Special Category Status: Why TDP and JD(U) Are Demanding for Andhra Pradesh and Bihar? Learn More About It and Why It’s Important
The Lok Sabha 2024 has thrown up a fractured mandate with the BJP unable to obtain a clear mandate on its own.
The NDA, which was a term that never came up for discussion in the past decade, has suddenly found a voice, and Prime Minister Narendra Modi has to grapple with the intricacies of coalition politics.
Two major parties of the NDA, JD(U) and Telugu Desam Party, have been thrown into prominence, and both are trying to extract their pound of flesh.
The TDP won 16 seats, and the JD(U) 12. They are both part of the Bharatiya Janata Party-led National Democratic Alliance.
One term that has suddenly gained prominence is why both Andhra Pradesh and Bihar are clamoring for special status for their state. Read on to know the complete story and what benefits states can accrue if they get special status.
What is Special Category Status?
The Special Category Status was first mentioned by social scientist Dhananjay Ramchandra Gadgil, the Deputy Chairman of the Planning Commission, who was also a key member in the Third Five-Year Plan of the Planning Commission. As per Gadgil, the special formula was given to any state during special circumstances, which include:
- The major portion of the state is composed of hilly or difficult terrain.
- The population density in the state is low, or a major component of the population is the indigenous or tribal community.
- The state has international borders.
- The state is economically backward.
- Non-viable nature of state finances.
In a nutshell, special status was given to any states that were in a disadvantageous condition. The status was given in the past to the following states: Uttarakhand, Arunachal Pradesh, Tripura, Himachal Pradesh, Sikkim, Manipur, Mizoram, Assam, Nagaland, Jammu and Kashmir, and Meghalaya. The last state to receive special status was Telangana.
Coming to the demands from different components of the NDA alliance, the allies have put forth some demands, which include:
- The post of Speaker to protect themselves from defections and splits in the future.
- Both Nitish Kumar’s JD(U) and Chandrababu Naidu’s TDP might raise their demands for Special Category Status for their states. The Congress is also adding weight behind these demands, with Jairam Ramesh, Congress General Secretary, quipping that special status for Andhra Pradesh was contemplated by former PM Manmohan Singh.
However, many factors go against the demand for special status for states. After the imposition of the GST regime, the concept of Special Status for the States has been done away with. In 2018, Minister of State (Home Affairs), Hansraj Gangaram Ahir, had informed the Lok Sabha that 11 states had been given Special Category Status by the recommendation of the 14th Finance Commission. He also added that the Special Category states “cease to exist” and “no special category has been granted to any state.”
He, however, added, “The Central Government has agreed to give special assistance to the State of Andhra Pradesh to make up for the additional Central share the State might have received during 2015-16 to 2019-20 if the funding of Centrally Sponsored Schemes (CSS) would have been shared at the ratio of 90:10 between the Centre and the State. The special assistance is to be provided by way of repayment of loan and interest for the Externally Aided Projects (EAPs) signed and disbursed during 2015-2016 to 2019-20 by the State.”
However, the situation today is markedly different from the situation in 2018, since NDA allies TDP and JD(U) have become crucial to forming a government. For now, both have given their letter of support for the new government of Narendra Modi. However, both are very sly operators and have left the NDA in the past, and there is every possibility that they will do the same if their demands are not met.
Nitish Kumar has been constantly asking for Special Status for Bihar since 2007. Chandrababu Naidu has been very vocal about the granting of special status to Andhra Pradesh ever since the bifurcation of the state into two. Also, Telangana has been accorded special status, and Naidu is asking for the same status for his state. Additionally, the granting of special status will help in the creation of a new capital in Amravati. If the demand is accepted, it can open a Pandora’s box since other states like Orissa are also asking for special status.
It is interesting to note that the 16th Finance Commission has been set up, and it is devising a formula for tax devolution between the Centre and various states starting from April 1, 2026. In the absence of a Planning Commission, the work will be done either by NITI Aayog or through the Finance Commission.
What are the benefits of Special Status?
A state that has been granted Special Status will receive a number of benefits, which include as much as 90% in the form of grants and 10% loans for central schemes. In normal conditions, Non-Special Status States, the central assistance was calculated as 30% grant and 70% loan. Additionally, special status states are also provided special plan assistance for projects of “importance to the state.” Unused funds also do not lapse at the end of the financial year, and there are many tax concessions, though that was in a pre-GST era.
Critics have been quick to criticize the BJP government for being generous to certain states and corporate houses and not focusing on uniform growth for the whole country. Many pundits attribute the losses suffered by the party to this factor. The state of AP has been without capital for 14 years, and the new capital, which is supposed to come up in Amravati, has also been held up for the lack of funds.
The State of Bihar is also asking for special status. Despite its natural resources and minerals, the State has for decades figured in the lowest rungs of the economic ladder. If the State gets special status, it will be receiving huge financial aid, which will help in kick-starting many economic and infrastructure projects and help in the social upliftment of its population.
