For Bihar, for India
in perpetuity, thereby institutionalising a terribly impoverished peasantry. Secondly, after Independence, the Centre imposed the Freight Neutralisation Policy, which allowed the developed states to get minerals and raw materials from Bihar at cheaper rates than they were available in Bihar! This terribly inequitable and arbitrary system continued for three long decades, from 1952 to 1993. In 2000, Bihar was bifurcated to create Jharkhand. All the minerals and raw material wealth, along with a huge chunk of the industrial belt, went to Jharkhand. Finally, there were long years of misgovernance, but that has been rectified dramatically in the last seven years.
The Centre has a policy to assist backward states by according them special category status. The Centre’s criteria to accord this is that the states must be in a hilly and difficult terrain with low population density, have a strategic location along the border, and suffer from infrastructural weakness and nonviable nature of financial resources. Except for not being sparsely populated, which in India should be an asset not a liability, Bihar qualifies for all these criteria.
It has a 729 km border with Nepal; its northern terrain is endemically flood prone due to the rivers coming from Nepal; on the infrastructure side, its roads, power and tele-density is one of the lowest in the country; and, in the absence of investments and industrialisation, its financial situation, although greatly improved in recent years, is still precarious.
States which have been accorded special category status have greatly benefitted by receiving loan at concessional rates from the Centre, and through tax concessions which have helped to catalyse pri- vate investment flows. Of the special category states, HP and Uttarakhand have a per capita income which is three and a half times that of Bihar, and even that of Assam is double that of Bihar. The irony is that developed states like Punjab, Haryana and Tamil Nadu receive per capita Central funds which are four times higher than Bihar. With over 50 per cent of its population below the poverty line, Bihar receives only 2.67 per cent of Central subsidies, and 1.9 per cent of Central investment.
Mr Kumar has argued at every level — the Prime Minister, the Planning Commission and the finance minister — that Bihar needs the help of the special category regimen to fast track its development. In its absence, in spite of the remarkable track of good governance seen by the state in recent years, the 110 million people of Bihar will remain locked in poverty. With nine per cent of the country’s population, Bihar today contributes only 2.9 per cent to the national GDP. Imagine what would happen to India if Bihar is enabled to contribute as much as 10 per cent, which is feasible. Bihar wishes to contribute to the growth story of India.
Chanakya believed that the Centre is only as strong as all the parts that constitute it. To ensure this principle is not a favour accorded by the Centre but a right of all those who are a part of the Union. Finance minister P. Chidambaram, in his Budget speech has indicated that the Centre will reconsider Bihar’s request. Mr Kumar has welcomed the gesture. He is coming to New Delhi today to address a mass rally in order to strengthen that resolve. Author-diplomat Pavan K. Varma’s latest book is
Chanakya’s New Manifesto: To Resolve the Crisis Within India