Bihar, Jharkhand agree on settling pension issue for ₹843-cr, seek details from bank

The decades-old issue of division of pension liability between the two states has been awaiting resolution since Jharkhand was carved out of Bihar in November 2000.

The finance departments of Bihar and Jharkhand have finally fallen back on the banks to extract details of the pensioners to resolve the decades-old issue of division of pension liability between the two states, which has been awaiting resolution since Jharkhand was carved out of Bihar in November 2000, officials familiar with the matter said.

Bihar Vidhan Sabha. (HT file)

As per the latest direction of the ministry of home affairs (MHA), which is arbitrator with respect to deciding assets and liabilities between the two states under the Bihar Reorganisation Act (BRA) 2000, Bihar’s additional chief secretary (finance) S Siddharth called on his Jharkhand counterpart Ajay Kumar Singh in Ranchi last week and agreed to resolve the contentious issue of pension liabilities after matching the Bihar government’s claim for ₹843 crore to settle the issue.

Citing the provision in the BRA to determine the pension on the basis of employees’ ratio, Bihar government had been asking for payment of ₹3,100 crore from Jharkhand, which it claimed to have paid to the natives of Jharkhand who retired from Bihar. However, the Jharkhand government has been disputing the criterion as envisaged under the BRA, and challenged it in the Supreme Court. The Jharkhand government had pleaded that it should be decided on the population ratio, as were followed in many other cases. The court had finally directed both the governments to resolve the issue through mediation by the MHA.

Principal secretary, Jharkhand, Ajay Kumar Singh, said they had agreed to the Bihar’s claim, based up on the population ratio, but the Bihar government needed to authenticate it from the pension payment receipts issued by the banks. “On our part, we have directed the banks to provide the details of pensions paid to the retired officials of in Bihar and Jharkhand,” said Singh.

A senior officer of the finance department in Bihar said it is going to another difficult exercise to extract the details of pension from thousands of bank branches. “Pension was being paid through the banks till 2012. However, after that, the system for pension payment was changed and the district treasuries were made nodal authority to make the payments,” he said.

Bihar government has been making a provision of ₹300 crore in the annual budget for pension payment to the retired employees, who worked and settled in Jharkhand after retirement.