The Centre has reaffirmed its position that Bihar will not receive special category status. The JD(U), led by Nitish Kumar and a key member of the NDA, recently passed a resolution requesting special category status or a special package for the state. Opposition parties like the RJD are now criticizing Chief Minister Nitish Kumar and calling for his resignation.
In the past, the National Development Council (NDC) granted ‘special category’ status for plan assistance to certain states with unique characteristics that require special attention. Referring to a report from an inter-ministerial group in 2012, the central government stated that the current factors do not justify granting special category status to Bihar.
“The decision was made after considering all factors and the specific circumstances of the state. Previously, an inter-ministerial group (IMG) reviewed Bihar’s request for special category status and concluded in its report on March 30, 2012 that the state does not meet the criteria for such status,” Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha during the first day of the monsoon session.
In response to a query posed by JD(U) member Rampreet Mandal, Chaudhary explained that the current criteria encompass rugged and challenging terrain, low population density or a significant tribal population, strategic positioning along borders with neighboring nations, economic and infrastructural underdevelopment, and the non-viability of state finances. He emphasized that the decision was made after a comprehensive evaluation of all the aforementioned factors and the unique circumstances of a state.
Previously, the government has maintained that the 14th Finance Commission report has dismissed the possibility of additional states being designated special category status, which entails tax exemptions and increased central funding for the recipient states.
A day prior to the commencement of the session, during which finance minister Nirmala Sitharaman is scheduled to present the Union budget on Tuesday (July 23), the JD(U), YSRCP, and BJD called for special category status for Bihar, Andhra Pradesh, and Odisha, respectively. Meanwhile, Jairam Ramesh of the Congress remarked that “curiously, the TDP remained silent on the issue.”
The ruling NDA and the opposition INDIA bloc both called for special category status for Bihar during an all-party meeting. BJP allies Sanjay Kumar Jha of the JD (U) and Union minister Chirag Paswan of the LJP (Ram Vilas) also supported this demand. The RJD also expressed their support for this. Jha suggested that a special financial package could be considered if special status is not feasible.
‘CONSTITUTION DOESN’T PROVIDE FOR SUCH CATEGORISATION’
Amit Malviya, a senior BJP leader, stated that the Constitution of India does not allow for the granting of special category status to additional states. He explained that the 14th Finance Commission eliminated the distinction between general and special category states in 2015, but increased the share of net taxes for states from 32 to 42 percent for the period 2015-2020. The 15th Finance Commission maintained this rate at 41 percent for the periods 2020-2021 and 2021-2026, with a 1 percent adjustment due to the creation of the Union Territory of Jammu & Kashmir.
This adjustment aimed to address the resource gap of each state through tax devolution, with Post-Devolution Revenue Deficit Grants provided where tax devolution alone could not cover the assessed gap. Additionally, he mentioned that the special category status and the Gadgil Committee formula-based grants were discontinued after 2015. Bihar Congress chief and MP Akhilesh Prasad Singh urged the Government of India to consider amending the provisions to grant Special Status for Bihar, stating that the issue has been raised by Nitish Kumar since he became the CM.
Singh also addressed RJD chief Lalu Yadav’s request for Kumar’s resignation, stating, “The demand for Special Status has been ongoing since 2005, when he first became the CM. He brings up this issue in every meeting. It has been almost 20 years of his Chief Ministership. Therefore, the people of Bihar should not be deceived. This demand should be addressed as soon as possible.” In the meantime, JD(U) MP Devesh Chandra Thakur commented, “The demand for special status will continue in the future as well… The central government needs to consider how the state will develop and how we will attract investment.”