Financial Packages in Lieu of Special Status
The Indian government has determined that reinstating special category status for states is unviable under the current framework.

Instead, the Centre is considering financial aid packages for states like Bihar and Andhra Pradesh, similar to those provided in 2015 and 2016. While there hasn't been an official demand, finance ministry officials have likely begun calculations for a new package, particularly for Andhra Pradesh.

End of Special Category Status
The dissolution of the Planning Commission in August 2014 and the 14th Finance Commission's decision not to differentiate between special and general category states marked the end of special category status in India. Starting April 1, 2015, the Finance Commission increased tax devolution to 42% and introduced revenue deficit grants for states with resource gaps.

Historical Context
Previously, states with special category status received 90% funding from the Centre for centrally-sponsored schemes, with only 10% required from the state's own resources. Eleven states, including Assam, Tripura, and Himachal Pradesh, benefited from this arrangement, which also included central assistance for projects of special importance.

Although the 90:10 funding rule still applies to northeastern and hill states, the special status category itself no longer exists. Other states now receive central funding on a 60:40 basis, with the Centre contributing 60%.

Prospective Financial Aid
For Bihar and Andhra Pradesh, the government may refer the matter to the 16th Finance Commission or the NITI Aayog if it decides to revisit the arrangement. In 2010, Bihar, Odisha, Chhattisgarh, and Rajasthan requested special category status due to financial difficulties.

The Centre remains open to developing financial aid packages for states like Bihar and Andhra Pradesh. In 2015, the NDA government announced a ₹1.25 lakh crore package for Bihar, covering infrastructure projects such as roads, railways, and power. Similarly, Andhra Pradesh received ₹10,461 crore in central assistance between FY15 and FY17 under the 90:10 rule, in addition to increased tax devolution and revenue deficit grants.

Current Developments
While there is no official demand for special category status at present, the government appears ready to extend financial aid packages, particularly to Andhra Pradesh. This approach aligns with the Centre's strategy to support states through financial measures rather than reinstating special status categories.

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