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(BiharTimes) Bihar government has pinned very high hopes on 12th plan going by the numerous statements of the Chief Minister and his deputy. However, it seems 12th plan would be meeting expectations of state only halfway, that too mostly in semantics than in substance. While 12th plan is generous in accepting suggestions on procedural aspects as suggested by Bihar government, it is not so generous on economic and developmental needs of the state. Thankfully, there are some positives on economic and developmental considerations as well. |
Plan Size of States in 12th Plan
- Proposed plan size of Bihar under 12th plan is Rs 228452 Crores. It is way behind Andhra Pradesh at Rs 342842 crores, UP at Rs 326953 crores, Gujarat at Rs 283623 crores, Maharashtra at Rs 275000, and Karnataka at Rs 255250 crores. All India allocation is at Rs 3716384 crores.
As can be made out from the preceding paragraph, Bihar is going to be sixth by overall plan size behind AP, UP, Gujarat, Maharashtra and Karnataka during 12th plan. Despite higher central assistance, Bihar is still lagging behind its rightful place in this pecking order. This is primarily due to inadequacy of state resources and also due to inadequacies of planned expenditure by PSEs in the state.
Plan size of Bihar is 6.15 percent of total all India plan size which is only about 3/4th of over 8.3 percentage population share. In other words, this implies per capita plan size of Bihar is at 3/4th of national per capita plan size during 12th plan. This should be a major concern for the state, if it wishes to catch up with rest of India. Given its backwardness its plan size should somehow better National per capita plan spending.
Bihar government should have tried securitization of revenues to generate more funds to support a much bigger plan size if central government is not willing to support bigger plan size. Annuity funding, arranging fund for investment by providing annuity guarantee etc could be some innovative measure which state should have tried instead of plain vanilla VGF based PPP. Failure to go for a bigger plan size is attributed both to lack of vision and innovative thinking on part of state government as well as on central government’s failure to take remedial action for years of marginalization of Bihar.
Provision of Resources for Inclusive Regional Growth
- BRGF is now going to include only 200 most backward districts and 1500 sub districts (blocks). Allocation is proposed to be increased from Rs 25000 crores to Rs.46000 crores. Additionally, it proposes a 'Composite Backwardness Index' as a criteria for allocating resources among the aforesaid districts and sub districts for proportionate devolution of these resources. This will result in higher allocations to more backward districts / sub districts. Pruning of backward districts list and introduction of composite backwardness index would mean better direct intervention.
- IAP will continue with structural changes for implementation during 12th five year plan. Elected representatives are to be involved in planning now unlike earlier case of DM, SP, and DFO taking the decision.
- LWE road development program will be completed during 12th plan with balance allocation. BADP allocation has also been increased. Some benefit will accrue to Bihar under these schemes.
- A state specific special plan assistance of Rs 30,000 crore is also proposed. This shall include Bihar Special Plan, West Bengal Special Plan- Rs 8750 crores (already disbursed 2903 crores), Budelkhand Package- 3,650 crores (1921 crore already released), Kalahandi package (was 600 crore in 11th, is proposed to be increased in 12th plan). Though, specifically not mentioned, package for Bihar is likely to be of Rs 4000 crores per year (Rs 20,000 crore over plan period) having regards to mentioned allocation for others.
Relevant Policy Reforms Proposed:
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Planning Commission has agreed to recognize Habitation as the unit of planning instead of Revenue villages as proposed by Bihar government.
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It has also agreed to introduce intra scheme resources allocation flexibility in certain cases as demanded by Bihar
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Plan talks about opening new medical colleges. However, it does not specifically talk about any new medical college under central sector for Bihar. Multi speciality hospital in districts and medical colleges linked to district hospitals has been proposed as a general principle across country.
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Pruning and clubbing of plethora of central schemes to ‘Omnibus Schemes’ as demanded by Bihar and also by B K Chaturvedi Committee has been accepted.
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Demand for Direct Cash Subsidy of Government of Bihar has also figured among new reforms proposed in the plan. Government has already made a public pronouncement on its implementation schedule.
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Demand for state role in identifying JNNURM cities has also been incorporated under the 12th plan.
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20% of major irrigation plan outlay is for new projects in states which are underachiever. Bihar being an underachiever can be a major gainer if it can demonstrate its capability to successfully execute major irrigation projects. 60% of the funding is earmarked for completing ongoing projects in order of priority. No specific relaxation is mentioned for AIBP norms as demanded by Bihar but may be implied in earmarking of funds for new projects in underachiever states.
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Endorses approach of flood mitigation in Bihar.
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Plan panel talks of introducing PPP scheme in education, healthcare among other sectors. Under these schemes, apart from a VGF grant for initial capital investment, recurring revenue has been sought to be guaranteed with specific safeguards. One such proposed scheme for education is to open 2500 PPP mode schools, where government will provide per student revenue at the same rate as it spends on KV students for a maximum of 1000 students per school. A regulatory body is proposed to monitor the quality standard as well. Over 60 percent of the students in such schools need to be from underprivileged section for which government will bear the expenditure in aforesaid manner. Additionally, it will provide 25% of recurring tuition fee per supported student towards infrastructure spending.
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In Science and Technology, CSIR talks about setting up its new facilities in states which are underrepresented. However, DBT is not so charitable. It plans to focus on setting up more facilities in its choicest four clusters at Mohali, Delhi, Hyderabad and Kalyani only. DAE will set up new facilities at Delhi, Hyderabad and Vizag, Has decided to ignore Bihar yet again. DoS does not talk of any such plan.
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In higher Education, there is a plan to upgrade ISM Dhanbad to IIT, NIFFT Ranchi into Institute of National Importance and Bengal Engineering College to IIEST. No such commitment for deprived Bihar though. This despite Bihar being under represented in number of central institutes compared to other large category states even after allocation of two central universities. However, plan documents recognize such under representation in certain states in a generic reference and also the need to make up for the same.
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Bihar might get a Metro System of its own though not specifically mentioned. With Population of Patna Urban agglomerate at 2.495 Million, Patna may very well qualify for the same as suggested criteria mentions 2 million populations as the benchmark. There can be a bit uncertainty here as Patna (not urban agglomerate) on its own has population of only about 1.7 million.
Significant Omissions:
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No Support or suggestion for Special State Status for Bihar.
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Plan document talks extensively about co-relationship between lack of infrastructure and low per capita income (PCI). Bihar scores only 78.79 (ranked 20) in 2008-09 down from 81.33 (ranked 19) in 1998-99 on infrastructure index. UP has improved from 86 to 101 on this composite infrastructure index. Yet, plan panel does not talk about any dedicated infrastructure development program for poorest states like BIHAR and Jharkhand (rank 21).
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It has completely glossed over the demand of Bihar for Raxaul to Paradip ‘Eastern Economic Corridor'. It talks only about Delhi Mumbai Industrial Corridor and upgrading more roads in DMIC corridor. Document makes only a passing reference to port connectivity to hinterland without any specific program for the same. Also, ignores demand for a dedicated port on eastern coast as put up by Bihar government.
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In rerun of Freight Equalization Policy, it now talks about setting up manufacturing units near major markets rather than near sources of raw material. Steel Investment Regions are proposed near Markets (though it also specifically mentions one such area in mineral rich eastern regions).
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No specific commitments on increasing number of Higher Education Institutes, Specialized Institutes or Research Institutes in Bihar. This despite the fact that a whole host of such institutes has been proposed to be set up by various ministries and departments under the 12th five year plan. No reference has been made to demand for setting up “Multi Agency Multi Institutional International Research Complex , Nalanda’
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No proposal for promoting any specific economic activity in relation to Bihar except for Agriculture. No talk of increased infrastructural and institutional support for sunrise tourism sector, food and agro processing sector or any kind of industry regions or clusters in Bihar. Read this with response to queries of Mr N K Singh in Rajya Sabha. It seems federal authorities has no vision or plan for industrial or economic development of Bihar. Most of the support to Bihar remains focused on giving out doles. No specific proposal has been made to strengthen state economy in a sustainable manner. Authorities seem to be either unconcerned or short of ideas when it comes to policy intervention in regards to state economy. No plan like Delhi Mumbai Industrial Corridor (DMIC for eastern region) or Bengaluru - Chennai industrial Corridor ( next on anvil as discussed with Japanese PM last time).
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No Green Field Airport for Bihar out of Proposed Five under PPP Mode.
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No major plan specifically designed for promoting green revolution in eastern region of India.
There is a lot of dichotomy between appreciations of issues post detailed factual analysis to and the remedies proposed for such issues. Most of these omissions reflect that plan panel has not followed a deductive remedial action plan. While it states that there is a direct co-relationship between per capita income and infrastructure development, it does not propose any specific infrastructure development program for backward eastern region. Similarly, while it talks about need for setting up more institutes in underrepresented states, it proposes new institutes in those states which are already having over representation. It talks about industrial backwardness of east, but its intervention in form of investment regions, manufacturing regions, industrial corridor etc are targeted at affluent south and west. It does not talk about a policy to promote even those economic activities in Bihar where state has inherent competitive advantage viz. Tourism, Food processing Industry, Handicraft Industry, and Leather Industry etc. While planning commission talks eloquently about correcting regional imbalances, it does not care to bring per capita planned expenditure in Bihar on par with national average. This is far from the compelling need for positive discrimination in favour of laggard Bihar.
This is time for political leadership of Bihar to deliver what Bihar deserves. Much hinges on deliberations leading to NDC meeting on 27th of December 2012 and also on the pronouncement made during the meeting. Mr CM and DY CM it is time for you to pad up now.
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