"It is based on sub-group of Chief Ministers and endorsed by other CMs (in the governing council of NITI Aayog) and states also recognised that," Panagariya said.
Referring to 14th Finance Commission's recommendations, the Centre has increased its devolution to states from 32 to 42 per cent, Panagariya said the Centre's ability will naturally decline after giving states more resources.
The NITI Aayog vice-chairman said this while addressing the valedictory session of a five-day international conference organised by Asian Development Research Institute as part of its silver jubilee celebrations.
State's Finance Minister Abdul Bari Siddiqui also rued that change in funding pattern of Centrally Sponsored Schemes has adversely affected Bihar.
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The Centre has changed the funding pattern in 69 CSS from 2015-16 which is adversely affecting Bihar, he said.
"I want to share my pain and problem before the NITI Aayog vice chairman," Siddiqui said during the session.
To a query on whether Bihar should get 'Special Category Status', Panagariya first said the Centre has announced a package. But when pressed further, he said "It is not for me to answer."
"Bihar is on a good growth trajectory.... Bihar is growing at a very rapid pace under the leadership of Nitish Kumar and I congratulate Bihar FM and Nitish Kumar," he said.
It is growing rapidly along with states like Tamil Nadu and Gujarat in post liberalisation era, he said. "It did not take much long for Bihar and Odisha to catch up."
Voters' awareness and increasing competition among states are now putting pressure on the leadership to perform, he said.