back to top
    BusinessWhy Bihar and Andhra Pradesh face challenges in obtaining special grants from...

    Why Bihar and Andhra Pradesh face challenges in obtaining special grants from Centre


    As a seasoned reporter, I have learned that internal deliberations within governments often provide important context behind challenging policy decisions. According to reliable sources familiar with the discussions in New Delhi, granting special category status to the states of Bihar and Andhra Pradesh, as demanded by key NDA allies – JD(U) and TDP respectively, will be a complex proposition for multiple valid reasons.

    One of the major benefits that special category states enjoyed in the past was a 90:10 funding split for centrally sponsored schemes, with 90% grants borne by the Centre. For other general category states, this ratio stood at 60:40. Additionally, special category states received higher allocation of grants compared to loans under normal Central assistance.

    However, opening this window exclusively for Bihar and Andhra risks setting an undesirable precedent that could compel similar demands from other economically backward states across the country. With limited fiscal resources at its disposal already, the government is wary of taking a decision that may snowball into an unsustainable financial commitment.

    Instead, alternatives like special development packages tailored to the specific needs of these two states are being explored. Andhra Pradesh, for instance, could be supported through dedicated allocations for the ongoing construction of its new capital Amaravati. While not a substitute for special category status, such targeted measures may provide some relief to allies without straining the exchequer.

    Of course, the states too will have an opportunity to directly make their case and present revenue-expenditure data before the 16th Commission during its forthcoming visits. However, with competing priorities from multiple regions, strong empirical evidence will need to be furnished to justify preferential treatment over other needy states. Only a well-balanced approach can resolve these complex inter-governmental issues equitably.

    The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

    Share post:


    More like this

    Infra.Market Secures INR 185 Crore Debt Funding Boost to Fuel Growth Plans

    Leading B2B e-commerce platform Infra.Market has raised an additional...

    Indian Startups Garner $138 Million in Funding Last Week Led by Dezerv’s $32 Million Round

    Indian startups had an active funding week as they...

    Bangladesh Delegation Visits Major Indian Ports to Assess Potential for Using Their Infrastructure to Export Goods

    Bangladesh is exploring opportunities to significantly alter its export...

    Personal income tax collections surpass corporate tax as direct tax collection grows nearly 20% YOY

    Government tax collectors have seen impressive growth in direct...