Bihar Chief Minister Nitish Kumar's JD(U), which the BJP relies on heavily since losing majority in the Lok Sabha, has reiterated its demand for special category status (SCS) for the state.

Granting SCS to Bihar has been a long-pending demand of the JD(U) supremo. The Bihar cabinet, headed by Kumar, had even passed a resolution last year requesting the Centre to grant SCS to the state.

The Centre had previously said it would not entertain demands for "special category status" from any state, in view of the 14th Finance Commission's recommendation. The SCS was introduced in 1969 to benefit certain backward states with hilly terrains, strategic international borders, and economic and infrastructural backwardness.

With 12 MPs, the JD(U) is the second biggest BJP ally after the Telugu Desam Party's 16 in the NDA. The backing of allies like the JD(U) and TDP is crucial for the BJP to form the government at the Centre, as the saffron party could not reach the majority mark on its own in the Lok Sabha elections.

Speaking to reporters on Wednesday, senior JD(U) leader and Bihar minister Vijay Kumar Choudhary said, "The JD(U) is part of the NDA and will remain with it. But there are certain demands of the JD(U) related to the financial condition and economy of Bihar that must be fulfilled by the Centre. Our demand for special category status for Bihar is fully justified and needs to be fulfilled. We stick to our demand for SCS for Bihar." Justifying the Bihar government's demand for SCS, state parliamentary affairs minister Choudhary (who previously held the finance portfolio) told PTI on Thursday, "Bihar government has been demanding SCS for the state since 2011-12. Before that, a resolution in this regard was passed by both Houses of the Bihar legislature. Bihar is the most deserving state that needs special financial assistance from the Centre." "The NITI Aayog had earlier admitted that Bihar made 'tremendous progress' across multiple sectors in the last decade, but owing to its weak base in the past, the state may take some more time to catch up with others and reach the optimum growth in all aspects. This is the reason that we have been demanding special assistance from the Centre," said Choudhary.

The economy of Bihar is one of the fastest-growing in India, he said, adding that the state has not only grown consistently, but also outperformed even the most developed states. "We need a special package for the overall development of the state," he added.

According to experts, obtaining the special category status enables states to receive certain fiscal and tax benefits aimed at helping them attract investments and foster economic development due to certain geographical and socioeconomic disadvantages.

"Under the SCS, the Centre provides 90 per cent of funds in schemes that it sponsors. Other states that do not fall into this category receive 60 to 70 per cent of funds from the Centre, while the rest must be managed from their finances. These states also receive subsidies on excise and customs duties, income tax, and corporate tax," the minister told PTI.

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