The Centre today announced doubling of funds allocation under a special plan for Bihar to Rs 2,000 crore for the current fiscal, a move that should please Chief Minister Nitish Kumar who has been seeking greater central assistance.

Effectively, the increase in central allocation would mean that the NDA-ruled state can spend extra Rs 1,000 crore on power, roads and irrigation within the three months ending March 31, 2011.

The decision to enhance allocation to the special plan for Bihar was approved by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan Singh.

The annual increase in allocation for Bihar special has come about due to the enhance total outlay to Rs 8,753 crore under the 11th plan from Rs 5,568 crore earlier.

The money available to the state in the next fiscal, the last year of the 11th five year plans, will be Rs 1,468 crore.

The special plan is being funded under the Backward Regions Grant Fund (BRGF) on 100 per cent grant basis.

Nitish Kumar, who returned to power in the state with impressive margins on development plank, has been seeking special status for Bihar on the lines of hilly states where investors get tax holidays for industrial projects.

The fresh fund injection is meant for utilisation in various projects, including restoration of the Eastern Gondhak Canal, integrated watershed development programme, renovation and and modernisation of Barauni and Muzaffarpur Community Thermal Power stations.