New Delhi/Patna: Amid demands from states like Bihar to revise existing yardsticks for granting special status to backward states, Centre on Thursday proposed to evolve a new criteria that would reflect in future planning and devolution of funds to the states.
Welcoming the announcement, Chief Minister Nitish Kumar said in Patna it was a `victory in-principle` for Bihar in view of its consistent demand for grant of such a status.
In his budget speech, Chidambaram said, "the present criteria for determining backwardness are based on terrain, density of population and length of international borders.
"It may be more relevant to use a measure like the distance of the state from the national average under criteria such as per capita income, literacy and other human development indicators. I propose to evolve new criteria and reflect them in future planning and devolution of funds".
The announcement comes at a time when the UPA is on the look-out for new allies and sees a potential friend in Nitish Kumar in case the BJP projects Narendra Modi as its face for the next Lok Sabha elections.
The antipathy between Kumar and Modi is well-known.
Kumar`s party had plans to address a rally in New Delhi on March 17 on the issue. Bihar government has been consistent in its demand for changing the criteria for determining backwardness of a state so that it could get special status.
Kumar told reporters in Patna "we have been demanding review of the criteria for special status to the states for a long time and framing of new criterion for grant of such a status to backward states like Bihar....I am glad that Chidambaram has referred to revisiting criteria for special status during his budget speech".
The Chief Minister, however, ruled out a political meaning of his lavish praise for the Finance Minister and said that no such conjecture should be made as the Centre`s commitment to revisit the special status.
A Congress leader speaking on the condition of anonymity pointed out that Bihar has got "huge funds in the budget."
Special category status attracts investment in a state as investors get tax benefits. In 1969 while devising formula for sharing central assistance among states, the Fifth Finance Commission acting in line to the Gadgil formula, had accorded special status to three states on the basis of harsh terrain, backwardness and social problems prevailing in these states. The number later rose to 11.
The states which have been granted special category status include Arunachal Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkin, Tripura and Uttarakhand.
In the budget speech, Chidambaram also announced to allocate a sum of Rs 11, 500 crore in Backwards Regions Grant Fund (BRGF), which he described as a "vital source of gap funding" besides another sum of Rs 1000 crore for Left Wing Extremism (LWE) affected areas.
"BRGF will include a State component for Bihar, the Bundelkand region, West Bengal, the KBK districts of Odisha and the 82 districts under the Integrated Action Plan," he said.
Welcoming the announcement by the Finance Minister on revisiting the yardsticks for determining backwardness of a state, Rajya Sabha MP from JD-U Ali Anwar Ansari said that Chidambaram`s proposal is a victory of JD(U)`s constant demand for the same and hoped it will lead to the grant of special state status to Bihar.
"We have been raising this demand to change the benchmarks of backwardness of a state so that Bihar can avail the benefits of a special state category for its rapid industrial and other kinds of development. The announcement is a step towards us achieving that goal," he told PTI.
Kumar had earlier given indications that his political support to any party after the next Lok Sabha election could be linked to that party`s stand on granting special status to Bihar. BJP had immediately committed its support to the demand.
The Bihar Chief Minister had planned to address a rally at Ramlila ground in the national capital on March 17 threatening to fill the ground with Biharis in a bid to to put pressure on the Centre to accept the state`s long-pending demand.
In December last year, he had raised the issue forcefully at the National Development Council (NDA) and accused the Inter-ministerial Group (IMG) set up by Prime Minister Manmohan Singh of not looking into the demand seriously.
As per Gadgil formula, a special category state gets preferential treatment in federal assistance and tax breaks.
The special-category states get significant excise duty concessions, and thus help these states attract large number of industrial units to establish manufacturing facilities within their territory.
Kumar had in December last year met the Prime Minister and handed over a six-page letter on the demand to provide special category state status to Bihar to spur growth.