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Friday , July 25 , 2014
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Assocham proposes special aid for state

The Associated Chambers of Commerce and Industry of India (Assocham) has pitched for giving special assistance to backward states like Bihar to spur all-round and balanced economic growth.

The state’s performance in managing fiscal affairs impressed the industry body.

“The Centre should agree to provide special assistance outside what the Finance Commission recommended to the low-income states to raise their funds availability so that they can grow at a much faster rate,” said D.S. Rawat, national secretary general of Assocham, while releasing the chamber’s study report here.

Assocham has come out with a report titled “States’ Finances Convergence-2”, incorporating five high-income states and six low-income states to compare their growth rate.

Rawat, accompanied by newly constituted Bihar Council co-chairman Ram Lal Khetan, said the report recommended the central government to ask the Finance Commission to give special grant to states after categorising them into two parts — mineral-rich states and non-mineral-rich states. “This would help states like Bihar, a non-mineral resource rich state, in getting more funds for development activities,” Rawat said.

Khetan said: “We have submitted the report to the central and state governments a fortnight ago with a recommendation for according special category status to Bihar for its faster development.”

The report talks of three phases for carrying out studies on various growth indicators of five high-income states of Gujarat, Haryana, Kerala, Maharashtra and Punjab, while six low-income states of Assam, Bihar, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh. The first phase period is 1980 to 1993, while the second phase ranged from 1993 to 2004 and third being the latest category of 2004 to 2013.

Stating that Bihar has ranked first in fiscal management amid traditionally low-income states, Rawat said: “Bihar is virtually hitting headlines by clocking the highest growth rate of over 66 per cent on state’s own tax revenue front, while it achieved 284 per cent growth rate in terms of state’s own non-tax revenue collection.”

“The state’s own tax revenue surged from over Rs 12,612 crore to over Rs 20,962 crore, while its non-tax revenue collection rose from Rs 890 crore to over Rs 3,400 crore during 2011-12 and 2013-14,” the Assocham study said.

“With a median value of 13.13 per cent of nominal gross domestic product between 2006-07 and 2012-13 fiscals, Bihar has emerged as a leader amid traditionally backward states,” the report said, adding that such an impressive growth had been possible owing to huge public investments in the fields of rural roads, irrigation, agricultural growth, education and public health.

Moreover, the state also claimed poverty reduction from 53.8 per cent in 2004 to 33.7 per cent in 2011-12, which is still above the national average, Assocham noted.

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