Will Bihar and Andhra get special state status under the pressure of the alliance? Nitish-Chandrababu are batting

Ananya Shroff
4 Min Read

New Delhi : The issue of granting special status to the states has heated up again due to the resolution passed in the National Executive of JDU, an ally in the NDA government. Many states including Bihar, Odisha and Andhra Pradesh have been demanding special status for a long time citing backwardness, high tribal population and low revenue. The 14th Finance Commission had long ago advised that no state should be included in this category and till the last term, the Modi government was also rejecting the demand citing this, but now it is dependent on the support of JDU and Andhra's TDP, in such a situation the issue of special status has become complicated, because on this issue, Andhra's current CM Chandrababu Naidu had separated from NDA in 2018.

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What is the special category?
The story of special state status began in the second decade after independence, when the central government felt that some states lagging behind in the race of development would have to be supported. Special state status was arranged on the formula of Planning Commission Deputy Chairman DR Gadgil. In this, hilly states, states with large tribal population, border states, economically and infrastructure backward states and such states were considered which cannot arrange enough revenue for themselves. Initially, Jammu and Kashmir, Assam and Nagaland got this status. At present, 11 states including Uttarakhand, Arunachal, Himachal, Sikkim, Manipur, Meghalaya, Mizoram and Tripura are in this list.

What is the benefit?
States with special category get more financial help from the Centre. In these states, the Centre gives 90% of the funds for central schemes and only 10% of the funds have to be given by the state. The remaining amount can be used in the next year as well. In other states, this ratio is 60:40. States with special category also get separate help in some projects. The 14th Finance Commission had advised that no more states should be added to the special category list. The Centre keeps citing this advice.

What do economists say?
Dr. Sarathi Acharya, senior economist of the Institute of Human Development, says, 'The governance in Bihar has not been good for the last 3 decades. Unless the governance system improves, giving special status or special package will not solve the problem. As far as Andhra Pradesh is concerned, it used to get the maximum revenue from Hyderabad and it has lagged behind in this, so it needs special status.' At the same time, senior economist Abhijit Mukhopadhyay says, 'The demand of Bihar, Bengal or Odisha is justified on the parameters of socio-economic development. Andhra is not backward. Telangana needs more help after the division. There will not be much financial burden on the Center because tax revenue is increasing at a record pace. Anyway, if a state is lagging behind, it is the responsibility of the Center to help because it is the guardian of all.'

Special package options
Bengal, Odisha, Rajasthan, Chhattisgarh and Telangana are also demanding special status. Now, seeing the pressure of the alliance, the Modi government can find a middle way through a special package, as JDU has indicated this by talking about special status or special package in its proposal. TDP is also focusing on special package instead of special status. Because it needs a large amount of money soon to fulfill its election promises.

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