• UGI USER
  • Nov 27, 2023
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BIHAR’S DEMAND FOR SPECIAL CATEGORY STATUS

Why in the News?

  • Chief Minister Nitish Kumar-led Cabinet passed a resolution seeking Special Category Status (SCS) for Bihar.
  • Grounded in findings from the “Bihar Caste-based Survey, 2022,” highlighting poverty concerns.
Source: UGI

Special Category Status (SCS) Definition:

  • Classification by the Centre to aid development in States facing

geographical or socio-economic disadvantages.

  • Introduced in 1969, considering factors like terrain, population density, tribal share, location, economic backwardness, and state finances viability.

Historical SCS Beneficiaries:

  • Initially granted to Jammu & Kashmir, Assam, and Nagaland in 1969.
  • Later extended to Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.

Benefits Attached to SCS:

  • Previously received grants based on Gadgil-Mukherjee formula (30% central assistance).
  • Post-Planning Commission abolition, increased devolution for all States (41% in 15th FC).
  • Favourable Centre-State funding ratio (90:10) for centrally sponsored schemes.
  • Additional incentives like concessions in customs and excise duties, income tax, and corporate tax rates.

Reasons for Bihar’s Demand:

  • Lack of natural resources, water supply for irrigation, floods in the north, and severe droughts in the south contribute to poverty and backwardness.
  • Industrial shift due to bifurcation led to unemployment and reduced investment opportunities.
  • Bihar’s per-capita GDP of around ₹54,000 underscores its consistent status as one of the poorest states.