Human indicators put state that brags about growth behind Tripura and Sikkim
NEW DELHI (TIP): A new development index has identified Gujarat as a less developed state, while ranking Odisha and Bihar along with eight others as “least developed” and Goa and Kerala among the seven “relatively developed” states. A panel headed by Raghuram Rajan, now the RBI governor, which submitted its report to finance minister P Chidambaram, also recommended a fresh approach to devolution of funds to states and moved away from the special category classification to devise three categories – least developed, less developed and relatively developed. According to the index, there are 10 least developed states, 11 less developed and seven relatively developed states in the country. The slotting of Gujarat, which has attracted attention due to its development model, in the “less developed” category is likely to escalate the already bitter political debate on the ‘Gujarat model of development’.
The other states in this category are Manipur, West Bengal, Nagaland, Andhra Pradesh, Jammu and Kashmir, Mizoram, Tripura, Karnataka, Sikkim and Himachal Pradesh. The least developed states include, apart from Odisha and Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Arunachal Pradesh, Assam, Meghalaya, Uttar Pradesh and Rajasthan. The relatively developed states according to the index are Haryana, Uttarakhand, Maharashtra, Punjab, Tamil Nadu, Kerala and Goa. The panel has developed a multidimensional index of backwardness based on monthly per capita consumption expenditure, education, health, household amenities, poverty rate, female literacy, percent of SC-ST population, urbanisation rate, financial inclusion and connectivity.
The panel said less developed states rank higher on the index and would get larger allocations based on the need criteria. “The committee has proposed a general method for allocating funds from the Centre to the states based on both a state’s development needs as well as its development performance,” Chidambaram told reporters. “The committee has recommended that each state may get a fixed basic allocation of 0.3% of overall funds, to which will be added its share stemming from need and performance to get its overall share,” Chidambaram said. The panel was set up after persistent demand from Bihar CM Nitish Kumar who insisted a the special category status to help access more funds for its development. This sparked off a demand from several other states such Odisha for the special category state status. While the new index will ensure more funds for Bihar from the central kitty, it has stopped short of conferring the “special category” tag on the state, Shaibal Gupta, seen as Nitish’s nominee on the panel to submit a 10-page dissent note.
However on Thursday, Nitish concealed his disappointment, if any, to celebrate the recommendation as a triumph even as BJP taunted him for failing to have his way despite cozying up to Congress. “It is a very decent report. For example under this index Odisha is at the bottom of the list and then Bihar. Therefore it recognizes that Odisha, Bihar, Madhya Pradesh are among the most backward states of India. That is I think the demand,” Chidambaram said. “The demand of these states is please recognize the fact that for a variety of reasons we are the most backward states. I think this index captures the degree of backwardness and acknowledges that Bihar is among the most backward states of India. Special category is the present categorisation. Now they are moving away from that,” finance minister said while detailing the recommendations of the panel.
“This is not an answer to all the demands of the states. This is meant only to be a way forward on how to devolve funds to the more backwards states and areas of India. He said the index better captures the stage of development in a state, how backward it is or how relatively less backward it is and is a good measure for planning and devolution of funds. “Because some states are small very limited resources it is necessary to have a threshold below which the devolution of funds does not fall. So the committee has recommended that each one of the states will get a basic allocation of 0.3%,” Chidambaram said. The finance minister said that the report will be examined by various stakeholders before being implemented. “It will not be in the current year. It has to go through the examination process and will be implemented in an appropriate time in the next financial year.
To which funds this should be applied a decision will be taken,” Chidambaram said. The report said that the National Development Council had accorded the status of special category state to eleven out of 28 states. They were based on a number of characteristics such as hilly and difficult terrain, low population density and or sizeable share of tribal population, strategic location along the borders with neighbouring countries, economic and infrastructural backwardness and non-viable nature of state finances. State under this category have a low resource base and are not in a position to mobilise resources for their developmental needs even though the per capita income of some of these states is relatively high, the report said.