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Special Status: Another empty promise in another state

For someone sitting in the Telugu States, the moment they hear of Special Status, there is either hope or despair towards the Centre and nothing in between. So, let’s explore whether Special Status is an empty poll gimmick or the real deal for voters at a time where they are falling for cash and other freebies during elections. 
 
The most recent utterance of Special Status for a state came through Finance Minister Nirmala Sitharaman in Pondicherry which will soon be going for elections. Now Pondicherry being a Union Territory, there are questions about why the BJP made the Special Status promise there? 
 
Before we get into the details, let's look at the what, why and how of Special Status:
 
There is no special provision in the Indian Constitution for Special Category Status. So, on what basis do political parties make these promises? In the past, the National Development Council, which was part of the Planning Commission, considered factors such as difficult and hilly terrain, low population density and/or a sizeable share of tribal population, strategic location along borders, economic and infrastructural backwardness, and non-viable nature of state finances. 
 
The NITI Aayog, which has replaced the Planning Commission after Narendra Modi became the PM, has no power to allocate funds now. Therefore, the special favour to states by the Centre through the Planning Commission, no longer exists. What has happened after that is that the 14th Finance Commission removed the concept of Special Category States (SCS) after its recommendations were accepted in 2015. 
 
But, the Modi government then gave a clarification that it will continue the Special Status that it has already granted to North East and three other hilly states. 
 
So, which states enjoy Special Status and what is covered under it?
 
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.
 
Benefits included in special category status:

The central government bears 90 percent of the state expenditure on all centrally-sponsored schemes and external aid while rest 10 percent is given as loan to the state at zero percent rate of interest.

Preferential treatment in getting central funds.

Concession on excise duty to attract industries to the state.
30 percent of the Centre’s gross budget also goes to special category states.

These states can avail the benefit of debt-swapping and debt relief schemes.

States with special category status are exempted from customs duty, corporate tax, income tax and other taxes to attract investment.

Special category states have the facility that if they have unspent money in a financial year; it does not lapse and gets carry forward for the next financial year.
 
Other benefits:

Besides tax breaks and other benefits, the State with SCS will get 90% of all the expenditure on Centrally sponsored schemes as Central grants. The rest of the 10% will also be given as a loan at 0% interest. Usually, the ratio for general category States is 70% loan and 30% grant.
 
Why & how did AP’s Special Status issue come up?
 
During the bifurcation of Andhra Pradesh, the then UPA government promised Special Status for the new Andhra Pradesh state which would be devoid of funds following its separation from Telangana. When the BJP was vying for power, it agreed to granting AP Special Status in the 2014 elections. 
 
What happened to AP’s Special Status?
 
By denying Andhra Pradesh its promise, the Centre came up with a new term called “Special Assistance” for five years instead of “Special Status” which the state did not completely agree to as the Centre has not been honest in its devolution of funds to AP. 
 
Why is Pondicherry seeking Special Status & when did it come up?
 
One of the long-pending demands of the UT has been statehood along with Special Category Status. It came up when Pondi’s CM in 2018 put out the idea for separate statehood, given Pondicherry’s economic growth. However, he said it can only happen through Special Status and handholding of the Centre. 
 
 
So, as an election promise, the BJP government which is now trying to make headway in the South, especially in Tamil Nadu, has pitched “Special Status” as a gimmick to entice voters of the UT. 
 
However, one question that remains is: In Andhra’s case, the government has denied that it cannot get Special Status and since there is no Planning Commission, this proposal remains done with. But, how is the same BJP government promising Special Status when there is no such provision as the party itself stated before? That is something voters need to be aware of. 
 
While Special Status is a poll gimmick for the BJP now, will it work in the era where voters are driven by cash or freebies? One thing is clear: The BJP is exposing its hypocrisy time and again, especially to the Southern States which contribute the highest to the country’s GDP. 

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