Days after returning back to power, Chief Minister Nitish Kumar opened front against the Centre and accused it of doing sheer injustice with the backward States. Terming the increase of 10 per cent tax revenue devolution as per the recommendation of the 14th Finance Commission as an eyewash, he said the States like Bihar will be a sufferer because other Central grants would be discontinued.
Nitish said Bihar will be deprived of the Backward Region Grant Fund (BRGF) which had been provided by the Centre under the Bihar Reorganisation Act, 2000, which came in the aftermath of bifurcation of Bihar.
“The discontinuation of BRGF under Bihar Reorganisation Act will be a violation of the law and we will be compelled to move to the Supreme Court if this special grant is discontinued,” Nitish said on Wednesday after chairing the first Cabinet meeting. He further said that Bihar and other States would also be denied the Central share in the Centrally-sponsored projects.
The CM said he received a letter from the Prime Minister on Tuesday and a call from the Finance Minister Arun Jaitley on Wednesday. "I am writing to the PM to continue the special assistance to Bihar," he added.
Nitish said that the officials and economists are studying the Finance Commission's recommendation. It is estimated that as per the recommendations, Bihar which had been getting 10.9 per cent of the tax revenue will get only 9.6 per cent, a shortfall of 1.3 per cent and there would be cut in the need-based grants under the plan.
"We welcome the 10 per cent hike in tax share but we are disappointed over the cut in State's share in Central taxes. It is a matter of serious concern and it will certainly affect our total Budget and GDP," the CM said and added that the recommendation of the Finance Commission is not unanimous but there are notes of dissent by the members who raised similar concerns. He also said that Bihar and UP will be major sufferers as the Budget size of these States would be adversely affected. The hike in tax share would only help the developed States, he claimed.
Bihar has been getting Rs 12,000 crore under BRGF and Rs 15,000 crore under Central share. But now there is plan to merge all these grants in the devolution of the funds, he said. "We will get less in 2015-16 than what we got in 2014-15 if other grants are stopped. The so-called windfall is disappointing for us and we will protest against this," Nitish said.