Central fund squeeze choking Bihar’s finances: State FM - Hindustan Times
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Central fund squeeze choking Bihar’s finances: State FM

By, Patna
Mar 03, 2023 10:05 PM IST

The opposition BJP had, on Thursday, blamed the government for failing to generate own revenue and announcing jobs without adequate financial provisions in the Budget.

Bihar’s finance minister Vijay Kumar Choudhary Friday accused the union government of meting out step-motherly treatment with the state and said revenue generation in the divisible pool, through which states get their share, had stagnated even as the share of cess and surcharge to the non-divisible pool has doubled.

Bihar finance minister Vijay Kumar Choudhary addresses a press conference during the Budget Session of State Assembly on February 28. (ANI)
Bihar finance minister Vijay Kumar Choudhary addresses a press conference during the Budget Session of State Assembly on February 28. (ANI)

The finance minister was giving the government reply on the 2023-24 budget for the state in the Assembly after the debate during which 15 leaders from different political parties expressed their views since it was tabled on Tuesday.

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The opposition BJP had, on Thursday, blamed the government for failing to generate own revenue and announcing jobs without adequate financial provisions in the Budget.

Choudhary said the Centre was hurting states in three ways. “The Centre announced higher devolution of funds to the states, from 32% to 42%, as recommended by the 15th Finance Commission in 2015-16, but the stark reality is that no state gets that much. Till 2019, it was only around 35%-37%. In 2019-20, it was 32%. In 2020-21, it was 33% and 31% in 2022-23. In 2023-24, it is estimated to be 30%. For a poor state like Bihar, it is gross injustice as it puts enormous fiscal stress. To make things more difficult for the state, there is a growing number of centrally sponsored schemes for which state has to give matching share though central share never reaches timely,” he said.

The finance minister said there were over 100 centrally sponsored schemes despite Niti Aayog’s recommendations that it should not be more than 30-35. “The Centre wants to take credit for all the centrally sponsored schemes, gives it name, while the burden is in on the state, which has limited financial strength. Even the successful state schemes are subsumed in the centrally sponsored schemes to take credit after all our hard work,” he said.

Choudhary said cess and surcharge were always meant for a limited period and purpose, and were not supposed to run endlessly without giving benefits to the state. “But they are there now for 20-30 years and increasing. This is the reason why the benefits of huge fall in crude oil prices in the international market could not reach the masses. Petrol price has 20/litre excise duty. However, the basic excise duty is just 1.40, which goes to the divisible pool. Rest are special and additional excise duty to the tune of 11/litre, which goes to the non-divisible pool. Then there is road and infrastructure cess of 5/ litre and agriculture development cess of 2.50/litre, which also go to non-divisible pool. So, the state share from the divisible pool is getting more and more redirected, even as Centre’s revenue generation goes up,” he said.

The minister, who is from chief minister Nitish Kumar’s party JD-U, said the having devotion for the party was good, but one should not turn blind at the cost of the state and the society, as the BJP leaders were demonstrating. “Bihar’s growth story is not hidden from anyone, but it cannot be seen by those who prefer to play blind. The night-time light atlas prepared by the national remote sensing centre of Indian Space Research Organisation (ISRO) for the 2012-21 showed to the world the 474% increase in power availability in Bihar. Women empowerment and Jeevika is cited as success story that is ushering in silent revolution in the state, while United Nations Environment Programme country director lauded Bihar’s climate resilience model. If all that is not visible to the BJP leaders, not much can be done. But for Nitish Kumar, I can only say he has miles to go before he sleeps, as he has a lot to do. He is one leader who walks the talk,” he said.

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  • ABOUT THE AUTHOR
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    Arun Kumar is Senior Assistant Editor with Hindustan Times. He has spent two-and-half decades covering Bihar, including politics, educational and social issues.

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