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Benifits of “SPECIAL CATEGORY STATUS”
•Significant concession in excise & customs duties, income tax and corporate tax
•30 percent of planned expenditure (central budget) goes to ‘special category’ states
•Special Category states are benefited because of Normal Central Assistance which was skewed in favour of these states. These states get more funds in terms of NCA and most part of these funds was in the form of grants rather than loans.
•Special Central Assistance given to SCS is also an additional amount which can be used by the concerned state for economic development.
•Centre bears 90% of the state expenditure (given as grant) on all centrally-sponsored schemes and external aid while rest 10% is given as loan to state. For general category, the respective grant to loan ratio is 30:70 where as external aid is passed on in the same ratio as received at the centre.
•Unspent money does not lapse and gets carry forward.