Urges 15th Finance Commission to change parameters of financial assistance
Bihar Government has urged the 15th Finance Commission for making some changes in its formula and parameters for extending financial assistance to the developing States including Bihar so that the revenue receipts and grant in aid for these States is increased.
Briefing media about the charter of demand submitted to the Finance Commission chairman NK Singh on Wednesday evening, Deputy CM Sushil Kumar Modi, who also holds finance department, said that Centre has conceded long pending demand of making 2011 census as basis for the panel’s recommendations instead of 1971 census which was practiced till 14th Finance Commission.
Modi said the Bihar’s share in central taxes has been declining since 12th Finance Commission and it has dropped to 9.66 per cent whereas the share of developed States has been increasing. Bihar got a share in central taxes in 13th Finance Commission Rs 1,72,944 crore which increased to Rs 4,09,489 crore in 14th Finance Commission with an increment of 136 per cent, but at the same time the increment in shares of Punjab, Maharashtra, Kerala, Karnataka and Gujarat was higher than Bihar.
“We have demanded that density of population should be made a parameter instead of total geographical area and forest cover. Bihar’s density of population is higher in the country, 1,106 persons per sq km, and it was a major constraint in moving ahead for developmental projects because land acquisition is a major issue in densely populated areas,” said Modi.
For disaster management too Bihar is getting less central aid as against Maharashtra, Rajasthan, Odisha and Madhya Pradesh. Despite the fact that Bihar faces floods and drought every year it received grant of only Rs 2,591 crore in 2015-20 while the State spent an additional Rs 3,796 crore on disaster management from its own resources.
Bihar also demanded increasing the State share in divisive pool from 42 per cent accorded by the 14th Finance Commission to 50 per cent by 15th Finance Commission.
The Government memorandum to the Commission stated that backwardness of Bihar implied extremely limited fiscal capacity of State Government and it was markedly dependent on the Central Government to supplement its limited revenue receipts. More than three fourths of the total revenue receipts are accounted for by central transfers.
“The quantum of such central transfers is projected by the successive Finance Commissions but the actual transfers often fail to match the projections. There was a drop in Bihar’s share of central taxes which has seriously affected the development activities of State Government and upset the delivery of required pubic services,” it stated.
The memorandum said that in spite of the phenomenon of widening regional disparity, the successive Finance Commissions have been reluctant to recommend higher devolution o poorer States, including Bihar.
“The protagonists of ‘competitive’ federalism try to justify this unfair distribution pattern by maintaining that governance in poorer States is weak and that they are incapable of utilising the resources transferred to them. This indeed is an unfair criticism, especially in the context of Bihar.”