Explanation:

In a special category state, the Centre-state funding of centrally-sponsored schemes is split in the ratio of 90:10, much more favourable than the 60:40 or 80:20 splits in other (non-SCS) states.

• The Constitution does not provide for any state to receive special treatment compared to others.
• However, for a range of reasons including historical disadvantage, difficult or hilly terrain, nature of population (low density or a large share of tribals), strategic location along the border, economic or infrastructural backwardness, etc., the Centre has over the decades extended special assistance to some states.
• From 1969 onward, a body called the National Development Council (NDC) — which used to be a part of the now defunct Planning Commission of India — recommended SCS status for 11 states: eight from the Northeast, Jammu and Kashmir, Himachal Pradesh, and Uttarakhand.
• After the government accepted the recommendations of the Fourteenth Finance Commission in 2015, however, the concept of SCS effectively disappeared.
• The NITI Aayog, which has replaced the Planning Commission, has no power to allocate funds — and therefore, the discretion that the ruling party at the Centre had to dole out special favours to states through the Plan panel, no longer exists.
• States such as Bihar, Odisha, and Jharkhand have, however, persisted with the demand. Andhra Pradesh too has claimed SCS.

Hence only statement 2nd is correct.