Eleven economically backward hill states of India sharing international boundaries comprise the group of aSpecial Category Statesa. These states are Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. Lacking severely in economic resources and being geographically isolated from the rest of the country, they suffer from various drawbacks. Economic growth of many of them have also been stymied by prolonged phases of violent militancy. To address their problems, they have been awarded the aSpecial Categorya status by the Centre, an extra-Constitutional arrangement that gives them access to liberal Central plan assistance. Objective assessment of the impact of such assistance has never been made in the public domain. Under the existing arrangements of which the accountability structure is very weak, these states will permanently remain aspecial category statesa, irrespective of their fiscal, financial and socio-economic performance. Now that fresh demands are being raised by some states for this status, these issues are assuming increasing importance. In this book, Bhattacharjee explores the reality of the special category states, going down to the roots of their backwardness and examining these in the context of asymmetric federalism. He evaluates their socio-economic progress as well as public financial management ever since the status was first awarded in 1969 by analysing stupendous amounts of data that he has meticulously collected and presented in this book.