Bihar’s GDP growth is totally dependent on Central transfers

Bihar chief minister Nitish Kumar’s insistence on linking his post-election support to a party that promises Bihar ‘special category’ status is not without reason, the state’s increase in annual GDP is almost entirely driven by what happens to central transfers in the year. In FY13, central transfers — both tax transfers as well as plan funding — were R50,750 crore and the state’s GDP rose R61,645 crore; in FY12, R44,870 crore was transferred while the GDP rose R42,532 crore (see graphic).

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