Bihar chief minister Nitish Kumar has urged Prime Minister Manmohan Singh to favourably consider the demand for grant of special category status to Bihar and take up other policy initiatives to mitigate Bihar’s persistent inequities. “The people of Bihar will be grateful to you if the request for special category status and other initiatives were considered,” Kumar said in a six-page letter submitted to the PM in New Delhi on December 6.

Kumar, who raised several issues during his meeting with the PM, had handed over a separate letter on the special status demand. Enumerating Bihar’s development deficits, Kumar said the special status would alter the formula between loans and grants from 70:30 to 90:10.

He said a special status would also give a tax break both for direct and indirect taxes and catalyse private investment flows. “To overcome the handicap of a latecomer and consequential infrastructure and other deficiencies, a tax holiday could ameliorate the disabilities, incentivise the private inflows and create the necessary growth multipliers,” he said.

Demanding policy frameworks for mainstreaming Bihar along with other backward states, he said the per capita income of Bihar stood at Rs. 465 in 2009-10 while it was Rs. 914 in non-special category states. In Punjab it was R1,715, in Haryana Rs. 1,640 and Rs. 1,274 in Tamil Nadu.

In addition, Bihar also has the lowest per capita spending on education, health, social and other economic services.