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Rediff.com  » Business » For now, Bihar likely to get just a 'backward' boost

For now, Bihar likely to get just a 'backward' boost

March 27, 2013 09:56 IST

Bihar might have been making a very strong pitch to obtain the status of a special-category state, but it could end up getting only the funds it gets under the Backward Region Grant Fund (BRGF) augmented. A Cabinet note for this is being prepared.

Chief Minister Nitish Kumar’s demand for special-category status still looks a far cry as the proposal to alter the norms for special-category status to include more states would have to be unanimously approved by the National Development Council, a body comprising states and the Centre.

Under BRGF, used for filling critical gaps in infra and human development indices, Bihar has been getting a package of Rs 1,000-1,500 crore (Rs 10-15 billion) a year since 2002-03. According to officials in the know, the norms for this could be altered to include all districts of the state and enhance the package to Rs 2,000 crore (Rs 20 billion) next financial year.

The officials confirmed a Cabinet note was being prepared. West Bengal, another state demanding extra funds, might get around Rs 8,800 crore (Rs 88 billion), spread over the 12th Five-Year Plan period (2012-13 to 2016-17)

Budget 2013-14 had allocated Rs 11,500 crore (Rs 115 billion) for BRGF for next financial year. This was higher than the revised estimate of Rs 10,524 crore (Rs 105.24 billion) this year, but lower than the Rs 12,040 crore (Rs 120.4 billion) allocated in Budget 2012-13.

Finance Minister P Chidambaram had said in his Budget speech the present criteria for determining backwardness were based on terrain, population density and length of international borders.

“It may be more relevant to use the difference in a state’s per-capita income, literacy and other human development indicators with the national average,” he had said. He had proposed to evolve the new criteria and reflect those in planning and devolution of funds.

In 2011-12, against the national average of Rs 60,603, Bihar’s per-capita annual income was Rs 23,435, the lowest among 32 states and Union Territories.

Sanjeeb Mukherjee in New Delhi
Source: