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The Bihar Chief Minister, Mr Nitish Kumar, on Tuesday, met the Finance Minister, Mr Pranab Mukherjee, and sought the status of ‘special category State’ for Bihar.
A ‘special category State’ status will help Bihar attract private investment and reduce the burden on the State, where currently the Government is the predominant engine for development, Mr Kumar said.
He also expressed concern over the 13th Finance Commission award and pointed out that Bihar’s share of the divisible pool had come down from 11.028 per cent in the 12th Finance Commission to 10.917 per cent in the 13th Finance Commission.
“The 13th Finance Commission’s award has seriously undermined the concept of equity and nationally comparable public services in the State. This deficit must be compensated with special grants.”
In a memorandum to Mr Mukherjee, Mr Kumar sought an enhancement in the borrowing ceiling for Bihar for the next financial year (2011-12).
He noted that a strict adherence to the fiscal deficit limit of 3 per cent for financially disciplined states such as Bihar, limits its market borrowings at a time when it needs the resources most.
“The States with low income, but revenue surplus, should be given a chance to avail more borrowings for increasing their developmental expenditure,” Mr Kumar said.
The Bihar Chief Minister also said that the State requires Rs 3,145.43 crore in 2011-12 for completing ongoing schemes under Backward Region Grant Fund (BRGF).
Mr Kumar also sought a special annual BRGF assistance of Rs 4,000 crore during 12th Plan for the State, arguing that Bihar’s historically large development deficit needs to be shared between the Central and the State Governments.
He urged the Centre to expedite the decision regarding Bihar’s dues estimated at over Rs 5,000 crore to be received from Jharkhand according to Bihar Reorganisation Act, 2000.
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