“Job creation is a priority, Bihar needs special help”

Bihar finance minister Vijay Kumar Choudhary says the state needs a special status/consideration/package to get rid of the backward state label, which is reflected in the Center’s statistics despite the concerted efforts of the State. In an interview with Arun Kumar, the minister said efforts are focused on the service sector to increase revenue generation by expanding the basket and addressing the state’s need for job creation, which remains the priority.

How do you see the financial health of the state?

It’s generally good. After the Covid-19 disruptions, things are looking up. In August there was a 23% increase in GST collection compared to the same month last year and that is commendable.

Is Bihar ready to keep the announced job creation promise?

Job creation is the government’s priority, but it should not be confused with government jobs alone. Business and development activities in the state are increasing in the state. Ethanol plants are being installed. All of this will contribute to job creation. When the government talks about job creation, it includes everything, including government jobs. The creation of 10 to 20 lakh jobs does not mean that all of them will be in the government sector.

With a close loan 2.40 lakh crore, is Bihar heading for a debt trap?

All states contract loans. In fact, the loan amount in Bihar is lower than many developed states. Many states have a higher debt-to-GDP (state gross domestic product) ratio. In Bihar, the budget deficit has been kept below 3.5% of GDP and we will reduce it further to 3%.

How do you plan to increase revenue generation? As the five-year period of GST compensation to ensure 14% revenue growth ends in 2022, how will Bihar make up the shortfall?

Efforts are underway to accelerate revenue generation and increase the pool. We are now working on the service sector, hitherto little explored. We are also exploring the possibility of generating revenues from major service providers such as railways, banks, insurance, telecommunications, which operate in our geographical area and also generate profits. We also work on identifying, prosecuting, punishing and collecting the amount of tax owed with penalty from tax evaders.

How will you tackle capital flight and low CD (credit to deposit) ratio in Bihar banks?

This is also an important question. Banks will be asked to provide adequate credit to the needy in the state. The CM has also recalled this at each meeting with the bankers.

Why does Bihar show improved overall growth and low per capita income, which is almost a third of the national average?

Our per capita income is low compared to other states, but when you look at the growth compared to where we were 15-16 years ago, it will show up as a significant improvement. There are reasons for this – firstly, we have the highest population density among large states as well as the third largest population in the country. Due to the high density, there is pressure on natural resources.

Is special status just a political slogan, as the opposition calls it?

It is undeniable that Bihar needs special status to catch up with other states – whether in the form of special status, special assistance, package or special consideration to maintain the momentum so that he can get out of the delay. It is a paradox that despite steady double-digit growth, it remains at the bottom of the development ladder, by the Centre’s own assessment. It has the highest population below the poverty line. If there is no provision at present, it can be done for an aspiring state that has proven itself consistently over the past decade. Bihar can get additional support by guaranteeing a 90% share in central schemes as a special case. Growth in Bihar can accelerate the growth of the country.

But the BJP says the center has given Bihar its full support.

The statistics speak for themselves. The fact is that the Center has gradually withdrawn from the central regimes. The central share has constantly dropped from 90% to 70%, 60%, 50% and in some schemes it is practically zero. Even for flagship Samagra Shiksha Abhiyaan (SSA), Bihar has no funds this fiscal despite spending 3,750 crores so far. Sushil Modi (former CM MP) says that Bihar did not pay interest and hence the amount remained blocked. It’s strange when the state is still waiting for the principal amount.

BJP State Chairman (Sanjay Jaiswal) says Bihar is rising a lot due to decentralization of Center funds.

The devolution procedure is fixed. In vertical decentralization, it went from 32% to 42%, but in horizontal distribution, it was fixed in such a way that Bihar is not a big winner due to strange criteria. We argue for performance as a criterion for decentralizing funds, but the Center takes it as a whole. Our performance should be in line with where we were before Nitish Kumar’s government came to power, not when other states were already way ahead.

Prime Minister Narendra Modi had also announced 1.25 lakh crore special package for Bihar?

People in Bihar are still wondering what happened to this. I’m just presenting the facts. We ask the Center to have special regard for the state, rising above politics. Bihar’s growth will be in line with the Prime Minister’s announcements regarding the focus on Eastern states. Bihar has enormous potential.

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