Nitish meets PM, seeks special category state status for Bihar

New Delhi: Ahead of the annual budget, Chief Minister Nitish Kumar on Tuesday met Finance Minister Pranab Mukherjee seeking "special category state" status for Bihar and allotment of over Rs 3100 crore for it under Backward Region Grant Fund special plan in 2011-12.

Seeking special status for his state on par with Himachal Pradesh, Uttaranchal and the North-Eastern states, Kumar said this will help attract private investment and reduce the burden on the state where currently the government is the predominant engine for development.

Kumar also expressed concern at the dwindling share of Bihar in the 13th Finance Commission grants ruing "despite the high development deficit, the share of the state of Bihar has been reduced in the 13th Finance Commission (FC) award."

He said, "from 11.028 per cent of tax devolution in the 12th FC, the share has come down to 10.917 per cent in the 13th FC. Thus the 13th Finance Commission's award has seriously undermined the concept of equity and nationally comparable public services in the state. This deficit must be compensated with special grants."

In his memorandum to Mukherjee, Kumar said that the state requires fund to the tune of Rs 3145.43 crore in the coming financial year for completing on-going schemes under Backward Region Grant Fund.

Besides, he also sought a special annual BRGF assistance of Rs 4,000 crore during 12th Plan for the state arguing that Bihar's historically large development deficit needs to be shared between the Central and the state governments.

Kumar also called for reducing the number of Centrally-sponsored schemes saying their requirements for state's shares pre-empt the state governments' discretion to use their resources as per their own needs and compel the states to adopt 'one size fits all' schemes.

"There is a need to drastically reduce the number of CSSs and instead devolve funds allocated to different sectors in consultation with the states," he said.

Kumar also urged the Centre to expedite the decision regarding Bihar's dues estimated to over 5000 crore to be received from Jharkhand as per Bihar Reorganisation Act, 2000.

He noted that a strict adherence to the fiscal deficit limit of three per cent for the financially disciplined states like Bihar limits its market borrowings at the time it needs the resources most. He said, "The states with low income, but revenue surplus, should be given a chance to avail of more borrowings for increasing their developmental expenditure".

Kumar also sought an enhancement in the ceiling of borrowing for Bihar in 2011-12.