In Andhra Pradesh, the NDA alliance has achieved a historic victory. However, Modi’s inability to form a government without the support of Chandrababu Naidu and Pawan Kalyan at the center marks a contrasting situation. Chandrababu is now adamant about securing special status for the state. Similarly, the JD(U) in Bihar, which won a majority, is also demanding special status. This has once again brought the issue of special status to the national stage. Let's understand what special status is and the benefits it brings to a state.
What is Special Status?
Special status is granted to states in India based on specific criteria. These include being located in hilly areas, having a low population, a significant tribal population, being in strategic border areas, lagging in economic and infrastructure development, and having an unstable financial situation. The benefits of special status include increased central funding and tax concessions. The 14th Finance Commission recommended increasing the tax share from 32% to 42% for states with special status. These states receive 90% central funding for centrally sponsored schemes, compared to 60-75% for other states. Unspent funds do not lapse at the end of the financial year, allowing states to use them in the following year. Additionally, special status states get key exemptions in excise, customs duties, income tax, and corporate tax. The central budget allocates 30% of funds to states with special status, encouraging new industries to set up in these regions.
Although the Constitution does not explicitly provide for special status, the Finance Commission started granting it in 1969. Initially, Jammu & Kashmir, Assam, and Nagaland were given special status. Later, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, and Uttarakhand also received this status. The 14th Finance Commission removed the special status category for states except for the northeastern and three hilly regions.
Why is Special Status Important Now?
For the past decade, both TDP and YSRCP governments in Andhra Pradesh have been striving for special status, which the Modi government has not granted, citing that other states might demand the same. However, with the current political scenario where forming a government at the center without the support of Andhra Pradesh and Bihar seems impossible, the demand for special status is back in focus. Chandrababu Naidu insists on it, while JD(U) is also pushing for the same, creating a renewed debate at the national level.
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