemes that the Centre sponsors. 
• Regular States: Regular states get 60 per cent to 75 percent of the fund from the Centre under the same schemes and they have to manage the rest. 
• Carry Forward Provision: In case of unspent money, the states with SCS have the provision to carry it forward. 
• Tax Rebates: These states also enjoy a significant concession on excise, customs duties, income tax, and corporate tax. 

Conclusion:

• Special Category Status provisions reflect India’s commitment to accommodating diverse regional and cultural factors within its federal system, fostering unity while respecting the distinct needs and identities of its various states and territories and the federal structure.

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