McqMate
| Q. |
What is the implication of the Central Government granting "Special Status" to a State? |
| A. | Substantially large percentage of the central assistance will be as grantsin-aid |
| B. | The extent of loan as a percentage of total assistance will be low |
| C. | Current account budgetary deficit will be bridged by the Central Government |
| D. | Both (1) and (2) above |
| Answer» D. Both (1) and (2) above | |
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Explanation: The Special category states category is meant for a specific category such as a hilly terrain and geographically difficult area where supply of public services is difficult. The National Development Council and not the Central government decides on the special category classification for states. At present, there are 11 States that have been granted special status, including Jammu and Kashmir and the seven North-Eastern States. Some of these States get some tax concessions for setting up industry. The method of budgetary allocation is also different for special category States and non- special ones. Under the existing formulae, one- third of the gross budgetary support goes to special States and the remaining to other States. In addition, special status States get 90 per cent of resources under the grant and remaining 10 per cent as loan, while non-special ones get 70per cent of the resources as loan and remaining 30 per cent as grant. |
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