2. Special Category Status is a classification that allows states to get significant level
of resources necessary for development.
This includes a change in the way funds are allocated to the states for planned
development.
Under Special Category Status, a state will typically receive 90% of funds as grants and
10% as loans in the Centrally Sponsored Schemes (CSS). In contrast, other states
typically receive 30% funds as loans and 70% as grants. There could be variations
based on the scheme.
3. Of the 28 states in India, 11 states have been accorded Special Category Status
Arunachal Pradesh Assam Manipur Meghalaya
Mizoram Nagaland Sikkim Tripura
Jammu & Kashmir Himachal Pradesh Uttarakhand
BIHAR IS DEMANDING SPECIAL CATEGORY STATUS
TO EMERGE OUT OF POVERTY AND INFRASTRUCTURAL BACKWARDNESS
4. Criteria for Special Category Status
Ministry of Commerce & Industry Planning Commission
1. Hilly & difficult terrain
1. Geographical isolation 2. Low population density
2. Inaccessible terrain 3. Strategic location along the borders with
3. Poor resource base neighboring countries
4. Remoteness to larger market 4. Economic and infrastructural
5. Poor infrastructure backwardness
5. Non-viable nature of state finance
Conceptually, a state under special category has a low resource base that makes indigenous
development improbable. Also, such a state is strategically located mandating a sustained level of
development. Special Category Status is accorded by National Development Council.
5. Demand of Special Category Status for Bihar has two components
1. Changing the formula of cost sharing in Centrally Sponsored Schemes (CSS) such that share
of the state is limited to 10% instead of 70% (as in most schemes).
This will enable higher resource availability and greater borrowing power.
1. Fiscal policy for equalizing differences in manufacturing and industrial sector and
incentivizing private investment in the state.
• Direct Tax Code for waiver of Income and Corporate taxes
• In proposed GST, a provision for refund of Excise collected to new units set up in Bihar
or the benefit of accelerated depreciation.
This will help in rapidly industrializing the state.
Bihar not only matches the criteria for Special Category Status but also
demands a REVIEW of the criteria to incorporate the condition of economic
and infrastructural backwardness
