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Planning Commission okays Rs 10, 200 crore plan for Bihar

This is the second year in a row that Bihar's approved annual Plan has been bigger than what had been proposed, reports Amitabh Jha .

india Updated: Feb 15, 2007 22:30 IST

The Planning Commission has approved a Plan size of Rs 10,200 crore for the State for the next financial year.

This is the second year in a row that Bihar's approved annual Plan has been bigger than what had been proposed. It shows an increase of 23.63 per cent over the last Plan (which was of Rs 8250 crore) and roughly 220 per cent of the annual Plan size for 2005-06.

The approval came during Chief Minister Nitish Kumar's meeting with Planning Commission Deputy Chairman Montek Singh Ahluwalia in New Delhi.

Deputy Chief Minister Sushil Kumar Modi, State Planning Board Vice-Chairman N K Singh, Chief Secretary A K Chaudhry and other top officials from the State were also present.

Expressing happiness over the allocation, Nitish said, "Development in Bihar is taking place at a fast pace. If we continue to get the Centre's support, we will soon be able to improve and strengthen basic facilities such as power, roads, water, education, and law and order. The budget proposals focus on infrastructure, flood control, irrigation, roads and power."

The Chief Minister added that the "State would be spending Rs 2399 crore on roads and transport, Rs 816 crore on education, Rs 962 crore on rural development and Rs 851 crore on power."

When he was asked how come the State had been given more than it had sought, Modi, who also holds the Finance portfolio in the State Cabinet, told the Hindustan Times that the increase was based on the general buoyancy in the country's economy, as also on better tax collection and utilisation of funds by the State.

"The Centre's assessment of its tax collections was higher than what Bihar had calculated. As a result, Bihar's share of it would also be greater than what we had factored in our own calculations.
That apart, the state's revenue earnings are also expected to show an upswing. Those were some of the factors responsible for Rest 500-crore hike in Plan size," he explained.

When he was asked about the resource projection to finance the Plan, he said 30 per cent of the needed funds would come from the State's own resources which included its share in Central taxes.

In 2005-6, the state had been able to finance just eight per cent of a much smaller Plan from its own resources.

"The 22 per cent hike in the share of the State's own resources and an over 2.2 times larger base to begin with since the NDA came to power, have been possible because of effective revenue collection efforts," he pointed out.

Central assistance would account for another 34 per cent of the annual Plan.
This is marginally higher - by two per cent - from the 32 per cent level at which it was in 2005-06. The remaining 36 per cent of the Plan size would be financed from borrowings from different sources, including NABARD, small savings, provident fund deposits and the market.

Two years ago, the State had financed 58 per cent of its annual Plan with loans.

First Published: Feb 15, 2007 22:30 IST