If a state is granted a lsquo Special Category Status rsquo 1 The central government pays 100 per ce...........

Indian Polity States

If a state is granted a ‘Special Category Status’,

1. The central government pays 100 per cent of the funds required in a centrally-sponsored scheme to be implemented in the state

2. The state may have a sizeable share of tribal population

Select the correct answer using code given below

1 only

2 only

Both 1 and 2 only

None of the above

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Explanation:

The concept of a special category state was first introduced in 1969 when the 5th Finance Commission sought to provide certain disadvantaged states with preferential treatment in the form of central assistance and tax breaks.
The rationale for special status is that certain states, because of inherent features, have a low resource base and cannot mobilize resources for development. Some of the features required for special status are: (i) hilly and difficult terrain; (ii) low population density or sizeable share of tribal population; (iii) strategic location along borders with neighbouring countries; (iv) economic and infrastructural backwardness; and (v) non-viable nature of state finances.
The Centre pays 90 per cent of the funds required in a centrally-sponsored scheme to special category status category states as against 60 per cent in case of normal category states, while the remaining funds are provided by the state governments