Modi Government Rejects Nitish Kumar’s Special Status Demand for Bihar; Lalu Yadav’s RJD Criticizes JD(U)

Narendra Modi Government Rejects Nitish Kumar’s Special Status Demand for Bihar, Citing 2012 Report, Despite Pressure from BJP Allies.

Prime Minister Narendra Modi’s government has rejected ally CM Nitish Kumar’s demand for Special Category Status for Bihar. On the eve of Budget 2024, the government referred to a 2012 inter-ministerial group report to argue that Bihar does not qualify for this status.

This decision comes a day after BJP’s allies from Bihar pushed for the special status for the state. Notably, Janata Dal (United) is an NDA ally of the BJP at the Centre.

In a written reply in the Lok Sabha on the first day of the Monsoon session, Minister of State for Finance Pankaj Chaudhary stated that ‘the case for Special Category Status for Bihar is not made out.

Earlier, Bihar’s request for Special Category Status was reviewed by an Inter-Ministerial Group (IMG), which submitted its report on March 30, 2012. The IMG concluded that, based on existing NDC criteria, Bihar does not qualify for Special Category Status,” the minister said.

Lalu Prasad Yadav’s Rashtriya Janata Dal (RJD) shared the official statement on the microblogging site X (formerly Twitter) to take a dig at the NDA ally.

‘Bihar will not get special state status!’ read the tweet by the RJD. ‘Nitish Kumar and JDU can now comfortably enjoy power at the Centre and continue their hypocritical politics on ‘special state status’!’ the tweet added.

"बिहार को नहीं मिलेगा विशेष राज्य का दर्जा!"
– संसद में मोदी सरकार।

नीतीश कुमार और JDU वाले अब आराम से केंद्र में सत्ता का रसास्वादन करते हुए 'विशेष राज्य के दर्जे' पर ढोंग की राजनीति करते रहें! pic.twitter.com/lpd8oIKEda

— Rashtriya Janata Dal (@RJDforIndia) July 22, 2024

NDA ally Lok Janshakti Party (RV) MP Shambhavi Choudhary said, ‘Special Status was a term that existed until the Planning Commission. After the formation of NITI Aayog, no state has been granted Special Category Status, but states have received special packages to speed up development.’

‘It is our demand, and we will continue to demand it. We have high hopes for the upcoming Budget. Given how strongly Bihar has supported the NDA, we expect the NDA to stand strong with Bihar in the future, and that Bihar will receive a special package,’ Shambhavi Choudhary added.

Special Category Status for states in India is granted based on specific criteria set by the National Development Council (NDC). States that have been granted this status typically exhibit the following features:

1. Hilly Terrain: States with challenging geographical conditions that hinder development.
2. Low Population Density and/or Large Population of Tribes: Regions with sparse populations or a significant tribal population.
3. Strategic Location along Borders with Neighboring Countries: States that share international borders, making them strategically important.
4. Economic and Infrastructure Backwardness: States with underdeveloped infrastructure and poor economic indicators.
5. Non-viable State Finances: States that face severe financial challenges and require additional support to manage their finances.

States with Special Category Status receive preferential treatment in federal assistance and tax breaks, which can include:

• Higher Central Assistance for Plan Expenditure: A larger share of central funds for various developmental projects.
• Tax Benefits: Concessions and exemptions in various central taxes.
• Special Grants and Subsidies: Additional financial aid for specific sectors like agriculture, education, and healthcare.

This status was originally granted by the NDC, but since the establishment of NITI Aayog in place of the Planning Commission, no new states have been accorded this status. Instead, states may receive special packages tailored to their specific needs.

Special Category Status in India has been granted to states based on several criteria, including:

• Hilly and Difficult Terrain
• Low Population Density
• Sizeable Share of Tribal Population
• Strategic Location along Borders with Neighboring Countries
• Economic and Infrastructural Backwardness
• Non-viable Nature of State Finances

Currently, the following 11 states have been granted Special Category Status:

• Arunachal Pradesh
• Assam
• Himachal Pradesh
• Jammu & Kashmir
• Manipur
• Meghalaya
• Mizoram
• Nagaland
• Sikkim
• Tripura
• Uttarakhand

The Modi government rejected Special Category Status for Bihar for several reasons:

In 2012, during the Congress-led UPA administration, a proposal was made to grant Bihar Special Category Status. However, it was determined that Bihar, under Nitish Kumar’s leadership at the time, did not meet the criteria for this status.

Additionally, the government has argued that the 14th Finance Commission report has ruled out the possibility of granting Special Category Status to any more states. This status would typically include tax relief and increased central funding, but the report does not support extending these benefits further.