Politics of money is at play with the UPA government set to double special plan allocation for Bihar considering its backwardness in the 12th five year plan period. The move is apparently aimed at wooing Bihar chief minister Nitish Kumar's Janata Dal (United), a NDA ally, to the UPA wings in the coming months.
The state would be getting more money under the rechristened Backward Regions Grant Fund (BRGF) to be implemented from the next financial year aimed at dealing with backwardness in an effective manner.
Bihar would benefit as parameters to define backwardness are being reworked for the new BRGF to holistically deal with socio-economic deprivations. A senior planning commission functionary said that the government would measure backwardness on parameters such as illiteracy, unemployment, access to electricity and education using the 2011 Census.
The wider ambit to define backwardness would result in Bihar getting around Rs. 12,000 crore in the 12th plan period as compared to Rs. 5,568 crore the state got in the 11th five year plan.
Of the proposed allocation for 12th plan, Bihar has already received around Rs. 1,500 crore in the first year of the plan --- 2012-13 --- and would be getting Rs. 2,000 crore in the second year --- 2013-14. "The remaining amount (Rs 9,500) would be disbursed in the remaining three financial years of the plan," a planning commission functionary said.
The panel, which decides money allocations for BRGF, has submitted a Cabinet note on Bihar's special plan for the 12th plan to Prime Minister's Office for final approval.
The money being provided is still much less than Rs. 20,000 crore demanded by Kumar to deal with backwardness but may be a face-saver considering that it would be highest allocation for any state under BRGF. West Bengal, another state have special plan under BRGF, is expected to get a meager increase in allocation for 12th plan.
The plan panel sources, however, clarified that there is a huge difference between special plan under BRGF and special backward category state as sought by Kumar.
Under special plan, the Central government gives a certain amount of money for districts selected under BRGF. The special category states get exemption from imposing of Central taxes on industry for a limited time period and the states have to provide only 10% of the matching grant to utilise Central financial assistance.
"The monetary benefit under special category would be higher than under special plan," the official said.