Bihar’s Call for Special Category Status

Santhosh Kumar 29/11/2023
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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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Categories: Decentralisation/Devolution of Powers & Finances, Federalism
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