Special status to Bihar, Andhra Pradesh may open ‘Pandora’s box’: Experts | Economy & Policy News

Special Category Status for plan assistance was granted in the past by the National Development Council to the states that were characterised by a number of disadvantages necessitating special consideration. These disadvantages included hilly and difficult terrain; low population density and/or sizeable share of tribal population; strategic location along borders with neighbouring countries; economic and infrastructural backwardness; and non-viable nature of state finances. Special category status was granted based on an integrated consideration of these criteria. However, the distinction among states was done away with starting the Fourteenth Finance Commission, and abolition of the Planning Commission by the Narendra Modi government.

“Any state that is relatively poor and has special requirements may ask for it. If many states ask for it, and if the government wants to make a systematic arrangement, then the matter should be handed over to the Niti Aayog and it may be given some special window to finance such states through some criteria,” said DK Srivastava, chief policy adviser, EY India, and member, 15th Finance Commission.    

 

M Govinda Rao, member of the 14th Finance Commission said the fiscal burden on the Centre because of granting special category status would depend on the contours of the package that the central government was going to give. “Other states such as Jharkhand may also start demanding similar treatment. It will open a Pandora’s box.”

 

The issue has also taken a political dimension with the Congress-led Indian National Developmental Inclusive Alliance (INDIA) wooing TDP. “On Feb 14 2014, Prime Minister Dr Manmohan Singh pledged special category status to the new state of Andhra Pradesh for 5 years. BJP leader Venkaiah Naidu countered by saying BJP, if elected to power, will extend it for 10 years. Two months later, Narendra Modi, in the holy city of Tirupati, repeated the promise. For the past 10 years, the outgoing Modi Sarkar did nothing. The Indian National Congress has in its 2024 election manifesto pledged to declare special category status to Andhra Pradesh as promised by Dr Manmohan Singh. This is our guarantee,” Congress leader Jairam Ramesh posted on social media platform X on June 4.

 

In response to a question on special category status to Bihar in March 2023, the finance ministry said: “Earlier, the request of Bihar for Special Category Status was considered by an Inter-Ministerial Group (IMG) which submitted its Report on 30 March, 2012. The IMG came to a finding that based on existing NDC criteria, the case for Special Category Status for Bihar is not made out.”

 

Rao said questions remained over the advantage that would entail to the states even if they were to receive the special category status. “Now, the only advantage they have is in regard to the centrally sponsored schemes where they will get a 90-10 ratio rather than 60-40. First of all, these states don’t qualify the conceptual definition of special category state that was followed in the past. They will have to change the criteria. However, there is no need for any constitutional amendment to assign special category status to a state. It can be done through a Cabinet resolution,” he added.

The criteria

 

Disadvantages listed for granting special category status 

 

> Hilly, difficult terrain

> Low population density and/or sizeable share of tribal population

> Strategic location along borders

> Economic, infrastructural backwardness

> Non-viable nature of state finances

First Published: Jun 06 2024 | 11:18 PM IST