With an eye on the upcoming assembly elections in Bihar, Prime Minister Narendra Modi on Tuesday announced a massive Rs 1.25-lakh-crore “development package” for the state with a history of backwardness but has shown some signs of catching up with the better-off states in recent years, reports fe Bureau in New Delhi.
Unlike such packages given to states in the past, Modi’s package did not include any special grants but was a compilation of direct budgetary investments envisaged by the Centre, as in many road projects, and also PSU and public-private partnership projects in the pipeline. Modi also listed out an additional around Rs 41,000 crore being invested in the state which include over Rs 8,000 crore left unspent by it from the 2013 allocation. The Centre’s package has a special thrust on developing roads network in the state, the lack of which was seen as a major obstacle for its economic development.
About Rs 68,600 crore or 55% of the proposed investments would be for building 2,775 km of highways, 22,500 km of rural roads and bridges such as on the Ganga. The plan also includes Rs 21,476 crore investments in petroleum sector projects, mainly to be implemented by central PSUs. The expansion of the Barauni refinery, a new petrochemical plant, gas pipelines and new LPG plants were also listed by the prime minister.
The package also includes doubling and tripling of 676 km of railways tracks, electrification of 574 km of railway lines, electrification of villages, construction of a new airport in Patna and establishment of a mega skill university. As no timeline has been given, the projects are envisaged to be implemented during the tenure of the Modi government, sources said.
Bihar, despite lacking a special-category state tag, has long enjoyed a privileged status when it comes to tax revenue devolution and transfer of Plan and non-Plan funds from the Centre. While the 11 special-category states received less than a fifth of all central transfers during the 13th Finance Commission (FC) award period, Bihar’s share was as high as 9% or roughly half of the combined receipts of all of them. Bihar hasn’t lost much even under the 14th FC which increased the tax devolution to the states in the divisible pool by 10 percentage points to 42% and revised the criterion for horizontal distribution of funds. As against 10.9% in FY15 under the 13th FC’s formula, the state would get 9.6% in FY16 in central taxes under the FFC formula.
Modi laid foundation stones of 11 national highway projects in the state. He also inaugurated 22 skill training centres, and unveiled the foundation stone for a regional vocational training institute for women in Patna. The PM said the projects being launched would transform the face of Bihar in the days to come.
The Bihar government has been demanding special category status, which the Centre had rejected earlier saying it did not meet the criteria. Amid a high-stakes assembly election, the BJP is banking heavily on the Centre’s development package to wrest power from Nitish Kumar, the incumbent chief minister. Kumar, who is fighting the assembly elections slated for October-November with one-time arch rival Lalu Prasad, has been attacking Modi on the issue of special package for Bihar. Bihar had got two packages of Rs 10,000 crore and Rs 12,000 crore, respectively, in 2003 and 2013.
Earlier this year, the Centre announced a development package of Rs 850 crore for Andhra Pradesh, to offset its perceived resource disadvantage due to the carving out of Telangana from the undivided state.