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| Package for Bihar | | Politics behind Central largesse | |
THE UPA government has an
nounced special grants for
three states, including Bihar, provoking criticism from various quarters. The Rs 12,000-crore package for Bihar is seen as an attempt to buy the political loyalty of Chief Minister Nitish Kumar, who is threatening to part ways with the BJP if Narendra Modi of Gujarat becomes its prime ministerial nominee. Uttar Pradesh has been given Rs 4,400 crore in an apparent attempt to stop Mulayam Singh Yadav of the Samajwadi Party from drifting away. Orissa has got just Rs 250 crore. This pick-and-choose method of Central fund allocation is contrary to Finance Minister P. Chidambaram’s observation in his budget speech that there was a case for changing the Gadgil formula so that the backward states could get more funds.
Though Information and Broadcasting Minister Manish Tiwari has denied a political motive behind the package to Bihar, there is no other reason for the sudden Central largesse to the Opposition-ruled state. In fact, Bihar has more funds than it can spend. The latest state budget shows the government has Rs 7,000-crore revenue surplus. A year earlier the government had Rs 8,000-crore surplus. When Nitish Kumar held a rally in Delhi recently, he had a well thought-out goal to shift the focus from high growth to backwardness since critics had started finding loopholes in Bihar’s development model. If the Centre had tweaked the Gadgil formula to reward backwardness, many more states would have become eligible for Central funds. Given the precarious state of its finances, this would not have been practical.
Central aid should not be handed out arbitrarily. The Finance Ministry under Pranab Mukherjee had tried to find ways and means to help the debt-stressed states of Punjab, West Bengal and Kerala. Mamata Banerjee has vociferously pleaded West Bengal’s case for Central relief. Because of its infighting and reluctance to rein in subsidies, the Punjab leadership lost an opportunity for debt relief a few years ago. The Akalis spend their energies more on seeking clemency for convicted terrorists than securing a bailout for the state, which reels under a Rs 1 lakh crore debt. |
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