PM in Parliament[Back]

December 17, 2003
New Delhi

PMís statement in Lok Sabha on the need for a financial package to Bihar for developmental works

~I learnt about the concerns expressed by the Honíble Members about the development problems of Bihar and I am here to assure you that the issue of effectively addressing the problem of poverty and backwardness of some regions, including Bihar has been engaging our attention and we have initiated the Rashtriya Sam Vikas Yojana (RSVY) in the Tenth Five Year Plan which has a special economic package for Bihar. Under this plan, projects in critical sectors requiring intervention have been identified and full central assistance will be given for their implementation.

As you are aware, Central Assistance is being given to fund the State Plans as per the Gadgil-Mukherji formula under which 85% weightage is given to population and per capita income, which helps states like Bihar. Besides, Additional Central Assistance is also given for a number of identified programmes and special projects to finance the state plans. As a matter of fact, 83% of the plan outlay of Bihar of Rs.3320 crore for the current year is financed by central assistance.

Now, I would like to elaborate on the efforts being made by the Union government for development of critical sectors in Bihar to which the Honíble members have drawn the attention of the House.


Out of 3408 km of National Highways in Bihar, 723 km is included for development of 4-lanes under the National Highway development Project. It includes 206 km of NH No.2 under Golden Quadrilateral and 517 km length of East-West corridor. The balance is being developed through the State Government and other agencies. A special project to upgrade and strengthen the State Highways is being funded under the RSVY. Improvement of Major District Roads/Other District Roads will be taken up under Rural Infrastructure Development Fund (RIDF) of NABARD. Rural roads are to be upgraded using Prime Ministerís Gram Sadak Yojana (PMGSY) funds. An amount of Rs.150 crore is allocated to Bihar per annum for development of rural roads under PMGSY. Unfortunately, no funds could be released in 2002-03 due to poor pace of expenditure by the State Government.


At present, most of the requirement of power of Bihar is being met from the Central utilities. Further, the NTPC is planning to take up three mega projects in Bihar with an aggregate capacity of 4480 MW at an estimated cost of about Rs.18,700 crore during the Xth/XIth Plan periods. Besides, surplus power from the hydel projects of the North East will also be available for the region. It is not the availability of power which is problematic, but the capacity of Bihar to absorb more. Therefore, a project for strengthening the sub-transmission system in the State at a cost of Rs.365 crore is being taken up under the RSVY. Further, schemes for improvement of distribution infrastructure costing Rs.765 crore have been finalized under the Accelerated Power Development and Reforms Programme (APDRP) for completion within two years. With this investment, Bihar state would be able to utilize more power and improve its economy. Some members have mentioned about low Plant Load Factor (PLF) of state run power stations. NTPC is willing to take over Muzaffarpur power station, invest on its modernization and improve the PLF if the State Government agrees.

Irrigation and Floods

Although irrigation and flood control are state subjects, the Central Government has been alive to the problem and assisting the state through various schemes. Keeping in view the flood problems of North Bihar on account of rivers like Kamla, Bagmati and Kosi emanating from Nepal, the Government of India has already reached an agreement with Nepal for taking up investigations and project-report-preparation for construction of storages on Sapta Kosi and Sun Kosi. Discussions are going on for similar projects on the other two rivers also. The Central Government has also sanctioned four schemes in the flood-control sector for maintenance of Kosi and Gandak embankments, flood-proofing, extension of embankments into Nepal territory and anti-erosion works. It is for the State Government to take advantage of these schemes and utilise the available funds fully.

Under the Accelerated Irrigation Benefits Programme, the Central Government has already approved seven projects to create an additional irrigation potential of about three lakh hectares. The drawals by the State Government in the last two years, however, have been far short of the ceilings fixed. The State Government should utilize the allocated funds fully for completion of the on-going projects.

The Central Government has also agreed to fully fund the project for restoration of Eastern Gandak canal system at a cost of Rs.294 crore under the RSVY. This project will restore an irrigation potential of about 3.5 lakh hectares lost due to siltation and dilapidation of the canal system.

A programme for installation of a million shallow tubewells to irrigate two million hectares is being taken up under the RSVY. I am told that by the end of this year, one lakh tubewells will be installed. I am sure, this programme will benefit millions of farmers of Bihar to improve their income from agriculture. Special projects for development of Mango, Lichi, Makhana crops and Spices in four districts of Bihar to improve its horticultural economy is being taken up.


Thirteen projects for construction of new lines, ten for gauge conversion, fifteen for doubling of lines and two for electrification have been taken up in Bihar.

Rashtriya Sam Vikas Yojana (RSVY)

Under this programme, the following projects worth Rs.2531.35 crore have been identified for implementation during the 10th Plan:

Name of Projects

Crore Rupees


Million Shallow Tubewell Programme (Subsidy Component)



Strengthening of Sub-transmission system in Bihar



Development of State Highways in Bihar



Restoration of Eastern Gandak Canal



Development of Horticulture (Subsidy Component)



Integrated Forest Management



Integrated Watershed Development




Let me assure you that as committed by the Planning Commission, overriding priority will be given to the implementation of these projects which have been identified after wide-ranging consultations and there will not be any constraint of funds. Central assistance at the rate of Rs.1000 crore per year will be made available during the 10th Plan subject to actual utilisation. Central agencies will be involved in the timely implementation of projects.

Under the Backward Districts Initiative, eight districts of Bihar, affected by extremism, have been included. These districts will receive grant at the rate of Rs.15 crore each per year for three years. My attention has been drawn to the exclusion of Bihar and Orissa from the normal component of this Initiative. I would like to assure all of you that eligible districts of these two States will also be covered under the programme.

Thus, a multi-pronged effort is being made to address the development problems of Bihar. However, the Honíble Members will agree with me that successful project implementation requires conducive environment, effective administration and quick decision making from all concerned. The State Government needs to gear up its machinery for timely completion of projects so that the funds allocated to the State under various schemes are utilized and the intended benefits flow to the State and the ultimate beneficiaries. With the joint efforts of the State and the Central Government, I am hopeful that the initiative taken through the special Plan under the Rashtriya Sam Vikas Yojana will help trigger the development process in the State.