The Centre released Rs 1,767 crore as "special plan" for Bihar to complete earlier sanctioned projects under the Backward Regions Grant Fund (BRGF).

In its tweet on Thursday evening, the last working day of the 2015-16 financial year, Niti Aayog said the Centre acted upon its suggestion.

The development takes place after chief minister Nitish Kumar and the BJP have been engaged in confrontation over central funds given to Bihar in the legislative bodies. Nitish alleged that the Union government has remained silent on the BRGF despite repeated reminders.

The development caught finance department by surprise. When finance minister Abdul Bari Siddiqui was told about Niti Aayog's announcement on Twitter, the micro-blogging site, he asked his officials to come up with a copy of the tweet. "I have raised the matter with the Union government several times. It is a result of our efforts," he told The Telegraph. However, there is still confusion in the finance department if the Centre would continue the BRGF or it was just a one-time payment for pending projects.

Incidentally, Niti Aayog vice chairman Arvind Panagariya, chief minister Nitish Kumar and finance minister Abdul Bari Siddiqui met on Tuesday evening at a dinner hosted by former Rajya Sabha MP N.K. Singh. "Nitish was apparently assured release of funds at this meeting," said a person who attended the dinner. Panagariya had come to Patna to attend the silver jubilee function of Asian Development Research Institute.

BRGF has its origin in the bifurcation of Bihar in 2000. The then Atal Bihari Vajpayee government had announced a Rs 1,000-crore package in the form of Sam Vikas Yojana as compensation for the losses faced by Bihar because of the bifurcation. Later, it was translated into BRGF - funds which were to be used building of roads, panchayat bhavan, anganwadi centres, irrigation channels etc. However, after the NDA-II government came into power in 2014, there was announcement of implementation of the 14th Finance Commission but the BRGF found no mention in the budgets.

In February this year, Nitish had sought Rs 8,200 crore under BRGF from Union finance minister Arun Jaitley, pleading that the state had received just one third of the committed Rs 12,000 crore so far. He had also sent a letter to Prime Minister Narendra Modi for the same.

Politically, it is being seen as warming up between Nitish and Modi. When Modi came to Bihar on March 12, he lauded Nitish publicly for work done for electrification of villages, sending political circles buzzing. Even Panagariya applauded Nitish for his efforts to develop the state. "It is still too early to predict a re-alliance between Nitish and the BJP. But the level of bitterness between the central BJP leadership and Nitish has come down. As for us, we have received no message to spare Nitish in our criticism," said a senior state BJP leader, adding that the Niti Aayog recommendation, unlike Planning Commission in the past, is not mandatory for the Centre to follow.