Step 1: Understanding Article 370.
Article 370 of the Indian Constitution acknowledges the special status of the state of Jammu and Kashmir, granting it autonomy in many matters, including the ability to create laws for its permanent residents.
Step 2: Historical Context.
Article 370 was included in the Constitution to reflect the unique circumstances of Jammu and Kashmir’s accession to India, allowing the state to have its own constitution and laws in many areas, except defense, communications, finance, and foreign affairs.
Step 3: Conclusion.
Therefore, the correct answer is (2), as Article 370 acknowledges the special status of Jammu and Kashmir.