No need for 'special category' status to Bihar: Planning Commission

According to a senior Planning Commission official, Bihar gets a special package of Rs 1,500 crore per year for five years which has been been there since the 10th Five-Year Plan

The Planning Commission thinks Bihar’s interests could be served better if its current financial package for the state is allocated more funds, rather than the ‘special category’ status the state is demanding.

“It is unlikely that Bihar would get more money by changing the criteria of special category states. It would get more money by simply expanding the ongoing package,” a senior Planning Commission official told Business Standard on Thursday.

He said at present, Bihar got a special package to the tune of Rs 1,500 crore per year for five years, which has been been there since the 10th Five-Year Plan.

“The Commission is planning to renew the package for the 12th Five-Year Plan as well, but by how much will depend on available resources,” the official said.

He said though the state might not have a special category status, it was getting a significant amount of funds through special programmes.

“Usually, funds allocated through centrally sponsored schemes are five times the normal central assistance a state gets. In that sense, Bihar already gets a sizeable amount,” the official said.

Bihar has been consistently demanding it be granted a special category status.

Special category for Bihar would mean alteration of the current formula of 30 per cent loan and 70 per cent grant to 10 per cent loan and 90 per cent grant for centrally-sponsored schemes and external aid, besides tax breaks.

A special category status is accorded to a state on the basis of five conditions — hilly and difficult terrain, low population density and sizeable share of tribal population, strategic location along borders with neighbouring countries, economic and infrastructure backwardness and non-viable state finances.

On these grounds, an IMG, set up after the intervention of Prime Minister Manmohan Singh, had rejected the Bihar government’s plea to grant it the status of a backward state.

Odisha, Rajasthan and Jharkhand have also demanded this status.

So far, 11 states have been accorded this status: Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.