Population density be made criteria for devolution of funds:

Bihar Deputy Chief Minister Sushil Kumar Modi Thursday said they have made a strong case before the 15th Finance Commission to make population density the criteria for devolution of funds in place of area to help backward states like Bihar get additional money.

Modi along with Chief Minister Nitish Kumar had on Wednesday interacted with the 15th Finance Commission team headed by its Chairman N K Singh.

"We (Bihar) have suggested the 15th Finance Commission to change the existing formula for division of central tax proceeds between Centre and states...Heavily populated states like Bihar would be benefited most with the Centre asking the Commission to submit its recommendations on the basis of 2011 census. It would benefit Bihar as the allocation of funds was hitherto done on the basis of 1971 census," he told reporters.

"Bihar would be benefited the most if the Commission accepts our suggestions like making population density in place of 'area' as one of the criteria as Bihar has highest population density at 1106 per sq mtr. We also asked Commission to make 'incremental forest cover' instead of making 'forest cover' alone the basis," he said.

The Commission is a statutory body constituted every five years to devise a formula for allocation of net central tax proceeds between the Centre and states.

Besides, the government also sought Rs 1 lakh crore as state specific grant for schemes under 'Saat Nischay' (seven resolves of governance) such as piped drinking water, pucca drainage and roads, Lohia Swachhta Yojana and setting up a middle school in every panchayat, agriculture roadmap and shelter homes etc., Modi, who also holds finance portfolio, said.

Modi also demanded greater central assistance to the state for disaster management as Bihar got the allocation of merely Rs 2591 crore from 14th Finance Commission whereas Maharashtra got Rs 8195 crore, Rajasthan Rs 6094 crore, Odisha Rs 4130 crore and Madhya Pradesh Rs 4848 crore.

Stating that the state government pitched for more funds as its share in central taxes, the finance minister said that the 14th Finance Commission has increased the overall shares of states from 32 to 42 per cent in central tax proceeds but Bihar's share witnessed a southward trend since the time of 11th Finance Commission.

Bihar's share was 11.589 per cent in 11th Finance Commission which declined to 11.028 per cent in 12th, 10.917 per cent in 13th and it finally dipped to 9.665 per cent in 14th Finance Commission, Modi said adding that "the state wants that its share must be above 11.589 per cent of 11th Finance Commission."
Bihar also suggested that cess and surcharge be included in the "divisible pool of central taxes" that included Income Tax, Custom, Corporate Tax, Excise Duty etc., the Dy CM said adding that "the overall states' share in central taxes be increased to 50 per cent from current 42 per cent besides including cess and surcharge within divisive pool of taxes which accounted for Rs 3.76 lakh crore."