NE states are 'super special', getting 100% grants from Centre: Singh

All eight Northeastern states have started getting central funds as 100 percent grant, which is more than what a special category state is given, Union Minister Jitendra Singh said on Thursday. According to the norms, special category states are given central funds in the manner of 90 percent grants and 10 percent loans, while the ratio between grants and loans is 30:70 for other states.

"A cabinet decision has been taken in December 2017 to provide 100 percent funds to the Northeastern states as grants. The decision has come into effect from March 2018. From the special category states, they have become super special category status," Singh, the Union Minister for Development of North Eastern Region (DoNER), told reporters here. The Northeastern states are Assam, Arunachal Pradesh, Meghalaya, Nagaland, Manipur, Mizoram, Tripura, and Sikkim.

"The decision to give 100 percent funds as grants were taken as the states have not been able to repay even the 10 percent share of loan," Singh said. The Telugu Desam Party, which was ruling the Andhra Pradesh, had snapped ties with the BJP and withdrew its ministers from the Modi government in March 2018 as the party's demand for special category status was rejected by the central government citing limitations set by the 14th Finance Commission recommendations.

The BJP ally JD-U, headed by Bihar Chief Minister Nitish Kumar, has long been demanding the special category status to the state. Uttarakhand and Himachal Pradesh are special category states.

Jammu and Kashmir, which was also a special category state, will henceforth get all funds from the central government as the state has been bifurcated and turned into two Union Territories. The special category status was granted in the past by the National Development Council on the recommendations of the erstwhile Planning Commission to states that needed special consideration.

The features include: (i) hilly and difficult terrain (ii) low population density and or a sizeable tribal population (iii) strategic location (iv) economic backwardness and (v) non-viable nature of state finances. The special category states also get excise duty concessions and other tax breaks to attract industry to their territory. The state share in centrally-sponsored schemes is also lower, compared to general category states, an official said.