Recently, a person in Andhra Pradesh set himself ablaze demanding for a special category status (SCS) to Andhra Pradesh. He eventually succumbed to injuries. The immolation goes to show the emotiveness of the issues.
But what is the demand for SCS all about? Why is it being denied to the state of AP and why is it so important for the state to be accorded the status?
What is the special category status?
SCS is a financial aid given to states that fit into specific criteria and are granted mainly because of the inherent features of these states and the relatively lower income base. According to PRS legislative research, the criteria include hilly and difficult terrain, sizeable share of tribal population, economic and infrastructural backwardness, low population density, strategic location along the borders with neighboring countries and non-viable nature of state finances.
Right now there are 11 states that have been granted a SCS. Those are Assam, Jammu and Kashmir, Nagaland, Arunachal Pradesh, Manipur, Sikkim, Himachal Pradesh, Meghalaya, Tripura, Uttarakhand and Mizoram.
All the eight North-Eastern states have been categorized as special category. Most of these states have hilly-terrain and have a considerable tribal population.
At present allocation of funds to special and general category states is decided based on the Gadgil-Mukherjee formula which is revised from time to time and allocated by the centre.
Around 90 percent of funds that is allocated to the special category states is given as grants, which need not be paid back, while only 10 percent as loans which have to be returned.
States with SCS can also enjoy concessions in excise and customs duties, income tax rates and corporate tax rates as determined by the government.
Why is it such a big deal in AP?
The demand to identify Andhra Pradesh as a Special Category State gained momentum after the state split into two. India’s 29th state, Telangana was formed which also took away AP’s capital, Hyderabad. Chandrababu Naidu from the Telugu Desam Party (TDP) won the state elections in the newly formed Andhra Pradesh and became its Chief Minister. Naidu was quoted as saying that the split was a raw deal for AP, as it has no capital, no infrastructure and no institutions in Seemandhra.
Hyderabad was not just the capital but also a rising IT hub with about 80-90 per cent of jobs. Though AP got to share Hyderabad as the capital with Telangana for 10 years, it now has the burden to build its own capital at par with Hyderabad and provide facilities that will attract investments, to keep the state going. Andhra Pradesh thus had lost the revenue from Hyderabad and has the additional burden.
The then ruling Congress promised AP SCS for five years, while the BJP in opposition also joined the chorus and demanded that the period be extended to 10 years instead. However after the BJP government came to power, there has been no move to give SCS to the state. This has further angered the people of the state.
Self-immolation for political reasons is not new for Telugu people. During the 1969, Telangana Agitation, the demand for the formation of Telangana, grew violent and many students laid down their lives for their demand. Today when finally the state has been bifurcated, people are expressing their demand to get a SCS for their state by setting themselves ablaze.
Which are the other states demanding it?
After it was found that the Gadgil-Mukherjee formula needs to be revised, the Rajan Committee was formed and experts feel that this committee gave a better system to allocate funds. The committee’s report was sanctioned in May 2013. The committee identified certain states with much lower development indexes and needed extra help from the center.
Later some of the states that were identified as backward by the Rajan Committee used the report to claim SCS for their respective state. Political parties from various states used this as an opportunity. According to the Rajan Committee’s report, Odisha was identified as the least developed state, followed by Bihar and Madhya Pradesh. The indicators to identify these states included, monthly per capita consumption, expenditures on education, health and household amenities, rate of poverty, female literacy rate, percentage of SC/ST in the total state’s population and the urbanization status.
If Rajan Committee recommendations are accepted, then some of these states that are now demanding a SCS may get it.
Bihar: Nitish Kumar, the Bihar CM has been reiterating his demand to grant SCS to his state even before the BJP came to power at the Centre. This demand has been placed since BJP and JD(U) were together. Nitish Kumar had also called for a huge rally in Delhi for this reason. However now after both the parties parted way, Nitish has been attacking the center and reminding them of their promise made during the political campaigning for 2014 Lok Sabha elections, that Bihar would get a SCS if the party wins. As of now Bihar does not have a SCS but has been provided with a ‘special package’.
Odisha: In June, 2014 Odisha CM Naveen Patnaik met PM Modi and demanded that his state be granted a SCS. Odisha has a large concentration of SC’s and ST’s, adverse human development index and also high level of poverty.
Jharkhand: The naxal affected, mineral supplier of the country has been demanding to get a SCS for a long time. In 2013, when the BJP was in opposition, it had raised the demand for an SCS to Jharkhand, citing its poverty levels. The Rajan committee report had identified Jharkhand as a ‘backward’ state and so the demand is based on these bases.
Rajasthan: In 2010, the Planning Commission, which was then headed by Congress' Ashok Gehlot, had turned down Rajasthan’s request to grant the state SCS. However, back in the year 2014, the Pradesh Congress Committee from Rajasthan, again urged the finance commission to grant special status to the state citing its unpredictable weather conditions and geographical location. Lack of water supply and largely scattered population with lower incomes were some of the other reason justifying their demand.
Chhattisgarh: In 2014, this state echoed its demand of getting a SCS tag for itself. The state’s commerce and tax minister, Amar Agrawal, met Arun Jaitley, the Finance Minister of India, during the pre-budget meeting. Agrawal cited the Rajan Committee, which mentions Chhattisgarh as a backward state and also National Sample Survey Organization (NSSO) report published in 2013, which mentions that Chhattisgarh had the highest ratio of BPL families. Again in 2015, CM Raman Singh himself sought the SCS for the state.
Apart from SCS, certain states are given special packages through various schemes, one of them being Backward Regions Grant Fund (BRGF). Both Andhra Pradesh and Bihar have been receiving these funds, which is especially allotted to address regional imbalances in development. Between 2006-2009, around Rs 26 crore was sanctioned for Andhra Pradesh and Rs.14.45 crore for Bihar. While Madhya Pradesh got 62.96 crore, Orissa got Rs. 19 crore. This despite the fact that Orissa was identified as the ‘least developed state’, as per the Rajan Committee.