In a blow to the Bharatiya Janata Party (BJP), the Telugu Desam Party (TDP) broke ties with the NDA on Friday, 16 March, in the backdrop of the Centre’s refusal to grant special category status to the state.
Before you dive into the political ramifications of the TDP pulling out of the NDA, and their decision to move a no-confidence motion against the Narendra Modi government, here is a quick run-through on what ‘special category status’ really is.
The issue of Special Category Status was brought in through the Gadgil Formula in April 1969, according to a Factly report.
The Gadgil Forumla, now revised to Gadgil Mukherjee Formula, is used for allocation of funds to states by the Centre.
The Central government provides financial assistance to states in three manners:
Apart from this, the Centre also grants funds via Centrally Sponsored Schemes, which are funds extended to state governments to achieve some national goals.
The Gadgil Mukherjee Formula takes into consideration population (60%), per capita income (25%), fiscal performance (7.5%) and special problems (7.5%).
In 1969, when the Gadgil Formula came into being, three of the then 17 states were accorded a special status.