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LATEST NEWS UPDATES | Bihar spends most on pension among all states

Bihar spends most on pension among all states

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published Published on May 2, 2012   modified Modified on May 2, 2012
-The Times of India
 
Bihar seems to be becoming a pensioners' paradise with the state spending the highest amount on account of pension among all states, 48% of its revenue earnings. Along with some north-eastern states, Bihar's expenditure on pension, administrative services (salaries etc) and interest payments adds up to more than its total revenue generation. 

According to budget documents of state governments, Bihar is the only one among non-special category states that has committed expenditure of more than 100% of its own revenue. West Bengal, which two years ago had 125% committed expenditure, brought it down to 87% in 2011-12 though its interest outgo remained one of the highest (at 49%) among all states. 

Committed expenditure is a major component of non-development revenue expenditure, comprising expenditure on interest payment, administrative services and pension. 

The Bihar government has failed to curb administrative and other committed expenditure over the years. Bihar's total committed expenditure on interest payment, administrative expenses and pension together was 113% in 2009-10 which went up to 118% in 2010-11 and slightly moderated the next year but still remained much above its own revenue generation. 

Bihar can learn from states like Chhattisgarh, Goa, Tamil Nadu, Gujarat, Andhra Pradesh and Maharashtra which have all brought down their committed expenditure below 40% of their revenue generation. 

The worst, however, is the performance of north-eastern states. Arunachal Pradesh, Manipur, Mizoram and Nagaland, along with J&K, have committed expenditure between 185% and 450% of their revenue earnings. 

An analysis by the Reserve Bank of India on state finances said pension payments as a proportion of state's GDP increased in 15 non-special category (NSC) states during 2010-11 over the previous year. It is budgeted to increase in nine states in 2011-12, with Bihar registering the maximum increase. Bihar's total pension outgo is 3% of its GSDP. 

Contrary to the position of NSC states, the committed expenditure-GSDP ratio of consolidated special category states maintained an uptrend and reached as high as 9.8% in 2011-12.

The Times of India, 2 May, 2012, http://timesofindia.indiatimes.com/india/Bihar-spends-most-on-pension-among-all-states/articleshow/12957582.cms


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