Bihar, J’khand clash over GPF share

Ministry of home affairs cancels its previous order to Bihar for releasing Jharkhand’s share of fund

After pension liabilities, Bihar and Jharkhand have now locked horns over distribution of Rs. 3,100 crore general provident fund (GPF) of the employees.

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The issue regarding to distribution of GPF came under dispute, after the Union ministry of home affairs (MHA)-the nodal body to oversee distribution of assets and liabilities between the two states as per the Bihar reorganization act-withdrew its previous order on allocation of one-third of the total amount deducted from the salary of employees till the creation of Jharkhand in 2000.

The MHA had early last month spiked Jharkhand’s hope of getting its share in the GPF by cancelling its previous order on the advice of comptroller and auditor general (CAG) of India on the Bihar government’s plea, that it was a notional amount and had no actual value.

Until the latest order, Jharkhand government was expecting the release of Rs. 1,033 crore from Bihar as its share in the GPF deposits, even though the latter was insisting on parting with only 25% . In keeping with Jharkhand government’s plea and opinion of the Union law ministry, the MHA had early this year asked Bihar government to release the claimed amount to the neighbouring state.

Disputing the claim, Bihar government had approached the MHA and urged it to consult the CAG, as the Bihar reorganisation act was silent on the issue, unlike distribution of pension liabilities, which later formed the basis of annulment of the GPF distribution order.

Justifying the MHA’s revised stand, principal secretary of Bihar’s finance department Rameshwar Singh, said it was a notional amount which could not be distributed.

“Moreover, the CAG is the competent authority to take a call on accounts related matter and not the law ministry,” he contented.

However, his Jharkhand counterpart, Sukhdeo Singh disputed the claim, saying that Jharkhand had paid the GPF to the retired employees from its own fund on the basis of deductions that has been kept with Bihar only. “If the pension liabilities can be shared, why not the GPF amount,” he asked.

Jharkhand officials said, they would approach the MHA to challenge its recent order, which according to them, was issued without consulting or seeking their opinion. “Issuing any order without asking the affected parties amounts to denial of natural justice, against which we would write to the MHA in a day or two,” said one of the senior most IAS officers of Jharkhand. He said, legal options are also open if their pleas were not entertained by the competent authority at the Centre.