Central Unconcern

The Centre's own failings in Bihar's under-development are too glaring to be overlooked.

The Centre and the Bihar government have for long played the blame game, pointing the finger at each other for the state's under-development. New Delhi does not provide us enough funds, cries Patna. Patna does not utilise the funds offered to it, claims New Delhi.

HT Image

New Delhi's contention is not without merit, and successive Bihar governments have failed to use development funds fully. However, the Centre's own failings in Bihar's under-development are too glaring to be overlooked.

Development funds
Take some recent figures. The per capita allotment to Bihar under the Tenth Plan is Rs 2533.80 - less than a third allotted to states like Gujarat (Rs 9289.10), Karnataka (Rs 8260.00) and Punjab (Rs 7681.20). While Andhra Pradesh received Rs 3507.60 crore (1998-2000) as "additional Central assistance for externally aided projects in state plans", Bihar just received Rs 306.90 crore.

Allocation under Tenth Five Year Plan »

Bihar also fares poorly in terms of Central grants. It received Rs 4047.30 crore between 2000-02, while Andhra Pradesh topped the list with Rs 9790.00 crore. The state has also been neglected in terms of net loans. It received just Rs 2849.60, as against Rs 6902.20 received by Andhra (2000-02).

Per Capita Grants from the Centre »

"Simple and sound economic logic tells us that when a region is falling behind, not just behind but well behind, it calls for a greater degree of investment in its progress and development," says economist Mohan Guruswamy. "But instead of this, we see that Bihar has been systematically denied, let alone the additional assistance its economic and social condition deserves, but also what is its rightful due.

"From the pitiful per capita investment in Bihar, it is obvious that the Central government has been systematically starving Bihar out of funds."

Coal wars
The Centre's lack of concern is not new; it has been apparent since Independence. One of the earliest points of difference between New Delhi and Patna was the issue of coal tax, writes Arvind N Das in The Republic of Bihar.

For many years, the Centre fixed a very small royalty on coal, in sharp contrast to the royalty on crude oil which benefited petroleum-producing states. Bihar and other mineral-rich states therefore imposed a higher cess.

But the Supreme Court struck down these cesses as illegal and coal-producing states suffered huge revenue losses. The Bihar government was left with no money to even pay its employees, let alone run development projects.

It was only after the then chief minister, Lalu Prasad Yadav, threatened to go on a hunger strike in New Delhi that the Centre increased royalty rates. Even then, it added a clause depriving the state of a share in future price increases.

The bridge of differences
Plans for bridging the Ganga at Patna had been in the offing for almost a century before the bridge finally materialised in the early 1990s. The bridge's potential to contribute to Bihar's development could not be overstated. Its prolonged construction is another example of the Centre's utter insensitivity towards the state.

"The Central government was not at all enthusiastic about bridging the river at Patna and did not approve of the project under the central plan," writes Das. "As such, when in virtual desperation the Bihar government did undertake the construction of the bridge, it was done almost entirely with money drawn from the state's already strained exchequer.

"This led to a suspension for many years of other significant road-building and similar infrastructure development activities and finally, when Patna did get its bridge, it was deprived of a suitable feeder system."