GS Paper 2
Syllabus: Indian polity- Issues and challenges pertaining to the federal structure.
Source: TH
Context: Bihar Chief Minister Nitish Kumar’s Cabinet passed a resolution seeking Special Category Status (SCS) for Bihar, following findings from the “Bihar Caste-based Survey, 2022,” indicating significant poverty.
What is Special Category Status (SCS)?
It is a special recognition that functions as a provision for the betterment and protection of the people of backward regions. It is a classification given by the Centre to assist in the development of those states that face geographical and socio-economic disadvantages.
Special Category Status:
- It was introduced in 1969 on the recommendations of the Fifth Finance Commission. Status was first accorded to Jammu and Kashmir, Assam and Nagaland in 1969
- Articles 371 to 371-J in Part XXI of the constitution contain special provisions for twelve states namely Maharashtra, Gujarat, Nagaland, Assam, Manipur, Andhra Pradesh, Telangana, Sikkim, Mizoram, Arunachal Pradesh, Goa and Karnataka.
- Telangana, the newest State of India, was accorded the status as it was carved out of another State – Andhra Pradesh
Criteria for SCS (considered before granting):
- Hilly and difficult terrain.
- Low population density or a sizeable share of tribal population.
- Strategic location along international borders.
- Economic and infrastructural backwardness.
- Non-viable nature of state finances.
Difference between Special Status VS Special Category Status:
| Aspect | Special Status | Special Category Status |
| Granting Authority | Provided through an Act | Granted by the National Development Council, an administrative body of the government. |
| Example | Jammu and Kashmir enjoyed special status under Article 370 before 2019 | North-East states enjoy special category status |
| Applicability | Special status is subject to constitutional provisions, and it can be altered or revoked through constitutional amendments. | Special category status is typically not enshrined in the constitution, making it less rigid and more subject to administrative decisions. |
| Provisions for States | Applicable to states listed under specific Articles such as Articles 371, 371-A to 371-H, and 371-J. | Primarily applicable to states facing geographical or socio-economic disadvantages, based on criteria set by the National Development Council. |
| Focus of Empowerment | Empowers legislative and political rights. | Primarily deals with economic, administrative, and financial aspects, offering fiscal benefits and assistance in development projects. |
Benefits associated with the Special Category Status:
- Centre’s support:
- Under this status, the government pays 90% of the funds in schemes that the Centre sponsors.
- Regular states get 60-75% of the funds from the Centre under the same schemes and they have to manage the rest.
- In case of unspent money, the states with SCS have the provision to carry it forward.
- These states also enjoy a significant concession on excise, customs duties, income tax, and corporate tax.
- Under this status, the government pays 90% of the funds in schemes that the Centre sponsors.
- Objectives met:
- The recognition essentially benefits certain backward states having hilly terrains, strategic international borders, and economic and infrastructural backwardness.
- The key objectives are:
- To meet the aspirations of the people of backward regions of the states
- To protect the cultural and economic interests of the tribal people of the states
- To deal with the disturbed law and order condition in some parts of the states
- To protect the interests of the local people of the states
Why Bihar is Demanding SCS:
| Factors | Details |
| Economic Backwardness | About one-third of Bihar’s population lives in poverty. The state has a low per-capita GDP of around ₹54,000, marking it as one of India’s poorest states. |
| Impact of Bifurcation | Bihar’s bifurcation led to industrial decline, with many industries moving to Jharkhand, resulting in fewer employment opportunities. |
| Natural Challenges | The state faces regular floods in the north and droughts in the south, impacting agriculture and livelihoods. |
| Need for Welfare Funding | Bihar’s Chief Minister highlighted the need for SCS to secure approximately ₹2.5 lakh crore for various welfare measures over five years. |
| Lack of Resources | Bihar argues its lack of natural resources and continuous water supply for irrigation contributes to its underdevelopment. |
| Other States’ Demands | States like Andhra Pradesh and Odisha also want SCS. Andhra Pradesh cites revenue loss after bifurcation, and Odisha points to natural disasters and a large tribal population (nearly 22%). However, the Central government, referring to the 14th FC report, has consistently rejected their requests, stating that no state should receive this status. |
Is Bihar’s Demand Justified?
- Criteria Met: Bihar meets most SCS criteria, but lacks hilly terrain and geographically difficult areas, crucial for infrastructural development.
- Raghuram Rajan Committee (2013): Placed Bihar in the “least developed category” and suggested a new methodology based on a ‘multi-dimensional index’ for fund allocation, which can be revisited for addressing socio-economic backwardness.
Concerns
- The SCS puts an additional economic burden when the increased devolutionis already flowing to the State as recommended by the FFC.
- It affects the central state’s financial relations and hinders competitive federalism among the states.
Conclusion:
Bihar, despite meeting most criteria, lacks hilly terrain, raising the need for revisiting standards. Also, Raghuram Rajan Committee suggested exploring alternative funding models based on a multi-dimensional index. Addressing Bihar’s needs requires urgent support for poverty alleviation, targeted aid for disaster management and agriculture, and policies to attract industries and generate employment. Providing SCS status can be one of the solution, however, it needs to be explored without straining central finances and upholding competitive federalism.
Insta Links:
