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Special Category Status (SCS), Bihar's demand for Special Category…
Special Category Status (SCS)
What is SCS?
Authority: National Development Council.
Discontinuation in 2015 after the 14th Finance Commission recommendations.
Introduction in 1969 on Gadgil formula.
Criteria:
Hilly Terrain; Low Population Density and/or Sizeable Share of Tribal Population; Strategic Location along Borders with Neighbouring Countries; Economic and Infrastructure Backwardness; and Nonviable Nature of State finances.
11 States
- Assam, Sikkim, Manipur, Nagaland, Himachal Pradesh, Mizoram Meghalaya, Tripura, Arunachal Pradesh, Uttarakhand and Telangana.
Benefits of SCS
Incentives: Debt-swapping and debt relief schemes available.
Concessions: Excise duty concessions for industrial development.
Preferential treatment: SCS states receive 30% of the Centre's gross budget as compared to other states.
Centre-State funding ratio: Centrally sponsored schemes divided in the ratio of 90:10 for SCS states, compared to general category states (60:40 or 80:20).
Carry forward: Unspent money does not lapse and is carried forward to the next financial year.
Increased devolution: Assistance to SCS states subsumed in increased devolution of the divisible pool funds (increased to 41% in the 15th Finance Commission from 32%).
Other States
Demanding SCS
Odisha: Seeks SCS due to vulnerability to natural calamities and a large tribal population.
Centre's response: Denied, citing the 14th Finance Commission report's recommendation against according SCS to any state.
Andhra Pradesh: Demands SCS due to revenue loss post bifurcation in 2014.
Why Bihar is
Demanding SCS?
Industrial decline: Loss of mineral-rich areas post bifurcation, leading to a weak industrial base and low revenue.
Poor investment: Bihar struggles to attract private investment, hindering employment opportunities.
Backwardness: Bihar is one of the most backward states with a per-capita GDP less than half the national average.
Financial assistance need: Bihar has been demanding SCS since 2010, seeking more financial assistance and tax incentives from the Centre.
Poverty: One-third of Bihar's population lives in poverty.
Is Bihar's
Demand Justified?
Committee recommendations: Suggested a fixed amount of funds to each state based on development needs, regardless of SCS status.
Raghuram Rajan Committee: Formed in 2013, ranked Bihar lowest among states based on a multi-dimensional index, indicating its least developed status.
Centre's response: Did not accept the committee's report, and the SCS issue for Bihar remains unresolved.
SCS criteria: Bihar lacks hilly and difficult terrain, a major factor for granting SCS.
Way forward
Prioritize investments in vital infrastructure projects to enhance connectivity and basic amenities in Bihar.
Promote Public-Private Partnerships (PPPs) to attract private investment and boost economic growth in Bihar.
Design customized development plans to address Bihar's specific economic, social, and infrastructural needs.
Formulate a long-term, sustainable vision for Bihar's development, transcending political cycles for continuous progress.
Establish transparent criteria for Special Category Status (SCS) based on precise development metrics.
Bihar's demand for Special Category Status (SCS) post the "Bihar Caste-based Survey, 2022."