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Economy Dec 27, 2012

Nitish demands special category status to Bihar

New Delhi: Unfazed by the Planning Commission disapproving his demand to grant special category status to Bihar, Chief Minister Nitish Kumar today made a strong pitch for it, alleging the Centre's Inter-Ministerial Group (IMG) did not consider the issue with seriousness.

Addressing a meeting of the National Development Council (NDC) chaired by Prime Minister Manmohan Singh, Kumar also demanded that the Centre should provide at least 90 percent of the scheme expenditures as its share in central government schemes and "fix the wages under MNREGS at par with the minimum wages fixed by the state".

Bihar Chief Minister Nitish Kumar. Image courtesy PIB

On the issue special status to the state, he alleged that IMG constituted by the prime minister "did not consider the issues spelt out with due seriousness and reached pre-ordained conclusions on parameters of special status".

Kumar also demanded the constitution of an expert group to examine and recommend appropriate policy measures to overcome development disabilities of Bihar.

The Bihar chief minister had met the prime minister some time back and submitted him a detailed memorandum on why the state government was seeking special category status for Bihar.

He also met Finance Minister P Chidambaram here last evening soon after Planning Commission Deputy Chairman Montek Singh Ahluwalia said that Bihar does not meet the existing criteria to be granted the status of special category state.

In his speech at the NDC meeting in New Delhi, Kumar that the case of Bihar being a landlocked and a least developed state should have prompted IMG to adopt a different approach altogether.

Kumar also demanded a revised Gadgil formula for ensuring higher devolutions for a "backward state like Bihar" as an overriding priority for inclusive growth as envisaged under the 12th Five Year Plan.

Noting that the country has shown high growth rates of 7.6 and 7.9 percent in the 10th and 11th Five Year Plan, the Bihar chief minister said, "To sustain the growth momentum at national level, special attention to the states lagging behind in terms of income, infrastructure and investment would be essential."

Kumar said that the envisaged "faster growth" was possible only if backward states were made partners in national growth.

"Growth will be more inclusive and sustainable only if backward states are supported by resources and enabling policy. If this is not done, the slogan of faster, more inclusive and sustainable growth will only be a mere rhetoric and not translate into a reality," he said.

Briefing the media on the eve of the NDC meeting on Wednesday, Ahluwalia had said, "Bihar does not meet the existing criteria according to which a state is deemed eligible for special category state. We do recognise that Bihar and some parts do have a special problem and as part of BGRF (Backward Regions Grant Fund), we have Bihar package".

Special category status brings private investment in a state as investors get tax benefits. Kumar had been raising the demand for last six years. He had also handed over a six-page letter to the Prime Minister on the demand to provide the status to Bihar to spur growth.

Arunachal Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand are among the states that have been granted special category status.

"Special Status for Bihar would support the state in multiple ways. The Centre will bear high percentage of (90 percent) of all centrally-sponspored schemes. This will save our commitments of state share in central schemes and help us to take more welfare-based schemes from our saving.

"Further by giving a direct tax break both for Direct and Indirect Tax, it would catalyse the private investment flows. This will in turn open new avenues of private investments leading to certain creation of employment opportunity in the state," he said.

Kumar, who heads a JDU-BJP alliance government in Bihar, strongly favoured the idea of cash transfer in schemes but took a jibe at the Centre for "making a lot of publicity" for direct cash transfers and noted Bihar has been successfully doing so for the last four years for provision of uniforms and cycles to students.

PTI

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