New Delhi
Former Niti Aayog vice chairman Rajiv Kumar highlighted the Union Government’s need to carefully assess Andhra Pradesh and Bihar’s longstanding demands for special category status, cautioning against hasty decisions that could strain the Centre’s fiscal resources. Speaking to sources, Kumar highlighted Andhra Pradesh’s request for special status following its bifurcation in 2014, citing revenue loss due to Hyderabad becoming Telangana’s capital. Similarly, Bihar has sought this status since 2005, attributing revenue decline after Jharkhand’s formation in 2000 from its mineral-rich areas.
Kumar stressed the importance of thoroughly examining the economic rationale behind these demands. He noted that special category status entails the Centre funding 90% of centrally sponsored schemes for these states, compared to 60% for others, with the state governments providing the rest. Rapidly granting such status could set a precedent, leading more states to make similar demands, thereby burdening the government’s finances, he cautioned.
The abolition of special category status by the 14th Finance Commission increased states’ share in centrally collected taxes to 42%, altering the financial landscape. Kumar suggested that the Finance Commission should review this issue comprehensively.
In political discourse, both the Telugu Desam Party and Congress Party have raised concerns over unmet promises regarding special category status. The matter remains contentious, with stakeholders urging clarity and deliberation on fulfilling these demands.
