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`Financial situation of Bihar unsustainable'

State Deputy Chief Minister Sushil Modi tables White Paper in Assembly

Patna: The Opposition staged a noisy walkout from the Bihar Assembly on Monday after Deputy Chief Minister Sushil Kumar Modi tabled the White Paper during the pre-lunch session.

The fact sheets of the White Paper shockingly revealed that the present (2004-05) financial situation is critical and unsustainable in the long run and every resident of the State was reeling under the debt of Rs. 5180. The debt on the State is as high as Rs. 42,483 crores i.e. Rs. 5180 per capita and that is also being used to meet non-developmental expenditure, said Mr. Modi, who also holds the Finance portfolio.

"The present (2004-05) financial situation of Bihar is critical and unsustainable in the long run" — this startling revelation was made in the White Paper tabled in the State Assembly by the government.

It revealed that Bihar is lagging behind major States of India. There is more poverty, more malnutrition among children, high infant and mother maternal rates, very low immunisation, low literacy and more gender discrimination.

The Opposition members said they disagree with the fact sheet moved by the government and maintained that it was totally false.

The paper stated that there was no economic growth in Bihar during 1991-92 to 1995-96 while the country grew at 5.4 per cent. During 1994-95 to 2001-02, growth in Bihar was just 3.8 per cent as compared to the national average of 6.1 per cent. No private investment was made during the period due to poor investment climate in terms of poor law and order situation, lack of infrastructure and lack of skilled manpower. The expenditure is as low as Rs. 3476 crores, which comes up to Rs. 423 per capita. The capital expenditure (asset creating) is also poor at Rs. 1205 crore. (Rs. 147 per capita).

According to the white paper, the previous government functioned through borrowed funds of Rs. 3685 crores to meet its non developmental expenditure during the period.

It further borrowed Rs. 645 crores for developmental expenditure as its own income was very low at Rs. 3765 crores.

The previous government could not concentrate on development during the period as it was unable to meet expenditures like interest payments (29.2 per cent of income), pensions (18 per cent), salaries (37 per cent), loan repayment (24 per cent including debt swap).

Non developmental expenditure of the government kept on increasing while developmental expenditure decreased. Perusal of the paper disclosed that since 1990 the state is living on borrowed funds and the debt has increased four-fold from Rs. 10501 crores to Rs. 39344 crores (four times) in 2004-05.

Expenditure on pensions increased from Rs. 196 crores (6 per cent of income) in 1990-91 to Rs. 2269 crores (21 per cent of income) in 2003-04. Interest payment has increased from Rs. 683 crores in 1990-91 to Rs. 2269 crores (21 per cent of income) in 2003-04 and salaries have also increased from Rs. 2410 crores in 1990-91 to Rs. 6164 crores in 2003-04.

Revenue deficit went up from an average annual level of Rs. 730 crores during 1990-97 to Rs. 1836 crores during 1997-98 to 2003-04. Fiscal deficit increased three times from 1990-2004 as it registered an increase from an average annual level of Rs. 1340 crores during 1990-97 to Rs. 3817 crores during 1997-98 to 2003-04. - UNI

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`Financial situation of Bihar unsustainable'

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