1. Preference in Normal Central Assistance (NCA)
Special Category states are profited as a result of Normal Central Assistance which was skewed for these states. These states get more supports regarding NCA and most piece of these assets was as awards instead of credits
2. Expenditure Pattern for the state
The special status will change the expenditure pattern in the arrangement of infrastructure creation for micro, small, medium and large scale industries.
3. Reduced Prices
With the tax discounts available for goods produced, the people of the state might get certain goods and commodities at lesser prices.
4. Help in development deficit
Furthermore grants from center helps in building state infrastructure and social sector projects. As a result, special-category state gets to bridge its development deficit.
5. Tax concession
Significant concession in excise & customs duties, income tax and corporate tax. 30 percent of planned expenditure (central budget) goes to ‘special category’ states
6. Special Central Assistance
Special Central Assistance given to SCS is also an additional amount which can be used by the concerned state for economic development.
Special Category Status should not be limited to the specific parameter and should rather contemplate the economic and social backwardness of the area and the people of that state. The allocation of budget and the percentage of taxes upon it can be way more functional if utilized virtuously. Places which are larger in terms of area but exploited inherently end up with no way to go.
90% of grants will be given by the Central and the remaining 10% is given as a loan. The better percentage in taxes, grants and loans will be available. To the states without special status, the center does not give grants more than 30%. Manufacturing and industrial ecosystem will increase due to SCS as there will be significant tax redemption, incentives, huge Industrial discount, and reimbursement. Industrial units will get 100% excise duty tax exemption along with Income Tax exemption. Fright reimbursement is also been provided. 30% discount will be given on the expenditure on plants and machinery. Along with newly-established industries, this will also apply to those industries which were established before the announcement of special status but are extending their establishment now. 3% discount will be given on interest on working capital for the establishment of industries. 50% discount will apply on power charges of the industries for not less than 20 years.
For more information, visit http://ggiandhra.com/the-hunt-for-the-special-category-status-chapter-1/