Bihar needs special category status to receive financial benefits that will help develop its economy. Special status would allow Bihar to contribute only 10% instead of 70% to central schemes and receive 90% grants rather than 70%. Bihar meets the criteria for special status as it has a poor resource base, remote location, and lack of infrastructure. Special status is needed to correct historical wrongs and unfair policies that neglected Bihar and hindered its development. Recognizing Bihar's status would help industrialize the state and boost India's overall growth.

1. WHY BIHAR NEEDS SPECIAL
CATEGORY STATUS

2. Special Status = Finances + tax waivers
 State to contribute only 10%
instead of 70% in Central
Schemes
 90% grants instead of 70% for
Central Schemes
Finances
 Direct Tax Code for waiver for
income tax and corporate tax
 Refund of Excise collected to
new units set up in Bihar or
accelerated depreciation
Tax Waivers

3. Bihar meets all criteria for Special Status
 Geographical isolation
 Inaccessible terrain
 Poor resource base
 Remoteness to larger
market
 Poor infrastructure

4. Bihar is young and ready to grow
12% of Indians aged less than 6 are in Bihar

5. Bihar has demonstrated growth leverage
If Bihar keeps beating
national growth
average by 2% it
would take 40 more
years to develop

6. • Bihar faces a delayed demographic dividend. An ageing India will depend on Bihar
for its workforce. Therefore, industrial development of Bihar is instrumental to the
success of India.
• An industrializing Bihar will generate a new middle class population thereby
transforming the state into next major consumer market of the country.
• India depends on the development of its poorest states such as Bihar to improve the
Human Development Index and join the league of developed nations.
Romila Thapar wrote history of Ancient India is the history of Bihar
Today, Future of Bihar is the Future of Modern India

7. British policies sent the state towards the road of
poverty and under-development
Permanent Settlement Policy poisoned
the social fabric of Bihar and crumbled
the agricultural base and economy of
the state
British neglected Bihar on
public investments and did not
develop infrastructure and
institutions in the state
Onset of railways killed
the trade environment of
Patna
TIME HAS COME TO CORRECT
THE WRONGS DONE IN THE PAST
At the time of independence, not only did
Bihar lag in infrastructure but the per capita
income of India was also 25% higher

8. Post-independence, Bihar’s poverty increased due to unfair and inconsiderate
policies of Central Government
Freight Equalization Policy killed the
industrialization of Bihar, benefitted rich states.
Estimated loss more than Rs 1.20 Lakh Crores.
A flourishing cement industry became dead.
Bihar did not receive equal consideration in
building of Central institutions. For example, the
state produced more than 25,000 IITians but did
not get an IIT until recently. No ordinance factory
was put up in the state despite positive proposals.
Infrastructure development in Bihar
was never made a priority despite
significantly poor level of public
infrastructure in the state. Installed
capacity in power generation in Bihar
is less than 0.4% of the entire country.
Nearly 50% of the villages remained
un-electrified in 2005.
TIME HAS COME TO
CORRECT
THE WRONGS DONE IN THE
PAST
Per capita income of India was 25% more than that in
Bihar at the time of Independence.
By 1960-61, per capita income of India was 42% more
than that of Bihar. By 1993-94, this disparity reached to
125%. By 2003-04, it peaked at 230%.
Today, India’s per capita income is 140% more than that of
Bihar.
INDIA CONTINUED TO RISE, BIHAR BECAME
POORER