)
Bihar, which has been demanding a special category status, may end up with getting more funds under the Backward Region Grant Fund (BRGF), for which a cabinet note is being prepared.
However, Bihar chief minister Nitish Kumar's demand for a special category status may face hiccups and it is likely to get a tag of backward state instead.
For special category status, a proposal has to be approved by the National Development Council (NDC), a body comprising states and the Centre, unanimously which is long drawn process.
Officials in the know said in the cabinet note under preparation, Bihar could get around Rs 12,000 crore as enhanced funds under BRGF spread over the 12th five-year plan period (2012-13 to 2016-17) while West Bengal might get around Rs 8,800 crore, almost same as 11th-five-year plan period.
Bihar has been getting Rs 1,000-1,500 crore a year since 2002-03 as part of a special package under BRGF. The norms of which may be altered to include all districts of the state getting these funds, officials said. BRGF is used for critical gap filling in infrastructure and human development indices.
The Budget for 2013-14 announced enhanced allocation under BRGF to Rs 11,500 crore for the next financial year (BE) against Rs 10,524 crore in the current financial year (RE).
However, compared to BE of the current financial year, allocation is less. As much as Rs 12,040 crore was initially allocated for the current financial year in the Budget Estimates.
Finance minister P Chidambaram had said in his speech for the Budget 2013-14 that the present criteria for determining backwardness under BRGF are based on terrain, density of population and length of international borders.
"It may be more relevant to use a measure like the distance of the State from the national average under criteria such as per capita income, literacy and other human development indicators," he said. He proposed to evolve a new criteria and reflect them in future planning and devolution of funds.
Bihar had per capita income of Rs 23,435 in 2011-12, against Rs 60,603 as the national average. Its per capita income was the lowest among 32 states and union territories. Its erstwhile part and mineral rich area--Jharkhand- had Rs 35,652 as the per capita income that year.
However, the major demand of Bihar chief minister Nitish Kumar to accord a special category status to the state, which has evoked various kinds of political interpretation amid changing equations, might not come as easily.
Officials said the proposal will have to be okayed by NDC and given the fact that other states, including Odisha, are also demanding the status may trigger a race among states to get the status.
Special category for Bihar would mean alteration of the current formula of 30% loan and 70% grant to 10% loan and 90% grant for centrally-sponsored schemes and external aid, besides fiscal concessions.
A special category status is accorded to a state on the basis of five conditions — hilly and difficult terrain, low population density and sizeable share of tribal population, strategic location along borders with neighbouring countries, economic and infrastructure backwardness and non-viable state finances.
On these grounds, an inter-ministerial group, set up after the intervention of Prime Minister Manmohan Singh, had earlier rejected the Bihar government’s plea to grant it the status of a special category state.
So far, 11 states have been accorded this status: Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand who are remote or hilly areas.
Besides Bihar, BRGF may also include the Bundelkhand region, West Bengal, the Kalahandi-Balangir-Koraput region of Odihsa and the 82 districts under the Integration Action Plan, aimed at tribal and backward districts.
West Bengal has also been demanding moratorium on interest payment for the Centre's loans for three years which may amount to Rs 20,000 crore. The demand has been referred to the current 14th Finance Commission.
