New Delhi, Sept. 26: The Raghuram Rajan committee today adjudged Bihar among the “least developed” states, making out a strong case for “additional forms” of central support to push them up the development ladder but stopped short of recommending Nitish Kumar’s demand for grant of special rights.
The report, however, did not close the option for the central government to exercise its discretion and grant special rights to any of the 10 “least developed” states in which Bihar figured second only to Odisha. Bihar scored 0.76 on the underdevelopment index, just above Odisha (0.80) while Jharkhand was fifth with a score of 0.746.
“The committee recommends that least developed states, as identified by the index, be eligible for other forms of central support that the central government may deem necessary to enhance the process of development,” the report recommended.
Talking about special category already in place for some states, the report said it can be “run in parallel” to the one the committee has proposed and went on to see merit in the categorisation.
“There is some merit in categorisation, however, to the extent that it allows the Centre to target special benefits,” the report said.
Nitish, who has been campaigning for special status to Bihar, endorsed the report, describing it as the victory of his principles and the struggle of the people of Bihar.
“The protracted struggle of the people of Bihar for their right to prosper has yielded fruit. The Rajan committee report is testimony to the fact that our long struggle for special category status has heralded a fundamental change in the treatment to Bihar, along with nine other least developed states,” the chief minister said in Patna. ( )
The committee has also kept the door open for the central government to provide “additional forms of support” to underdeveloped states. “The Centre may want to offer additional forms of support to states that are particularly underdeveloped. Our index offers an opportunity to do that,” the report said.
Even without special category status, the Rajan committee recommendations, if accepted, would make Bihar eligible for substantial central funds. Bihar, based on its population, could get one of the highest shares of central funds, next only to Uttar Pradesh, the country’s most populous state.
For every Rs 1,000 crore allotted to states by the Centre, Bihar would corner a sum of Rs 120.38 crore. Uttar Pradesh, which also figures in the “least developed” list, will get the highest share of Rs 164.11 crore, according to the report.
The most populous states would end up cornering a large share of the central funds as the committee decided to assign 80 per cent weight to population and 20 per cent to area of the state in deciding on fund allocation.
Economist Shaibal Gupta, a member of the committee considered close to Nitish, however, was not happy with the report and submitted a nine-page dissent note, disagreeing with some of the indices used to determine development and, most importantly, denial of special category status.
“It is surprising…the report makes recommendation for a new categorization of states, where ‘special category status’ does not figure,” Gupta said in dissent and saw it as an effort to deny special category status to Bihar.
“It seems there is a concerted strategy not only to deny Bihar special category status but also denying its legitimate demand by putting it on a higher rank in the underdevelopment index,” he added.
He said special category status was a “necessary pre-condition” for development of a historically disadvantaged state like Bihar since apart from devolution of funds, special status grants other facilities like tax concessions to trigger “economic resurgence with public and private investment coming in a big way”.