Patna,(BiharTIMES): More one follows developmental activities in Bihar, the more one gets befuddled. While there is no denying the fact that the state has achieved some important milestones and remarkable successes in its development journey, however, one cannot be happy with the pace of this transformational process. While state has achieved some notable successes, it has a number of glaring failures as well. While success to failure ratio has improved marginally, it is by no stretch of imagination considerable enough. It is certainly not even up to the optimized potential of ramshackle state administrative machinery. Performance on MNREGA, Higher Education, Irrigation Projects, Urban Administration and Industrial Infrastructure ,to name a few, leaves a lot to be desired. Not to compare with developed states, Bihar is lagging far behind even its peers in the underdeveloped categories, with exception of Jharkhand and in some cases, perhaps, UP.    There lies the failure of state government.   State has got miles to go before it can even say it has started performing. 

Claim of JDU to champion the developmental cause of Bihar rings quite hollow. Rousing welcome to Rajan Committee report only exposes how little understanding JDU has of the various dimensions associated with any economic policy. More worrisome is their lack of knowledge about the things happening in economic ministries and planning commission.  They could have better appreciated Rajan committee report for its real worth had they seen Pranjul Bhandari’s paper on developmental indices. Recent paper of Parnjul Bhandari, which is hosted on planning commission website and predates setting up of Rajan committee, can be an eye opener (http://planningcommission.nic.in/reports/articles/article_state.pdf ). These were more broad-based indicator of developmental status of various states. Even Rajan committee could have done better if it had used Pranjul Bhandari Indices appropriately to recommend allocating share of their budgets by various Infrastructure Ministries, Education and Health Related Ministries.  These indices could have been very useful and productive from the perspective of Bihar had Rajan committee also chosen to rely on them rather than go scouting for a new index.    Indices developed by Parnjul Bhandari on infrastructure, could especially be useful for economic development of a state like Bihar. 

Coming to insincerity in demand of special status by Nitish, one can very easily see through the mere politicking.  On the one hand, state government is claiming to be putting more pressure on central government for additional developmental funds, and claiming to be succeeding too; on the other hand it seems to be losing heavily in actual fund flows. Kumar should better pay attention to the ‘other aspects’ also. Tunnel vision of excessive focus on politically encashable ‘Special Category Status’ should not be at the expense of lateral thinking on mopping up more development resources. While state appears to be going begging for more funds, it is surreptitiously being deprived of even the funds which were allocated to it in the first place. An example case is re-appropriation of funds for various projects in Septemer 2013 done by Indian Railway (see table & link below), even when Nitish kept on grumbling about lack of funding from railways for Digha & Munger bridges for public consumption.  .  I sincerely hope that support of Congress has not come in lieu of sacrificing these allocations which congress is now trying to divert to its greener pastures perhaps. No amount of platitudes like the one in form of Rajan Committee Report can compensate for these real losses to Bihar. Since CM Bihar might not have time for such details, I would expect his advisors to take note of such happenings and brief him appropriately in these matters.

http://www.indianrailways.gov.in/railwayboard/uploads/directorate/works/pdf/2013/2013-B-106.pdf

Again, it seems Bihar government continues to be short of ideas on meaningfully using MNREGA scheme funds. Special status or no special status, central contribution will continue to be 90% in MNREGA, PMGSY schemes as also NGRBA. Allocations are also not going to change under NRHM, MDM, RTE, Food Guarantee or JNNURM etc on grant of special status.  We may continue to talk about approval for fresh projects, but what good it is if there is no fund allocation even for the pending projects?  It seems the culprit is Bihar government in most of the cases as it is unable to utilize funds sanctioned for these schemes year after year. For example, I do not see any allocation under PMGSY till date for current year (http://rural.nic.in/daily/sancrelease/repschemebt.asp?dept_code=rd&scheme_cod=36&financial_year=2013-2014 ) perhaps due to existing balances from previous years. Even the allocation under MNREGA for Bihar continues to be considerably low at Rs. 1405 crores as against Rs 4413 Crs for Andhra Pradesh and Rs 1809 crores for Rajsthan in current year.
 ( http://rural.nic.in/daily/sancrelease/repschemebt.asp?dept_code=rd&scheme_cod=26&financial_year=2013-2014 ) .
I sincerely wish that Nitish will also enter into a constructive debate with SuMo on the benefits of ‘special category state’ proposition for Bihar. It will serve to clarify many aspects whereby central funds get transferred directly or indirectly to states.  It is the indirect fund transfer where Bihar loses out the most (with about 3% share overall) and not direct transfer (averages above 8.5%).  Unfortunately, none of the formula driven devolutions delve into this aspect. Indirect fund transfer through ministries is where energy of Bihar policymakers should be focused.

 Well! Nitish can do Bihar and underdeveloped states a big favour, if using his newfound bonhomie with Congress; he can make union ministries accountable for their less spending in underdeveloped states. For this, I would advocate that Union Budget should also present a budget for underdeveloped category states separately on the lines of budget for North Eastern States or SC/CT Budgets.  This will make indirect fund flows much more equitable to underdeveloped states. Further, he should demand that CPSUs do seed new industrial units in Bihar using their huge cash surpluses. Additionally, I hope he will continue to closely monitor performance of Banks on CD ratio and Financial Inclusions, apart from his own government’s performance on plan side.  Further, these measures should be supplemented by checking huge capital flight out of Bihar happening on account of Higher Education and Tertiary Healthcare by improving these two key sectors in the state on highest priority. If the state government cannot attract capital inflows, at least, it should take steps to reduce capital outflows by prioritizing its agenda appropriately. Thus, Bihar has got to script its central funding story better than it has done till now.