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Status demand reaches key Delhi meet

- Jaitley discusses issues with finance ministers ahead of budget presentation

The state on Monday strongly pitched for cutting of funds for centrally sponsored schemes and demanded that more assistance be given to states directly to decide their “priorities” instead while raising the special category status demand.

In New Delhi during the pre-budget meeting of finance ministers, Bihar finance minister Bijendra Prasad Yadav said the 12th plan document seeks to keep the central assistance to states at 1.26 per cent of the GDP, at the same level as during the 11th plan and that too with strings attached.

“Out of total proposed central assistance of Rs 8,57,786 crore, approximately 67 per cent is proposed to be tied up in prescriptions from the Union government for the schemes called ‘state plan’ funded by the Centre like Rashtriya Krishi Vikas Yojana, Accelerated Irrigation Benefit Programme and Jawaharlal Nehru National Urban Renewal Mission. These schemes are nothing but centrally sponsored schemes disguised as ‘state plan’ ones. This practice weakens and compromises the plan formulation function of the states. This practice should be stopped and the entire assistance should flow on the basis of objective entitlement-based distribution formula with freedom to the states to decide their priorities,” the Bihar finance minister said in the meeting chaired by his Union counterpart Arun Jaitley.

He added: “Following the BK Chaturvedi Committee report, a number of central schemes have been merged, thus reducing the total number from 147 to nearly 60. Our concern that such assistance, which constitutes about 20 per cent of the total transfers, continues to be largely discretionary remains to be met.”

Bijendra also advocated that all other states which qualify as per the new parameters fixed by Raghuram Rajan Committee set up by the Centre on Bihar’s vociferous and persistent demand should be accorded the status of special category state.

As per the report, it fixes a new criterion for backwardness and the need of each state. It named Bihar as one of the 10 “least developed” states that could be targeted for additional assistance.

While states like Goa, Kerala and Tamil Nadu named as the most developed states. “The Union government has moved partly by re-visiting the parameters of backwardness but thereafter nothing concrete has been done,” Bijendra said.

“In the context, we urge that the new criteria be settled quickly so that a special category status to Bihar can be accorded at the earliest. We believe that such a decision is central to our development objective and without which the present high growth trends will falter. Improvement in the quality of governance, bridged infrastructure deficits, both physical and social, have created new aspirations among the people of Bihar, particularly its young population,” he said, adding that new hope and expectation deserves support from the Centre.

The state also suggested that sufficient flexibility be given to states with respect to programme content so as to alter the design as per local needs. There is also the need to provide for “flexi funds” to address the issue of divergent levels of economic development, geographical conditions and nature of gaps in physical infrastructure.

Bihar highlighted that fiscal deficit limit of 3 per cent puts a break on the development effort of the poor state like Bihar despite the fact that it is at present revenue surplus.

“I suggest that states with low income, but revenue surplus, should be allowed a higher level of fiscal deficit up to 4 per cent by allowing changes in the Fiscal Responsibility and Budget Management Act,” Bijendra said.

The newly formed Narendra Modi-led government will present the present the budget in the upcoming monsoon session of Parliament and the Centre had called a meeting to gauge the concerns and opinions of different states today.

The state also felt that the budget should review all the existing cesses and surcharges to bring down their share in the gross tax revenue. This will enhance the total resources for devolution, said Bijendra.