Special Category Status

• The concept of SCS emerged in 1969 when the Gadgil formula (that determined Central assistance to states) was approved.
• 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. 

Guidelines for getting SCS status:

• Must be economically backward with poor infrastructure.
• The states must be located in hilly and challenging terrain.
• They should have low population density and significant tribal population.
• Should be strategically situated along the borders of neighbouring countries.

Assistance under Special Category States:

• The SCS States used to receive block grants based on the Gadgil-Mukherjee formula, which effectively allowed for nearly 30 per cent of the Total Central Assistance to be transferred to SCS States as late as 2009-10.
• Following the constitution of the NITI Aayog (after the dissolution of the Planning Commission) and the recommendations of the Fourteenth Finance Commission (FFC), Central plan 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%) and do not any longer appear in plan expenditure.
• The FFC also recommended variables such as “forest cover” to be included in devolution, with a weightage of 7.5 in the criteria and which could benefit north-eastern States that were previously given SCS assistance. Besides, assistance to Centrally Sponsored Schemes for SCS States was given with 90% Central share and 10% State share.

The first Special Category status:

• The NDC first accorded SCS in 1969 to Jammu and Kashmir, Assam and Nagaland. Over the years, eight more states were added to the list — Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and, finally, in 2010, Uttarakhand. Until 2014-15, SCS meant these 11 states received a variety of benefits and sops.