In election year, extra funds for Bihar, Bengal, heartland states

Conceding to repeated demands from heartland states for additional financial assistance, finance minister P Chidambaram on Thursday declared his intention of reframing the definition of backward regions, in a way that is likely to help politically critical states like Bihar and areas such as Bundelkhand.C

Conceding to repeated demands from heartland states for additional financial assistance, finance minister P Chidambaram on Thursday declared his intention of reframing the definition of backward regions, in a way that is likely to help politically critical states like Bihar and areas such as Bundelkhand.

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Chidambaram tripled the allocation for the Backward Regions Grant Fund (BRGF), a dedicated endowment for these regions, from R4,000 crore last year to R11,500 crore, setting aside an additional R1,000 crore specifically for 82 districts spread across Bihar, Chhattisgarh, Jharkhand, UP, Andhra Pradesh, Orissa, West Bengal and Madhya Pradesh affected by Naxalism.

Bihar, Bundelkhand and the Kalahandi, Bolangir and Koraput (KBK) regions of Orissa — which have been a key focus area for Congress vice-president Rahul Gandhi over the past few years — along with West Bengal will also get state-specific allocations from within the BRGF, Chidambaram said.

The criteria used to determine the amounts handed to different states under the fund will change from geographic and demographic parameters like terrain, density of population and length of international borders, to the gap in socio-economic indicators between states and national averages.

The move comes ahead of the 2014 elections, in which these eight states will account for 279 out of the total 543 seats. West Bengal and Bihar have been demanding special packages to help them ride over a fund crisis.