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Bihar’s Call for Special Category Status

Bihar’s Call for Special Category Status mind map
Bihar Cabinet Resolution
Date
November 2023
Chief Minister
Nitish Kumar
Objective
Seeking Special Category Status
Basis for Demand
Bihar Caste-based Survey, 2022
Indicated significant poverty
Special Category Status (SCS)
Introduction
Introduced in 1969
Based on Fifth Finance Commission recommendations
Initially for Jammu and Kashmir, Assam, Nagaland
Criteria for Granting SCS
Hilly and difficult terrain
Low population density
Sizeable tribal population
Strategic location along borders
Economic and infrastructural backwardness
Non-viable state finances
Difference from Special Status
Granted by National Development Council
Not enshrined in the Constitution
Focus on economic and financial aspects
Benefits of SCS
90% Central funding for schemes
Carrying forward unspent funds
Tax concessions
Excise, customs, income, corporate taxes
30% of total federal budget allocation
Debt reduction programs
Investment incentives
States with SCS
Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand, Telangana
Historical Evolution
Gadgil Formula
Inclusion of more states over years
Bihar’s Justification for SCS
Economic Backwardness
Low per-capita GDP
High poverty rate
Impact of State Bifurcation
Industrial decline post-Jharkhand creation
Natural Challenges
Regular floods and droughts
Welfare Funding Need
Targeting ₹2.5 lakh crore for welfare measures
Lack of Resources
Absence of natural resources
Inadequate water supply for irrigation
Comparison with Other States
Andhra Pradesh, Odisha demands
Criteria Met
Meets most SCS criteria
Lacks hilly terrain
Raghuram Rajan Committee (2013)
Suggested multi-dimensional index for funding
Bihar in “least developed category”
Challenges and Perspectives
Central State Financial Relations
Impact on competitive federalism
Additional Economic Burden
Increased devolution from Centre
Alternative Solutions
Exploring funding models
Addressing socioeconomic issues

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