Raising an issue relating to the federal transfer structure he maintained it was proving to be the main constraint in the development of poor states like Bihar.

He charged that the cardinal principle of fiscal federalism had not been applied in the case of Bihar, among the poorest general category states, and pleaded for more central transfer for its development spending.

He reiterated the demand for special assistance to compensate for its fiscal disadvantage. To substantiate his points he gave figures to show how poorly Bihar is placed in comparison with other states in per capita income, and development expenditure.

According to him Bihar needs an additional Central transfer of Rs. 25,295 crore per annum to bring it on par with the national average of per capita development spending.

Nitish, who met Pranab just before the Union Budget, said the grant of Rs 8,753 crore extended under the Backward Regions Grant Fund (BRGF) during the 11th Plan was just Rs. 1,750 crore per annum, leaving a gap of Rs 23,545 crore if the principle of equalisation of federal transfer were to be applied.

The Bihar chief minister also said the state suffered in matters of central subsidies and investment of central enterprises. As against its share of 8.2 percent under both heads in proportion to its population, the state received only 2.67 percent and 1.82 percent respectively.

He complained to the Union Finance Minister that the committee set up to examine Bihar’s claims had not submitted its report by the deadline of December 31, 2011. He urged him to expedite the matter and provide for more allocation in the coming Budget and the 12th Plan document.

Besides, Nitish demanded Rs 20,000 crore under BRGF during the 12th Plan and increase in limits for market borrowings.

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