Union govt must reduce number of central schemes to ease financial burden on states: Bihar Finance Minister

Bihar Finance Minister Vijay Kumar Choudhary addresses the press conference after presenting the State Budget 2023-24 during the Budget Session of State Assembly, in Patna on Tuesday.
| Photo Credit: ANI

The Bihar Government will urge the Centre to reduce the number of central schemes so that the financial burden on the states for the implementation of such projects is eased, Finance Minister Vijay Kumar Choudhary said.

Interacting with PTI, Mr. Choudhary emphasised the need for restructuring the Centre-State fiscal relations and granting financial autonomy to the States.

He said substantial addition in the number of centrally-sponsored schemes (CSS) in recent years has put an extra financial burden on a poor State like Bihar.

“CSS force States to reprioritise their spending and puts poor States at a disadvantage. It has been witnessed that large spending by the Centre on many schemes ultimately results in squeezing the Union Government’s allocation. Hence, we have decided to urge the Centre to reduce the number of CSS in the States,” he said.

“This will certainly empower States like Bihar to ensure greater flexibility in the implementation of select schemes and improve the delivery. We will soon write to the Centre in this regard and I will also seek an appointment with Union Finance Minister Nirmala Sitharaman to discuss the issue,” Mr. Choudhary said.

The State Finance Minister said that Bihar’s economic growth rate at 10.98% has been better than the national average of 7%.

“The Bihar Government had projected 9.84% growth during the 2021-22 fiscal. However, the actual growth of the State’s economy was 15.04%, the highest in the last decade. But Bihar is among the poorest States in the country. Hence it deserves special financial assistance from the Centre,” he said.

Accusing the Centre of not releasing adequate funds for the CSS, the State Finance Minister said, “The BJP-ruled Union Government plays politics over several centrally-sponsored schemes, especially in Bihar. It has stopped releasing its share for various schemes in social, education, and infrastructure sectors.”

“In a majority of the CSS, the State Governments are now paying the Centre’s share from their own coffers. At the same time, Bihar is also not getting its due share in central taxes as well,” he said.

“Let me make it very clear that the financial health of Bihar is under stress because of the non-cooperative attitude of the Centre… Why should States spend from their own coffers to implement the plan babies of the Union government?” questioned Mr. Choudhary.

In most of the CSS, the share of the Union Government has now reduced to 50%, which was earlier 75%, he said.

“Ideally, there should not be more than 40 CSS but at present, there are more than 100 such schemes”, the State Finance Minister said.

Echoing the Finance Minister’s concern, senior CPI leader Atul Kumar Anjan alleged that it has become a practice of the NDA government at the Centre to put an additional financial burden on the States by changing the funding pattern of the CSS.

“In certain cases, States are forced to spend more from their treasuries to run CSS. The central schemes must neither put an extra burden on the State nor should be used to target poor States,” he said.

The Grand Alliance in Bihar comprises seven parties — JD(U), RJD, Congress, CPI-ML (Liberation), CPI, CPI(M), and HAM — which together have more than 160 MLAs in the 243-member Assembly.

Senior BJP leader and former State Finance Minister Sushil Modi, however, dismissed the claims of Mr. Choudhary.

“I find his statement very strange. Barring the northeastern States, the funding pattern of central schemes for the rest of the India is same. At the same time, the number of CSS can’t be reduced for certain States,” he said.

“The Bihar Government must strive to fulfill the norms for effective implementation of the CSS by removing the anomalies. The norms are the same for all States. The Centre has allocated a huge amount of funds for the development of roads, highways, airports and several other sectors, including agriculture, tourism, fisheries, science and technology and rural development,” he added.

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