BJD Demands Special Category Status for Odisha Ahead of 16th Finance Commission

Bhubaneswar: The Biju Janata Dal (BJD) has intensified its demand for Special Category Status (SCS) or Special Focus State status for Odisha, citing the state’s frequent natural disasters, historical deprivation, and a significant 40 percent SC/ST population. The demand was formally placed before the 16th Finance Commission through a memorandum submitted by senior BJD leaders.

Addressing the media, BJD leaders Prasanna Acharya, Dr. Amar Patnaik, Prafulla Samal, and Sashibhusan Behera highlighted Odisha’s pressing financial challenges and urged the Commission to ensure a fair allocation of resources to drive the state’s long-term development. The party emphasized that if Special Category Status is not granted, Odisha should at least receive a 90:10 funding pattern for Centrally Sponsored Schemes (CSS), similar to the North Eastern and Western Himalayan states.

The memorandum pointed out that Odisha’s share in the divisible pool of central taxes has been declining over the past two decades. The BJD demanded a revision in the allocation formula to ensure the state receives a fairer share of central revenues for essential development programs. The party also expressed strong opposition to the impact of the 80th Constitutional Amendment, which has allowed cesses and surcharges to be excluded from the divisible pool, reducing the financial autonomy of states. BJD urged the Finance Commission to restore the original framework to ensure predictable and sustainable revenues for states like Odisha.

Additionally, the party raised concerns over outdated royalty rates on minerals, despite Odisha being one of India’s most mineral-rich states. It called for an urgent revision and indexation of these rates to secure a fair share of revenue from the state’s natural resources.

Recognizing Odisha’s vulnerability to frequent cyclones, floods, and droughts, the party proposed introducing a new financial criterion for “Climate and Disaster Proofing” in budget allocations. The BJD urged the Finance Commission to allocate dedicated resources for disaster risk reduction, mitigation, and climate resilience. The memorandum also pushed for an increase in local body grants from 3.05 percent to 5 percent of the divisible pool to strengthen local governance and improve infrastructure, healthcare, and welfare services at the grassroots level.

Furthermore, the party suggested the introduction of a Green Tax on mining activities to offset environmental costs and promote sustainable development. It argued that mineral-rich states like Odisha should have the authority to levy such a tax to fund environmental conservation efforts.

The BJD strongly criticized the Centre for rejecting sector-specific and state-specific grants recommended by the 15th Finance Commission, stating that it undermines the constitutional authority of the Commission. The party insisted that the 16th Finance Commission should ensure that its recommendations are treated as an indivisible package.

In addition, the memorandum called for increasing the weightage for maintaining green cover from 10 percent to 20 percent, considering Odisha’s vulnerability to climate change. The party also opposed the diversion of the Clean Energy Cess levied on coal production—Odisha being the second-largest coal producer—for GST compensation instead of clean energy initiatives. It demanded that this cess be separated from GST and apportioned to coal-producing states in a 60:40 ratio, as recommended by the 13th Finance Commission Task Force.

With these demands, the BJD has urged the Finance Commission to acknowledge Odisha’s unique challenges and pave the way for a more equitable financial future for the state and its citizens.