Praise & tips on Montek lips Hope for fewer central schemes -- ANAND RAJ

Nepal Prime Minister Baburam Bhattarai and Planning Commission deputy chairperson Montek Singh Ahluwalia greet each other at the summit at SK Memorial Hall in Patna on Friday. Ahluwalia praised the growth in the state. Picture by Deepak Kumar Patna, Feb. 17: Words of praise and advice were on Planning Commission deputy chairperson Montek Singh Ahluwalia’s lips today. Bihar got a pat from him for achieving good growth rate over the past five-six years with proper utilisation of central funds. Soon after, he advised chief ministers, including Nitish Kumar of Bihar, not to offer concessions (in tax rate) but emphasise on developing the infrastructure either through public spending or through public-private partnership to boost industrialisation. “No doubt that inter-state differences in terms of growth has narrowed down. Even the states, which were not doing well, are now registering a good growth rate. Bihar has also achieved a good growth rate over the past five-six years. If Bihar continues with this growth rate for the next 10-15 years, it will have its positive impact on per capita income,” Ahluwalia said at the “Global Summit on Changing Bihar, 2012” in the state capital. Ahluwalia, along with Reserve Bank of India governor D. Subba Rao and London School of Economics professor Nicholas Stern, also the member of House of Lords in UK, participated in a plenary session on the inaugural day of the three-day summit. Retired bureaucrat and Rajya Sabha member N.K. Singh moderated the session titled “Strategies for mainstreaming less developed regions in the inclusive growth process (with special reference to Bihar)”. Around 1,000 delegates from around 24 countries, Bihari diaspora, are taking part in the event organised to send a strong message that the state is changing. Praising the state government’s efforts for better utilisation of centrally sponsored schemes, the deputy chairperson said: “Pradhan Mantri Grameen Sadak Yojana is working very well in Bihar. Money (of centrally sponsored schemes) is being used by the state very well.” Explaining how the Centre is helping the state in shaping its economy, he said: “We give money through Backward Region Grant Fund (BRGF) for districts which are laggard on growth pedestal. We give special package to Bihar. There is demand for increase in the funds allotted to Bihar through BRGF scheme. We are happy to say that we are doing so.” On the issue of increased number of centrally sponsored schemes, Ahluwalia said states had been asking for more flexibility in the utilisation of funds of central schemes and pruning the number of schemes. “I don’t believe that there is a consensus on what we should do. Even within states, officials are happy with the schemes. What they want is more flexibility.” BK Chaturvedi Committee is working on streamlining the central schemes and Ahluwalia expressed hope that there would be fewer central schemes in the Twelfth Five Year Plan. While responding to moderator Singh’s question on lowest credit deposit (CD) ratio in Bihar, Rao, the RBI governor said: “We discussed with our bank officials how to improve the CD ratio in Bihar. Bihar has a CD ratio of 34-35 per cent, half the national average. But at the same time, Bihar’s CD ratio has gone up in the past few years.” Explaining the reasons behind the prevalence of low CD ratio in the state, Rao said: “Remittances are huge from migrant people. Besides, the bank officials say there is no demand for credit in the state.” Appealing the banks to lend more for agriculture sector, Rao said the responsibility must be borne by the commercial and co-operative banks for low CD ratio. The RBI governor prescribed the state government to switch its emphasis from traditional agriculture sector to industries and services. “You (state) cannot improve your CD ratio only through agricultural development. You must go beyond agriculture to industries and services to improve the CD ratio.” Stern, who spoke for cutting carbon emission, said: “There is a dramatic improvement in investment climate of Bihar. This is the time when the central support could be crucial in the state’s development.”