Odisha and Bihar have recently raised a demand for a Special Category Status In this context conside...........

Indian Political System(PCS) Centre - State Relations

Odisha and Bihar have recently raised a demand for a Special Category Status. In this context, consider the following statements:

1. The Constitution does not have any provision for categorization of any state as a Special category Status State.

2. The decision to grant Special category Status to a state lies with the Finance Commission.

3. Significant 30% of the Centre’s gross budget goes to the Special category state.

Which of the above statements is/are correct?

1 only

1 and 3 only

2 and 3 only

1, 2 and 3

1 and 3 only

The Indian Constitution does not provide for the categorization of any state as a Special Category Status (SCS) State.
Special category states receive preferential treatment and tax benefits due to certain disadvantages they face.
This concept was introduced by the fifth Planning Commission in 1969.
The decision to grant SCS is made by the National Development Council, chaired by the Prime Minister.
Normal Central Assistance, the primary aid for state plans, is divided to favor special category states, with 11 states receiving 30% of the total assistance while the remaining states share the rest.
For special category states, 90% of the assistance is in grants and 10% in loans, while for other states, the ratio is 30:70 between grants and loans.
Beyond additional plan resources, these states enjoy concessions in excise and customs duties, income tax rates, and corporate tax rates as determined by the government.