Centre denies Bihar’s ‘special category’ status

Current Context : The Central government has rejected the ‘special category’ status for Bihar during the all-party meeting.

ABOUT SPECIAL CATEGORY STATUS

• The “special category” status for Indian states was introduced in 1969 based on the recommendations of the Fifth Finance Commission to provide certain states with preferential treatment in terms of financial assistance and other benefits.
• Criteria : factors such as hilly terrain, low population density, strategic location along borders, economic and infrastructural backwardness, and non-viable nature of state finances.

BENEFITS TO STATES WITH SPECIAL CATEGORY STATUS

• Higher share of central assistance for planned expenditure.
• Preference in receiving funds from various central government schemes.
• Concessions in tax rates and other central government policies.
• Significant portion of central assistance as grants rather than loans.

11 STATES WERE GRANTED SPECIAL CATEGORY STATUS ARE :

• Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir (now Union Territories of J&K and Ladakh), Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.