Economic Reforms in Bihar

Bihar government’s initiative toward economic reforms seems to have borne fruits, with the state achieving a turnaround in its fiscal position in 2006-07, the Comptroller and Auditor General has said.

In its report for the year ended March 31 last year, tabled by deputy chief minister-cum-finance minister Sushil Kumar Modi in the state assembly today, CAG said there was improvement in the fiscal position in terms of key parameters of revenue, fiscal and primary deficits relative to their values in 2005-06.

The turnaround was primarily due to steep increase in central tax transfers (27.6 per cent) and grants-in-aid (57.4 per cent) from the Centre over the previous year, it stated.

The revenue expenditure, however, hovered around 80 per cent during 2002-07, leaving inadequate resources for expansion of services and creation of assets.

In the revenue expenditure category, non-plan revenue expenditure in 2006-07 was significantly higher than the normative assessment for the state for the year and the salary expenditure, pension liabilities, interest payments and subsidies constituted about 69 per cent of the non-plan revenue expenditure, the CAG pointed out.

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