RJD leader Laloo Prasad Yadav today warned that ever-growing economic disparities between urban and rural populations, and between regions could break India. Speaking in the Rajya Sabha on the health of states’ finances, the former Bihar CM said the finances of Bihar, Orissa and states of the North-East were on the brink of collapse. Unless the Centre waives off their interest repayments, like it did for Punjab, anarchy would prevail. ‘‘Extremism, poverty, hunger and abductions would increase,’’ he warned.Calling the Centre a ‘‘moneylender’’, Laloo asked why states should be forced to accept Central loans at exorbitant interest, which are higher than market rates. Day’s pick: A new formula Here’s Laloo’s formula for simultaneous polls to Lok Sabha and state Assemblies. He said the proposal is worth considering as it would save money, paper and a lot of administrative work. Everyone looked impressed when suddenly he changed his tone. ‘‘But the results of the Assembly polls should not be translated into action till the incumbent governments in the states complete their full term,’’ he suggested amid peals of laughter. Laloo said the implementation of the Fifth Pay Commission had crippled the economy of most states and the Centre has had to bail them out.Taking exception to economists and planners painting Bihar in a bad light, Laloo blamed the ‘‘11 Bihari Ministers in the Union Cabinet for spoiling the image of Bihar’’. He reminded members that development of various states was linked to historical process and it could not be bypassed. ‘‘Littoral states like Goa, Chennai, Kolkata had an advantage as they had ports.’’ He rued that Bihar’s infrastructure were washed away by perennial floods.The RJD chief demanded the states be given a bigger slice of Central taxes, while the Centre could work harder to mop up Income Tax. ‘‘You look around a lot of money is hidden as unpaid Income Tax,’’ he told Finance Minister Jaswant Singh.Initiating the debate, Manmohan Singh of the Congress said the Centre needs to review its fiscal management due to precarious conditions of the finances of most states. The RJD chief said the growing borrowings by states was worrisome and wondered whether in the existing situation, the country could achieve the eight per cent growth target.He blamed the Centre for thrusting Fifth Pay Commission recommendations on states, Singh said, which had put a heavy burden on their finances. BJP’s Lalitbhai Mehta suggested states with better fiscal management should be rewarded.Voicing concern over the trend of borrowing to meet revenue deficit, C. Ramachandraiah of the TDP said imprudent moves and populist policies were playing havoc. CPI-M’s Nilotpal Basu asked for a fresh look at allocation of Central resources and called for greater decentralisation of resource mobilisation.
