Sushil Modi takes on Nitish Kumar

Patna: Senior BJP leader Sushil Kumar Modi on Friday hailed the recommendations of 14th Finance Commission as "a big gift for states like Bihar" and tore into Chief Minister Nitish Kumar's claims that the state would financially suffer due to it.

"The Finance Commission recommendations are a big gift for states like Bihar. It has raised the share of states in central taxes from 32 percent to 42 percent. Our state will altogether get Rs 3,81,591 crore as share in central taxes in the next five financial years in comparison to Rs 1,65,627 crore over the last five financial years from 2010 to 2015," Modi said.

"If we go by year-on-year basis, Bihar will get Rs 55,987 crore in 2015-16 in comparison to 41,841 crore in 2014-15," he added.

The 14th Finance Commission had submitted its report to President Pranab Mukherjee on December 15, 2014 and Prime Minister Narendra Modi's government recently accepted its recommendations on devolution of central taxes to the states.

Kumar had criticised it on the grounds that it would hurt finances of Bihar and that it had done away with special category status for states.

The BJP leader, who has served as Deputy Chief Minister and Finance Minister of Bihar, said this had been made possible because the Commission had raised states' share in central taxes to 42 percent from 32 percent.

"Earlier, the central government used to raise the share by one or two per cent, but this time it has been raised by 10 percent. It has been a long pending demand of states that they should get 50 percent share of the central taxes. Chief Ministers of various states cutting across party lines, including Nitish Kumar, had demanded this," Modi said.

Hitting out at Kumar for claiming that wrapping up of many schemes sponsored by central government will pinch the limited resources of Bihar, Modi pointed out that it had been a long pending demand of all states to decrease such schemes, which were over 100 in number.

"The schemes were designed by the central government, but the states had to provide their share of money in them as well. This hurt their finances and they used to demand funds instead of schemes so that they could spend according to their needs. Moreover, many schemes were irrelevant for many states," he said.He also said that the Commission has recommended limiting of states' share in central-sponsored schemes to 10 percent against 25 percent previously. This would benefit the states financially while implementing them.

The BJP leader pointed out that with the new recommendations in place, the states will be able to spend their share in central taxes according to their wish, as "their share is now untied by any conditions".

Modi said even if the normal central assistance was taken back, it would not affect Bihar in the light of the new recommendations as such assistance amounted to just "Rs 1,352 crore per year under the Gadgil - Mukherjee formula".

"Kumar has mentioned decrease in grants, but this has been his continuous demand during the meetings of Planning Commission and National Development Council (NDC) as Bihar had been unable to draw more than 60 to 70 percent money given in grants due to various conditions imposed by the central government including submission of utilisation certificates," Modi said.

The former Deputy CM presented data indicating Rs 5,123 crore out of Rs 17,706 crore as central grants to Bihar lapsed during the financial year 2013-14. Similarly, Rs 5,785 crore lapsed in 2012-13 and Rs 3,382 crore lapsed in 2011-12.

Talking about 'special category status' for states, Modi said the 14th Finance Commission has removed the difference between 'special category' and 'general category' and ensured devolution of taxes to states on the basis of one formula. He added that states were free to provide subsidies in various forms to help attract industries.

Reacting to Kumar's contention that the Backward Region Grant Fund (BRGF) has been abolished, Modi said he was not sure whether it would continue or not, but added that it was not a very high amount and Bihar had received around Rs 12,000 crore under it over the last five years.

He pointed out that even if BRGF would come to an end, it would not affect Bihar much as its share in central taxes would grow by more than 2.25 times in the next five years and well cover any loss due to it.

Modi made light of the picture that has emerged showing Narendra Modi and Kumar shaking hands at the marriage ceremony of RJD supremo Lalu Prasad's daughter Raj Lakshmi to Samajwadi Party chief Mulayam Singh Yadav's grandson Tej Pratap.

"I don't want to say much about it, else Kumar may invite Narendra Modi again and then cancel the dinner like he did earlier," the BJP leader said.