What's special about the special status Bihar is seeking?

The Bihar Cabinet, under Chief Minister Nitish Kumar's leadership, made a significant move on Wednesday, November 22, by passing a resolution advocating for Bihar's long-pending demand for Special Category Status (SCS), as reported by India Today.

Chief Minister Nitish Kumar urged the Central government via his social media handle, stating, "I request the Central government to promptly grant Special State status to Bihar, considering the welfare of the people."

"This demand has been consistently voiced since 2010. Notably, rallies were organized on November 24, 2012, at Gandhi Maidan in Patna, and on March 17, 2013, at Ramlila Maidan in Delhi," he further added.

Opposition's opposition

• The BJP-led Opposition has criticised the Mahagathbandhan Government and CM Nitish Kumar's stance.
• Rajya Sabha MP Sushil Kumar Modi dismissed it as "nothing but a political stunt." He pointed to instances in the past when the Janata Dal (United) led by Nitish Kumar and Lalu Prasad Yadav's Rashtriya Janata Dal (RJD), despite being part of different Central Governments, failed to achieve this status.
• This insinuation implied that the Mahagathbandhan government, composed of JD(U), RJD, the Indian National Congress, and a few left parties, was futilely pursuing an unattainable goal.

Nevertheless, the Bihar Government remains resolute in linking this demand to the recently unveiled Caste Census, seeking this tag to uplift the socio-economic status of one of India's most backward states.

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SCS today

• When discussing the SCS, the Union Finance Ministry, earlier this year, rejected demands for "Special Category Status" for any state.
• They cited the 14th Finance Commission's clear stance against such classification.
• As a result, the decision was met with discontent from states like Odisha, Bihar, and Andhra Pradesh, all advocating for SCS to address their unique challenges.
• The step aimed to discourage other states from making similar demands, avoiding additional burdens on the centre's finances.

What is the tag though?

• The SCS was originally devised by the Centre to aid states facing geographical and socio-economic challenges.
• The tag was initially proposed based on the Gadgil Formula following the Fifth Finance Commission's recommendations in 1969.
• Jammu and Kashmir (then a state), Assam and Nagaland were the first states to receive this status.
• Subsequently, 11 more states, including Telangana, were granted this recognition.
• However, the 14th Finance Commission proposed discontinuing this status for all states except those in the Northeast and a few hill states, following the dissolution of the Planning Commission in 2014.

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Criteria

• The classification was based on factors like hilly terrain, low population density, significant tribal population, strategic border location, economic and infrastructure backwardness, and nonviable state finances.

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Advantages

• The Central Government used to cover 90% of funding in centrally-sponsored schemes, which are schemes funded by the centre and implemented by the state.
• Unutilised funds in a financial year could be carried forward, ensuring a sustained flow of finances for developmental projects to the states.
• The Center also offered concessions in excise, customs duties, income tax and corporate tax to the SCS states.
• Additionally, the SCS states were entitled to a 30% share of the Centre's Gross Budget.

While the Constitution does not provide for any Special Category Status, a few articles of the Constitution mandate the 'state' to confer some safeguards for some states, Bihar, not being one of them.

Therefore, in CM Nitish Kumar's words, the Bihar government, in order to implement the schemes it prepared in its interests "needs an amount of approximately Rs 2.50 lakh crore."

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