An expert committee under chief economic advisor Raghuram Rajan has identified 10 parameters for a new Composite Development Index, whose adoption by the Centre will change the way thousands of crores are transferred annually as central assistance to states and can potentially set the stage for realignment of political forces in Bihar before the 2014 general elections.
The new index seeks to rate the states on the basis of their distance from the national average on parameters including poverty rate, consumption, education, health, female literacy, urbanization, household amenities, connectivity, financial inclusion and the share of SCs/STs in the total population.
In current classification, Bihar and many other Bimaru states don’t qualify to be treated as backward and hence not entitled to spl assistance
Chidambaram has said existing formula is outdated. Composite index may signal a new understanding between Nitish Kumar and the Centre
Nitish has said he will support any party that helps Bihar’s case for more aid.
In the current scheme of things, Bihar and many other Bimaru states (a club of underdeveloped north Indian states) don’t qualify to be treated as backward and, hence, deserving of special assistance that accrues to the seven north-eastern states, Sikkim, J&K, Himachal and Uttarakhand.
Politics apart, the proposed index will be the basis for the new system of special assistance running into thousands of crores to certain states and will replace the existing method based on geographical factors and terrain. Sources familiar with the discussions said that once the report is ready, the Centre may opt for the new index but could insist on performance linked assistance to ensure that there is an incentive for the states to improve their rankings. In 1969, the Centre, based on the Gadgil formula, had initially designated Assam, Jammu & Kashmir and Nagaland as special category states to provide preference for central assistance. Now there are 11 such states.
Over the past few years, several of the Bimaru states including Bihar, Uttar Pradesh, West Bengal and Odisha have demanded special assistance from the Centre to improve the quality of living and also deal with high debt. The new index will come handy for the Congress ahead of the general elections next summer when it will have to hunt for allies.
The new index seeks to rate the states on the basis of their distance from the national average on parameters including poverty rate, consumption, education, health, female literacy, urbanization, household amenities, connectivity, financial inclusion and the share of SCs/STs in the total population.
In current classification, Bihar and many other Bimaru states don’t qualify to be treated as backward and hence not entitled to spl assistance
Chidambaram has said existing formula is outdated. Composite index may signal a new understanding between Nitish Kumar and the Centre
Nitish has said he will support any party that helps Bihar’s case for more aid.
In the current scheme of things, Bihar and many other Bimaru states (a club of underdeveloped north Indian states) don’t qualify to be treated as backward and, hence, deserving of special assistance that accrues to the seven north-eastern states, Sikkim, J&K, Himachal and Uttarakhand.
Politics apart, the proposed index will be the basis for the new system of special assistance running into thousands of crores to certain states and will replace the existing method based on geographical factors and terrain. Sources familiar with the discussions said that once the report is ready, the Centre may opt for the new index but could insist on performance linked assistance to ensure that there is an incentive for the states to improve their rankings. In 1969, the Centre, based on the Gadgil formula, had initially designated Assam, Jammu & Kashmir and Nagaland as special category states to provide preference for central assistance. Now there are 11 such states.
Over the past few years, several of the Bimaru states including Bihar, Uttar Pradesh, West Bengal and Odisha have demanded special assistance from the Centre to improve the quality of living and also deal with high debt. The new index will come handy for the Congress ahead of the general elections next summer when it will have to hunt for allies.
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