Centre rejects special status for Bihar, Lalu Prasad’s RJD reacts
A state that has been granted special category status is entitled to various tax breaks and increased fiscal support from the federal government for its programs.
On Monday, July 22nd, 2024, the Centre reiterated its stand that Bihar will not be granted special category status, with the Centre rejecting special status for Bihar. This decision, a core demand of its key ally, the Janata Dal (United), prompted the Rashtriya Janata Dal to take a swipe at JDU leader and Bihar Chief Minister Nitish Kumar.
“Earlier, the request of Bihar for Special Category Status was considered by an Inter-Ministerial Group (IMG) which submitted its Report on 30th March 2012. The IMG came to the finding that based on existing NDC criteria, the case for Special Category Status for Bihar is not made out,” the minister said.
Recently, the Nitish Kumar-led JD(U), a significant member of the Narendra Modi-led National Democratic Alliance, approved a resolution calling for the state to be granted special category status, or a special package. Opposition parties like as the RJD are now criticizing Chief Minister Nitish Kumar and calling for his resignation.
The Finance Ministry was questioned by Ramprit Mandal, a JDU MP from Jhanjharpur in Bihar, about the government’s intention to grant special status to Bihar and other economically disadvantaged states in order to spur industrialization and economic growth.
Minister of State for Finance Pankaj Chaudhary responded in writing, stating that “the case for Special Category Status for Bihar is not made out.” A state with special status is guaranteed greater government support to accelerate its development. The Fifth Finance Commission’s 1969 recommendations led to the introduction of the Constitution, which does not grant any state a unique status. Currently a Union Territory, northeastern states, hill states like Himachal Pradesh, and Jammu and Kashmir are among the states that have been granted special status thus far.
In the past, the National Development Council (NDC) awarded several states with a variety of characteristics requiring special consideration the title of “special category” for plan assistance. The federal government claimed that there was insufficient evidence to support Bihar’s claim for this status, citing a 2012 interministerial panel study.
The Special Category Status for plan assistance was granted in the past by the National Development Council (NDC) to some States that were characterized by a number of features necessitating special consideration. These features included (i) hilly and difficult terrain, (ii) low population density and/or sizeable share of tribal population, (iii) strategic location along borders with neighbouring countries, (iv) economic and infrastructural backwardness and (v) non-viable nature of State finances,” the reply stated. “Earlier, the request of Bihar for Special Category Status was considered by an Inter-Ministerial Group (IMG) which submitted its Report on 30th March, 2012. The IMG came to the finding that based on existing NDC criteria, the case for Special Category Status for Bihar is not made out,” it added.
A state that has been granted special category status is entitled to various tax breaks and increased fiscal support from the federal government for its programs. The JDU has long called for Bihar to have a unique status. The Nitish Kumar-led party was expected to press hard for its central demand as the BJP was not able to secure a majority in this election and had to form alliances with the JDU, TDP, and other parties in order to come up with the magic number. Prior to the budget session, during an all-party meeting, the JDU also brought up this issue.
National Democratic Alliance (NDA) ally Lok Janshakti Party MP Shambhavi Choudhary said, “Special Status was a term that existed until the Planning Commission. After the formation of NITI Aayog, nobody was provided anything under Special Category Status but states have definitely received special package that would speed up development.”
A state that has been granted special category status is entitled to various tax breaks and increased fiscal support from the federal government for its programs. The JDU has long called for Bihar to have a unique status. The Nitish Kumar-led party was expected to press hard for its central demand as the BJP was not able to secure a majority in this election and had to form alliances with the JDU, TDP, and other parties in order to come up with the magic number. Prior to the budget session, during an all-party meeting, the JDU also brought up this issue.
Lalu Prasad Yadav’s Rashtriya Janata Dal (RJD) shared the official statement on microblogging site X (formerly Twitter) to take a swipe at the NDA ally.
“Bihar ko nahin milega Vishesh rajya ka darja (Bihar will not get special state status!)” the tweet by the RJD read. “Nitish Kumar and JDU can now comfortably enjoy power at the Centre and continue doing hypocritical politics on ‘special state status’!” the tweet added.
Demand for Special Category Status by JD(U), YSRCP, and BJD
Answering a query from JD(U) member Rampreet Mandal, Chaudhary stated that the current requirements include steep and challenging terrain, a sizable proportion of tribal population or low population density, a strategically located location along borders with neighboring countries, economic and infrastructural backwardness, and the non-viable nature of state finances. He continued by saying that the choice was made after taking into account all of the previously mentioned variables as well as the unique circumstances of each state.
The JD(U), YSRCP, and BJD demanded special category status for Bihar, Andhra Pradesh, and Odisha one day before the session began, on Tuesday, July 23, when finance minister Nirmala Sitharaman will present the Union budget. Jairam Ramesh of the Congress, on the other hand, stated that “strangely, the TDP kept quiet on the matter.”
JDU MP Sanjay Kumar Jha said the demand for a special state status for Bihar has been a priority for the JDU. “Bihar should get the status of a special state, this has been the demand of our party since the beginning. Chief Minister Nitish Kumar has held big rallies for this demand. If the government feels that there is a problem in doing this, then we have demanded a special package for Bihar,” he said, according to a PTI report. With the Centre making it clear that it has no plan to grant a special status, Bihar’s main Opposition RJD has hit out at the JDU, which is ruling the state in alliance with BJP. “Nitish Kumar and JDU leaders must enjoy the fruits of power at the Centre and continue their drama politics on special status,” the RJD said in a post on X.
“Until the 2014-2015 fiscal year, the 11 States with Special Category Status benefited from various advantages and incentives. However, following the dissolution of the Planning Commission and the formation of the NITI Aayog in 2014, the recommendations of the 14th Finance Commission were implemented, leading to the discontinuation of Gadgil Formula-based grants. Instead, the devolution from the divisible pool to all States was increased from 32% to 42%,” the source added.
The administration has, however, previously maintained that the 14th Finance Commission report has eliminated the chance that any additional states will be given the special category status, which entails tax breaks and increased central support for the recipient states.
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