Goa, Kerala top chart based on MDI methodology
TEAM HERALD
PANJIM: Though Goa was not looking for financial benefits under Special Category Status, this has been ruled out for all States with the Raghuram Rajan panel report recommending ‘Multi Dimensional Index’, under which Goa and Kerala have been rated as the most advanced under its relatively developed status category.
The Raghuram Rajan panel report has made a case for ending the ‘special category’ criteria for providing additional assistance to poorer States. Under the new criteria each State will get a fixed basic allocation of 0.3 percent of overall funds, to which will be added its share stemming from both State’s development needs as well as its development performance.
This in no way thwarts Goa’s quest for Special Status since Goa does not seek additional financial grants from the Centre, instead Goa’s demand is for amendment to Art 371 to include Goa’s name, under the Article, to give the Goa Government powers to enact law to protect the land, language, culture and identity of the people due to the continual influx of large numbers of people from other States, given the small size of the State and the massive use of money power, which have the power to overwhelm the identity of Goa, which as assured protection by the first Prime Minister of India Jawaharlal Nehru at the time of its integration into India.
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The committee, headed by the then Chief Economic Advisor Raghuram Rajan (now RBI governor) which was set up by the government amid demand for “special category” status by Bihar, suggested a new methodology for devolving funds on states based on a ‘Multi Dimensional Index’ (MDI).
Giving details of the report Finance Minister P Chidambaram Thursday said the committee has suggested that the 28 States be split into three categories ~ least developed; less developed and relatively developed ~ depending upon their MDI scores.
As regards the allocation of funds, the report suggested that each State should get a basic fixed allocation and an additional allocation depending on its development needs and development performance.
The demand for funds and special attention of different States, Chidambaram said, “would be more than adequately met by the twin recommendations of the basic allocation of 0.3 per cent of overall funds to each State and the categorization of States that scores 0.6 and above as least developed States.”
According to the Committee, these two recommendations, along with the allocation methodology, will effectively subsume what is now “Special Category” status.
Bihar along with some other States have been demanding “special category” status to get more funds from the Centre.
Based on the MDI scores, the 10 least developed States are Odisha, Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Arunachal Pradesh, Assam, Meghalaya, Uttar Pradesh and Rajasthan.
The seven most developed States are Goa, Kerala, Tamil Nadu, Punjab, Maharashtra, Uttrakhand and Haryana.
According to the report, the eleven less developed States are Manipur, West Bengal, Nagaland, Andhra Pradesh, Jammu and Kashmir, Mizoram, Gujarat, Tripura, Karnataka, Sikkim and Himachal Pradesh.
The report was likely to be implemented from the next financial year, Chidambaram said, adding “Prime Minister Manmohan Singh has directed that the recommendations of the committee may be examined and necessary action in this behalf may be taken”.
The Department of Economic Affairs, he added, will soon examine the report and take necessary action.
The Rajan Committee was asked to suggest methods for identifying backwardness of States using a variety of criteria and also to recommend how the criteria may be reflected in future planning and devolution of funds from the central government to the States.
The Committee has proposed a general method for allocating funds from the Centre to the States based on both State’s development needs as well as its development performance.
Multi Dimensional Index of backwardness, it said, is based on per capita consumption as measured by the NSSO, the poverty ratio, and a number of other measures which correspond to the multi dimensional approach to defining poverty outlined in the Twelfth Plan.
As per the report, the States with score of 0.6 and above on the Index have been classified as ‘Least Developed’; States with score below 0.6 and above 0.4 ‘Less Developed’; and States with score of below 0.4 ‘relatively developed’.
