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A few days ago, there was an interesting event occurred in Bihar on the issue of granting special status to Bihar.


A few days ago, there was an interesting event occurred in Bihar on the issue of granting special status to Bihar. It all started with the release of a report by NITI Aayog in which the state of Bihar was ranked bottom in the list related to human development and growth parameters. After the report was released the opposition party, i.e., the RJD started lamenting and criticizing the current NDA government aiming at the development done by the government led by Chief Minister Nitish Kumar and termed the promise of development done by the current government as “hollow claims”. After the criticism, the issue of special status once again was brought to the present political discourse led by the Chief Minister himself by raising the issue in the house and supported by the senior leaders of JDU like Lalan Singh and the current education minister of Bihar Vijay Kumar Chaudhary. It was interesting to note that there was no reply to the issue by the deputy chief Minister of Bihar Renu Devi who belongs to BJP which is the current ruling party at the centre and is ruling in the state of Bihar with JDU under the NDA coalition.

It is not the first time that this issue was raised by Nitish Kumar, it has been raised many times in past also. The thing that is interesting to note here is the timing and political situation of raising the issue. This time it was raised only after the opposition has found a valid reason to criticize the government, so the intent and interest of Nitish Kumar for the special status to Bihar is under question, whether the CM is taking the issue seriously enough to make it happen like on the mere issue of sharing of one or two seats in the election the coalition falls, but here the question is about the development and future of thousands and lakhs of youths of the Bihar, so we can imagine the seriousness of the issue. Now and then we hear the news of youths of Bihar immigrating to the other part of India seeking jobs and livelihood, it is the greatest testimony to why Bihar deserves the special status as there are not enough industries and other job-producing areas hence there is a deficiency of opportunities and job, lakhs of youths’ future is at stake that’s why it is the need of the hour to grant special status to Bihar. Although the 14th finance commission recommended doing away with the provision’s of special status category for states but even now some states like Andhra Pradesh and Bihar are demanding the special category status. Without the development of Bihar, we cannot imagine the development of India and there will always be two India, i.e., India and Bharat.


The real motive and intention behind this status are to safeguard the interest and aspirations of certain backward states based on certain established criteria or to protect and promote the economic and cultural interests of the tribal people.


Now, we should look at the provisions for granting the special status to states. Currently, 11 states have been granted the special status and 5 more states are demanding the special status. At first, three states (Nagaland, Assam and Jammu & Kashmir) were granted this status but later this was further expanded to 11 states. Special status is granted to the states which fulfil certain criteria and parameters like strategic location along with the international border, lower per capita income, low population density, presence of a sizeable population of tribals, the non-viable status of state finance and economic and infrastructural backwardness.


The special status granted states are given various benefits by the central government:

  1. Exemption on several taxes to attract more industries to the states. A pivotal 30% of the centre’s gross budget is granted to these states. In schemes that are being sponsored by the centre, states under special category get 90% of the grant and 10% as loans which are being exempted from any interest rates, while other states get only 30% of a grant from the central government.
  2. A special status category state attracts more private investment and hence creates more jobs and additional revenue for states. Furthermore, grants from the central government allow these states to build better infrastructure and social sector projects.
  3. States with special category status are exempted from customs duty, corporate tax, income tax and other taxes to attract investment.
  4. States under this category can avail the facility that if they have unspent money in a financial year, it gets to carry forward for the upcoming financial year, while in the case of other states the money unspent from the current financial year cannot carry forward in the next financial year and it gets lapsed.


After having a look at the different criteria and provisions for granting the special status to states, we can say that the state of Bihar deserves special status. According to the latest NITI Aayog report Bihar’s annual per capita income accounts for Rs.50,735, which is more than half of the per capita income at the national level which accounts for Rs.1,34,432. More than 51% of the total population of Bihar is under the poverty line (55.7% in rural Bihar and 43% in urban Bihar). Bihar is also one of the worst floods affected states in India and hence get affected badly from floods every year due to floods caused by the rivers originating in Nepal. Special status will allow the state to get access to a pivotal amount of the Centre’s gross budget and exemptions from certain taxes and excise duty which will attract more private investment in the state and help in establishing more industries as well as creating more opportunities and jobs which will be of great benefit for the youths and the state.

Author(s) Name: Vibhu Bhardwaj (Chanakya National Law University, Patna)

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