Union Finance Minister has said that it is not possible to give Special Category Status (SCS) to Andhra Pradesh as 14th Finance Commission had removed the granting of SCS to any State.Further,he said that special financial package given to Andhra Pradesh was similar to the Special Category Status (SCS).
There is no provision of SCS in the Constitution,the Central government extends financial assistance to states that are at a comparative disadvantage against others.The concept of SCS emerged in 1969 when the Gadgil formula (that determined Central assistance to states) was approved.
The guidelines for getting SCS status includes:(a)hilly and difficult terrain (b)low population density or the presence of sizeable tribal population (c)strategic location along international borders,(d)economic and infrastructural backwardness and (e)non-viable nature of State finances.
Initially,three states namely (a)Assam (b)Nagaland and (c)Jammu & Kashmir were accorded special category status.And later on eight other states were also given special category status namely:(d)Arunachal Pradesh (e)Meghalaya (f)Mizoram (g)Uttarakhand (h)Tripura (I)Himachal Pradesh(j)Sikkim and (h)Manipur.However,Manipur lost the special category status owing to the Fourteenth Finance Commission recommendations.
Following the constitution of the NITI Aayog and the recommendations of the 14th Finance Commission (FFC),Central planned assistance to SCS States has been subsumed in an increased devolution of the divisible pool to all States (from 32% in the 13th FC recommendations to 42%).
SCS states enjoy concessions in excise and customs duties and income tax rates.Besides,assistance to Centrally Sponsored Schemes for SCS States was given with 90% Central share and 10% State share.
Andhra Pradesh has said that following the bifurcation of A.P.,Andhra lost a large volume of its revenue due to Hyderabad remaining the capital of Telangana.Further,oral submission by the then PM in 2014 has also been the basis for A.P.’s claim to the Special category status.
The Central government has said that A.P. does not qualify as a Special Category State.It has neither geographical disadvantages nor historical disadvantages such as socio-economic and infrastructural backwardness .Hence offering it the SCS would give impetus to every other state to demand for the same.