PM Modi's Rs 1.25 lakh cr package a myth to influence people: Nitish Kumar writes to Jaitley

Patna: Amid charges flying thick and fast over Centre’s Rs 1.25 lakh crore package to Bihar ahead of Assembly polls, Chief Minister Nitish Kumar on Tuesday once again trashed the central aid as “packaged myth” of old schemes to influence the electorate. [caption id=“attachment_2425940” align=“alignleft” width=“380”] Bihar Chief Minister Nitish Kumar. AFP[/caption] Kumar expressed his hard-hitting views on the special package in a letter to Union Finance Minister Arun Jaitley sent on Tuesday. It was in response to Jaitley’s letter to Kumar dated 28 August which reached CM’s office on 4 September. “It is clear that this package for Bihar announced just before elections is nothing but well conceived packaged myth devised to influence people,” Kumar said in the letter, a copy of which was made available to the media. The special package by the PM for Bihar announced at Ara on 18 August is being highlighted daily in newspapers in Patna which makes it clear that it would find an important place in the campaign of the BJP-led NDA in the state poll. Kumar pointed to lack of hectic action in the Union Finance Ministry to raise funds for it to buttress his charge. “Your ministry is not seen to be scrambling to find resources, as if no additional allocations are to be provided from within the Union Budget,” he said in the letter. Kumar also appended a detailed table to highlight the status of projects included in the special package. Besides tearing into the PM’s special package, Kumar in his missive to the Union Finance minister also contested the central government’s claim that Bihar is going to benefit a lot by increase in tax devolution as per recommendations of the 14th Finance Commission. The Bihar CM who has been making a sustained attack on the PM’s special package, sought to evaluate it on four fundamental parametres. Asking the “actual size” of the package, Kumar highlighted that a large chunk of the package up to the tune of Rs 1.08 lakh crore of the total Rs 1.25 lakh crore was coming out of the funds already promised to the state for on-going and pre-approved development endeavours and schemes. “Same figures are now being passed off as new fund or investment,” he alleged. Further, citing example of road sector, he said, “This package claims to earmark an additional Rs 54,713 crore for 41 projects for building highways, bridges & rail over bridges. But,reality is that much before this announcement, 37 out of 41 projects worth Rs 47,553 crore were already approved or approved in principle between 2007-2015.” Secondly, the Chief Minister asked the “exact contribution of the Government of India vis-a-vis other stakeholders?” “Is the government of India taking sole responsibility vis-a-vis this incremental resource or are there other stakeholders who will be contributing to this?” he said. “Also there is no mention or acknowledgement of state government’s contributions, either as part of monetary share or contribution that of land for any of the proposed projects,” Kumar said. Citing example of the thermal power project to be taken up by SJVN (Satluj Jalvidhut Nigam) at Buxar at an estimated cost of Rs 10,000 crore, he said, “SJVN, a Public Sector Undertaking (PSU) has not released an investment proposal against this project till date and it is not clear which all stakeholders it will involve. Is Government of India treating the investment clearance as its investment in the state?” Further he asked, “What is the time period within which benefits of this package would be accrued? Would this money accrue to the state in 1 year, 5 year or how many years?” “In your letter you do not mention that it will be implemented in phased manner, but without exact timelines, the package appears to be a post-dated cheque with no certainty of encashment,” Kumar said in his letter to Jaitley. In the final point in his letter, Kumar asked, “What are modalities through which these benefits will be realised and reach the state?” “Will it be given to the state government? Will it be routed through a third party? Who might those be?” Kumar said flagging concerns. Kumar also alleged violation of spirit of “cooperative federalism” by not consulting state government. “If special needs of the state were to be really addressed and met, as is envisaged in Bihar State Reorganisation Act, 2000, the views of the state government would have received its due weightage along with views of Union government,” he said. Rubbishing the special package, Kumar said “instead of these piece-meal measures, the Union government should grant special category status to Bihar, if it genuinely desires to address backwardness of the state in a holistic manner.” On extending additional investment allowance and higher additional depreciations for investment in backward areas as art of the package, Kumar said, “All 38 districts in the state should be notified as backward districts, the proposal for which has already been sent to the central government.” At present, 21 districts of Bihar have been declared backward. The Chief Minister also contested Centre’s claim that 14th Finance Commission would accrue benefits to Bihar. “A detailed analysis of the recommendations of the 14th Finance Commission and the Central Budget 2015-16 reveals that while funds being transferred from pool of central taxes to the states have been increased, on the other hand there has been a substantial reduction in the budgetary support provided by Union government to the states for implementation of state plan schemes,” Kumar told Jaitley. The central government in 2014-15 budget had transferred to the states a sum of Rs 3,82,215 crore as share of central taxes. In 2015-16 now the central government is transferring Rs 5,23,958 crore, which is an increase of Rs 1,41,743 crore over the last year’s transfer, he said. The share of funds for Bihar has witnessed a reduction from 10.9 per cent to 9.665 per cent, he said. “It is incorrect to say that the state government is going to receive Rs 2,25,198 crore more in 14th Finance Commission award period as compared to 13th Finance Commission because this so called increase has to be viewed as a share of the total available pool,” the Chief Minister said. The total divisible pool for states in 13th Finance Commission was Rs 14,55,430 crore out of which Bihar received Rs 1,58,385 crore which was 10.9 per cent. Now the total divisible pool in the 14th Finance Commission is Rs 39,48,187 crore and Bihar will be getting Rs 3,83,583 crore which is 9.7 per cent, he said. “The total divisible pool in the 13th Finance Commission period (Rs 14,55,430 crore) over the 12th Finance Commission period (Rs 6,13,112 crore) was 2.37 times whereas the increase in Bihar’s share was 2.34 times. “But, now if we see the increase in 14th Finance Commission period over the 13th Finance Commission, the increase is 2.71 times but the corresponding increase in Bihar’s share is only 2.42 times,” he said. “Bihar actually stands to lose because even when the overall pool has increased by 2.71 times in the 14th Finance Commission, our state’s share is only increasing by 2.42 times. If our share would have increased by 2.71 times, we would have got Rs 45,000 crore more,” Kumar said. PTI