Return
to Story Page
To print: Select File and then Print from your
browser's menu
Vikant Sahay
Patna, July 8: Chairman of the Eleventh Finance Commission AM Khusro has urged the Bihar Government to improve revenue returns from its vast natural and mineral resources.
Delivering a speech before state Chief Minister Rabri Devi here on Wednesday, Khusro said: "You also have one of the richest reserves of natural resources, be it rivers, the minerals or the forests. However, what is more significant is that the state has remained beset, particularly in the recent past, with a variety of social stress and economic slippage."
According to Khusro, Bihar's population below the poverty line has increased from 52.13 per cent in 1987-88 to 54.96 per cent in 1993-94 as against the all-India figure which declined from 38.86 per cent to 35.97 per cent. "This growth in poverty is more conspicuous if we separate the rural population," Khusro told Rabri Devi and her cabinet colleagues.
Bihar has the lowest literacy rate of 38.48 per cent (1991 census) in the country as against the national average of 52.21 percent. "Female literacy rate is 22.89 per cent, which implies that only one out of five women in the state can recognise Hindi letters," Khusro said.
The net state domestic product (NSDP) as a proportion of gross domestic product (at current prices) was 6.01 per cent in 1980-81 and declined steadily to 5.93 per cent in 1990-91 and 3.95 in 1996-97. The trend growth rate of NSDP during 1990-91 to 1996-97 was minus 0.42 per cent, while India's GDP increased at the rate of 5.93 per cent. "There has been a decline in the level of income of the state in absolute terms," Khusro said.
He also expressed concern over the state remaining in deficit on the revenue account despite substantial transfers from the Centre from 1989-90 onwards. "The deficit used to be Rs 600 crore to Rs 800 crore till 1997-98. It crossed Rs 3,000 crore during 1998-99 and the same level is projected in the budget for 1999-2000. The state is expected to have surplus on non-plan account to be utilised for plan schemes. However, the presenttrend of mounting deficits on non-plan account would eat away the plan resources," he said.
Similarly, Bihar's fiscal deficit has increased from Rs 1,000 crore in 1987-97 to more than Rs 4,000 crore last year and in this year's budget. "The ratio of revenue deficit to fiscal deficit is growing, indicating that borrowings, which should be used for long-term investments in infrastructure, are being used for current expenditure," Khusro said.
Criticising the Bihar Government's management of public undertakings and cooperatives, Khusro said: "Total investment in equity is reported to be Rs 642 crore as on March 31, 1997. However, dividend received by the state government has been nil (zero), year after year there has been large-scale delay in finalising the accounts of these undertakings."
Citing examples, Khusro said the accounts of Bihar State Road Transport Corporation (BSRTC) have been finalised only up to 1991-92 while for most other government companies the delay ranges between one to 20 years. Manyhave effectively become a liability on the exchequer.
BSRTC's fleet utilisation in 1998-99 was only 17 per cent, which is the lowest in the country. Total loss in 1997-98 was Rs 400 crore. The corporation has persistently defaulted in payment of motor vehicle taxes to the state government and the overdues stood at Rs 420 crore as on April 1, 1998.
"For instance, in 12 government companies and two statutory corporations, accumulated losses for various periods till March 31, 1997, stood at Rs 769 crore as against investments of Rs 173 crore," Khusro said.
A study on ways of curbing these trends was conducted by the Indian Institute of Cost & Management Studies & Research of Pune and the report was submitted to the Bihar Government in October 1998. The study had recommended the closure of 18 units as well as steps for improving some others.
"The commission would like to know the decision taken by the Bihar Government on the recommendations of this study report," Khusro told Rabi Devi.
The financecommission chairman also criticised the state government for mismanagement of the Bihar State Electricity Board which has been incurring losses of around Rs 2000 crore. "The state government had commissioned a diagnostic study of the power sector with loan assistance from the World Bank. Even though the recommendations of this study were made available in July 1996, no action seems to have been taken during the last three years," Khusro said.
Bihar has projected a Rs 72,996 crore deficit on revenue account during 2000-2005, rising steadily from Rs 13,345 crore in 2000-01 to Rs 22,977 crore in 20004-05. The fiscal deficit has been projected at Rs 14,591 crore in 2000-01, growing steadily to reach Rs 24,774 crore in 2004-05. The five-year total has been put at Rs 80,539 crore.
"Obviously the state has got a tough time ahead. During the course of our interaction with you and your colleagues, let us analyse closely the reasons for this situation and explore the possible ways and means of rectifying it,"Khusro told Rabri Devi.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------