Why Bihar, AP Are Unlikely to Get Special Status in Modi 3.0 Despite Nitish & Naidu Being Key Allies

New Delhi: Two veteran politicians of coalition era emerged as kingmakers in just-concluded Lok Sabha elections as Bharatiya Janata Party (BJP) fell short of majority. Nitish Kumar-led Janata Dal United and Chandrababu Naidu-led Telugu Desam Party supported NDA government was formed at Centre with Narendra Modi swearing-in as Prime Minister of country for third time in a row.

Two similarities were pointed out between two allies of BJP. Firstly, both party supremos - Nitish Kumar and Chandrababu Naidu - are experienced players of coalition politics and have witnessed coalition era of 1990s first hand. Second, both Nitish Kumar and Chandrababu Naidu have been seeking 'special category status' for ir respective states for a long time now. Many claimed that special category status may be used as bargaining chip by two veteran leers.

Congress-led Opposition also mocked Nitish Kumar and Chandrababu Naidu for supporting BJP-led NDA, asking to clarify if leers will still pursue demand of special category status. "Will prime minister deliver special category status for Andhra Presh like he promised in holy city of Tirupati in March 2014...Unless (Chandrababu) Naidu garu takes this issue up aggressively, re is little hope that • 'one-third' Prhan Mantri will act," said Congress general secretary Jairam Ramesh a day before Naidu's oath taking ceremony.

However, despite support of Nitish Kumar and Chandrababu Naidu being crucial for BJP, two states - Bihar and Andhra Presh - are unlikely to be granted 'special category status' in Modi 3.0 government.

What is Special Category Status?

Special Category Status is a classification given by Central government to states which have been facing geographical or socio-economic disvantages. While Indian Constitution has no mention of Special Category Status, it was included in Fifth Finance Commission in 1969.

Several states including Jammu and Kashmir, Assam, Nagaland, Himachal Presh, Uttarakhand and Telangana have been accorded special category status.

Why SCS is Unlikely For Bihar and Andhra

re no more exists a provision of according special category status to states as it was done away with concept in 2015 itself. As 13 financial commission was dissolved, 14th commission did not make any distinction between special and general category states.

new commission suggested that resource gap being witnessed by states must be dealt with through tax devolution. Simply, special category status no more exists, hence, could not be accorded to any state demanding it. However, if central government wishes, it could bring back provision. 

If BJP-led NDA government decides to revisit status and meet demands of Bihar and Andhra Presh for a special category status, proposal has to be referred to 16th Finance Commission under Arvind Panagariya or to NITI Aayog for ir clearance.

Financial Packages Ahe?

biggest benefit of being accorded a special category status was that states got 90 per cent of financial contribution from Centre for all centrally sponsored schemes, while ir contribution was limited to only 10 per cent. For general category states, this ratio happens to be 60:40. 

two states may receive special packages like funds for supporting infrastructure development in Amravati, Andhra's new capital.  Central government has option to grant ditional financial aid package to states having revenue deficit and facing resource gap. Andhra Presh and Bihar may be granted ditional funds under this scheme.