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27/01/2011

Centre may cut plan outlay as Bihar fails to utilize development fund

 

Patna,(BiharTimes): The Planning Commission’s note that Bihar has till December spent only Rs 11,000 crore out of its Rs 20,000 crore (less than 55 per cent) allocated for the financial year 2010-11 has come as a big embarrassment for the Nitish Kumar government, which now claims that there has been mis-calculation in taking into account expenditure and resources available by the state in executing its plan outlay for the current fiscal.


Given the poor utilization of development fund in the current year there is a threat that the plan outlay for the next fiscal (2010-11) could be pruned to Rs 18,800 crore, that is, Rs 1,200 crore less than the current year’s plan outlay.
Though the state government is somewhat defensive it has decided to strongly take up the issue with the Planning Commission arguing that its suggestion to reduce the fund allocation was irrational and erroneous.
According to the Principal Secretary, Finance, Rameshwar Singh, there is no reason to worry. “We are optimistic that we will have a big plan outlay than this financial year. Our own resources have increased,” he was quoted in Hindustan Times recently.
He also said that the government had already worked out a tentative plan outlay of Rs 22,000 crore to Rs 24,000 crore for being approved by the state planning department before being sent to the Centre.
“The approval would depend on how much resources are promised by the Centre as well as state’s own revenue,” he added.
It needs to be mentioned that there has been an upward trend in central allocation to the Nitish Kumar government ever since it came to power in the state––from Rs 8,600 crore in 2006-07 to Rs 20,000 crore in current fiscal. In spite of that the chief minister has repeatedly been accusing the Central government of ignoring the state and giving nothing when north Bihar witnessed a devastating flood in 2008 after river Kosi breached the eastern embankment in Kusaha killing thousands of people.

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