Chief minister Nitish Kumar has asserted to Prime Minister Narendra Modi that "special category status" and "special assistance" to states like Bihar is necessary in the national interest, as it would not only ensure holistic development of the country but also help stabilise the volatility in national growth.

Nitish raised the demand while meeting Modi in New Delhi on Saturday and also submitted a letter to him, a copy of which the chief minister's office released on Sunday.

"It is our firm belief that the nation cannot develop without a balanced development of all states and regions. A special policy initiative is must to bring regions, which are backward... to the national average of growth," Nitish said.

The chief minister said the granting of special category status to Bihar "will on one hand ensure greater availability of resources due to increased central share in the central schemes, whereas on the other hand, incentivise private investments because of concessions in direct and indirect taxes, thus generating greater employment opportunities."

In the letter, he focused on the fact that since Independence, some states had grown faster while various others had suffered. The Planning Commission and various finance commissions had failed to ensure inter-state fiscal equalisation - and Bihar has been among its major victims.

Articulating the need for special category status, the chief minister said the behaviour of national growth statistics suggested "high volatility in which years of high growth are substituted with low growth years and this uneven performance dents investors' confidence". This was because of excessive reliance on rates of growth achieved by more advanced states.

"These undesirable fluctuations in national growth data would be mitigated if more backward and poorer states are incentivised through suitable policy actions. Bihar, with a share of 8.2 per cent of India's population, contributes just 2.88 per cent to the national gross domestic product (GDP)," Nitish said and added that the state's quest was to be a proportionate contributor according per its population to the country's GDP.

Nitish has been demanding special category status for Bihar since he became chief minister post in 2005.

He had been raising it at forums like the then Planning Commission, NITI Aayog, Inter-State Council and the National Development Council.

He expedited the demand on political platforms too after breaking away from the NDA in 2013 and his party JDU ran a statewide signature campaign to support it in the run-up to the 2014 general election.

Nitish pointed out that the state was still lagging behind the national average in major development parameters of poverty line, per capita income, industrialisation, and social and physical infrastructure despite clocking a double-digit growth. It also suffered vastly due to annual visitation of floods, which resulted in loss of lives and massive damage to property and crops.

"The per capita income of Bihar for financial year 2015-16 on (2011-12 constant prices) was Rs 26,801 or only 34.6 per cent of the national per capita income pegged at Rs 77,435 in the same period, which was among the lowest in the country," Nitish said.

"A new policy framework is needed to uplift Bihar to the national mainstream. It is essential to consider the special needs of Bihar," Nitish added.

The chief minister pointed out that the share of devolution of funds among the states on the basis of the formula fixed by the 14th Finance Commission had led to a reduction in the share of Bihar from 10.9 per cent to 9.7 per cent.

He added that Bihar had got Rs 13,400 crore in less than two years (2015 to 2017), as the Centre offered the excuse of hiking tax transfers to states from 32 per cent to 42 per cent for reduction in allocation of funds for central schemes.