Patna: Bihar needs over Rs 7.38 lakh crore for equalization of per capita development expenditure (PCDE) with the national average in the next five years as per the memorandum submitted by the state government to the 14th Finance Commission (FC) here on Tuesday.
Addressing the FC chairman and members, CM Nitish Kumar listed the major demands of the state government, including an increase in the state’s share in the Central taxes from the existing 32% to 50%, and demanded that all centrally sponsored schemes should be fully funded by the Union government. Bihar is the 16th state where the 14-member delegation of the Finance Commission led by chairman Y V Reddy visited to take into accounts the resources and the expenditure before making its recommendations for the government of India on devolution of funds to the states.
Pleading huge deficits in the socio-economic profile of Bihar, the state government also demanded funds to the tune of Rs 63,633 crore for state specific priority areas. The major sectors listed were agriculture road map (Rs 45,267 crore), human development mission (Rs 7,278 crore) and governance reforms (Rs 11,087 crore).
Addressing media persons, principal secretary of finance Rameshwar Singh said the state put forth a strong plea to accord 20% weightage to population, 70% to per capita income distance and 10% to fiscal management in the tax devolution formula. “Different department of the state government put forth their expectations before the members who said they would look into the needs of Bihar and agreed to the concerns raised by us,” Singh said adding, “Last time, Bihar received more funds than what were recommended by the 13th Finance Commission.”
“Either the Union government should completely fund their schemes or it should grant untied funds to the state for specified areas and let the state government formulate the programmes,” Singh said adding that Bihar had also asked the members to increase the fixed fiscal deficit that currently stands at 3%.
A separate memorandum, jointly by the members of various political parties, business and trade bodies and academic institutions drafted by Asian Development Research Institute ( ADRI) was also presented to the finance panel on Tuesday evening. It also demanded restoration of income distance criteria and increased devolution of resources to the states.
Commission secretary A N Jha said that the 14th Finance Commission will finalize its recommendations by October 2014after completing its discussion with all the state governments, the government of India and all the relevant stakeholders.