States of India - almost and least Developed

[nirranj]

Rajan report: Odisha, Bihar least developed; Goa, Kerala on top

The Raghuram Rajan panel report has made a case for ending the 'special category' criteria for providing additional assistance to poorer states, as it ranked Goa and Kerala as the most advanced state and Odisha and Bihar the least.

The committee, headed by the then Chief Economic Advisor Raghuram Rajan who's now the Reserve Bank of India Governor 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 today 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.

On 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 to different states, Mr 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 categorisation 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, has 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 is likely to be implemented from the next financial year, Mr 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 the state's development needs as well as its development performance.

Each state, as per the new criteria, will get a fixed basic allocation of 0.3 per cent of overall funds, to which will be added its share stemming from need and performance to get its overall share.

Multi Dimensional Index of backwardness, it said, is based on per capita consumption as measured by the NSSO or National Sample Survey Organisation, 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 scores of 0.6 and above on the index have been classified as 'Least Developed'; states with scores below 0.6 and above 0.4 as 'Less Developed'; and states with scores below 0.4 as 'relatively developed'.

Rajan report: Odisha, Bihar least developed; Goa, Kerala on top - NDTVProfit.com

 

[nirranj]

Odisha and Bihar, along with poll-bound Madhya Pradesh, Chhattisgarh and Rajasthan, are among India's 10 'Least Developed' States.

Goa and Kerala, along with five other States in the 'Relatively Developed' category, are the most advanced. Gujarat, headed by BJP Prime Ministerial candidate Narendra Modi, figures in the 'Less Developed' category and is twelfth overall.

These are the findings of a panel headed by former Chief Economic Advisor Raghuram Rajan, now the RBI Governor. The panel was tasked with evolving a composite development index amidst demands for 'Special Category' status by Bihar and other poor States seeking more central assistance.

The Rajan panel has recommended doing away with the 'Special Category' criterion. Instead, it wants allocations to States be based on a multidimensional index, which was the basis for the above rankings. If the recommendations are accepted, the 'Least Developed' States may get additional funds, from the next financial year.

The index categorised the 28 States into three categories. States that scored 0.6 and above have been classified as 'Least Developed'. Those that scored below 0.6 and above 0.4 are 'Less Developed' and those with scores below 0.4 are 'Relatively Developed'.

THE CRITERIA

Backwardness has been measured on the basis of monthly per capita consumption, the poverty ratio, education, health, household amenities, female literacy, percentage of Scheduled Caste/Tribe population, urbanisation rate, financial inclusion, and connectivity. The panel has proposed a general method for allocation of central funds, based on each State's development needs as well as its development performance. It wants each State to get a fixed allocation of 0.3 per cent of overall funds. The amount derived from the State's need and performance will be added to this.

ADEQUATE COMPENSATION

The Committee has observed that the demand for funds by different States will be more than adequately met by the basic allocation of 0.3 per cent of overall funds and the categorisation of States that score 0.6 and above as 'Least Developed'. The report, which was made public on Thursday, has been submitted to Finance Minister P. Chidambaram. "This (multidimensional index) captures stages of development in a better manner and shows a way forward," Chidambaram said at a press conference. He added that the Economic Affairs Department will examine the report and take the necessary action.

Currently, whether a State qualifies for the 'Special Category' or not is determined on the basis of terrain, population density, location, and infrastructure, among other criteria.

Rajan panel's new pecking order for States has some surprises | Business Line

 

[nirranj]

Rajan report: Some States will be happy, others will frown

Not all States will be thrilled with RBI Governor Raghuram Rajan's Underdevelopment Index. The index will result in gains for some States, but losses for others in terms of their existing allocations of development funds.

For example, Odisha will see its share of total Central assistance provided to State Plans and Centrally sponsored schemes rise, as well as an increase in Normal Central Assistance and Finance Commission grants.

On the other hand, Tamil Nadu is likely to be unhappy with its share from these development funds being revised downward due to a better index score.

Andhra Pradesh will also get a smaller chunk for the total Central assistance given to State Plans, as well as Centrally sponsored schemes. But it will garner a greater share of Normal Central Assistance (NCA), as determined by the Gadgil-Mukherjee formula, as well as Finance Commission grants and central taxes deployed.

The Rajan-led committee that put together the index took into account 10 socio-economic parameters in 28 Indian States to determine how best to distribute development funds from the Centre. These include monthly per capita consumption, education, health, household amenities, the poverty rate and female literacy.

In addition, the proportion of SC-ST residents to the State's total population, the urbanisation rate, financial inclusion and connectivity were used to put together the barometer of backwardness in Indian States.

The development funds are not cornered solely on the basis of index ranking, however. Rather, the committee has asserted that the truly needy States should be given disproportionately more; while more developed States should accrue a smaller chunk of the funds.

What is more, the committee has indicated that over time, funds allocated between States can be increased or decreased to ensure development takes place across the country.

This is achieved through a formula wherein each State is allocated 0.3 per cent of the total development funds, while the remainder will be distributed on the basis of "need" and "performance" parameters.

States' changing need for development funds will be evaluated through a formula that takes stock of their share of the country's total population, their share of the total area in the country and their underdevelopment index score.

Excluding each States' fixed share of development funds (adding up to 8.4 per cent), need will account for 69 per cent of variable development funds.

Performance in achieving development goals will account for the remaining funds.

The Rajan committee says this performance-based component is necessary since granting substantially more funds to under-developed States will create a mild disincentive to develop.

As such, the performance-based component can be thought of as a bonus that removes the disincentive for a State to improve its development index, which would result in a reduced share in allocations over time.

http://www.thehindubusinessline.com...be-happy-others-will-frown/article5171901.ece

 

[nirranj]

Kerala and Goa are faring much better than the next five compared. But better performing states too need fumds to take up projects like Metro train, urban renovation, food security, modernising the police forces, E governance, new infra projects, power projects etc. I am not sure on how this is going to help the states that are categorised as developed???

 

[nirranj]

Goa, Kerala 'relatively developed', Gujarat 'less developed': Rajan panel

Odisha, Bihar, Madhya Pradesh and Chhattisgarh are the least developed (or the most backward) in that order, according to a government committee whose recommendations, if accepted, will mean a larger share of central funds for these states.

Goa, Kerala and Tamil Nadu are India's most developed states, according to the report of the Raghuram Rajancommittee that looked into the backwardness of states.

The committee arrived at this conclusion by creating an index that used measures such as per capita consumption and poverty ratio.
The index ranges from 0 to 1 with 1 being the most backward and 0 the least backwardm or the "relatively developed", according to the committee.
The other states in the "relatively developed" list include Punjab, Maharashtra, Uttarakhand and Haryana.

Interestingly, Gujarat, whose chief minister Narendra Modihas made the "Gujarat model" one of the talking points of his run to be India's next Prime Minister, figures in the list of less developed states. Indeed, it is ranked 12 in terms of development.

Finance minister P. Chidambaram had set up a committee under Rajan, then chief economic adviser in the finance ministry and presently Reserve Bank of India (RBI) governor, to examine the backwardness criterion, in a move that was attributed to the Congress party-led government's attempt to woo Bihar chief minister Nitish Kumar.

The Bihar government has been asking that it be classified as a backward state so that it could get access to more central funds.
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 said in a statement.

As per the committee's calculations, Bihar should get 12.04% of the total funds allocated for states by the centre, as against its current share of 7.42% under the total central assistance to state plans and centrally sponsored schemes. Rajasthan should get 8.42% as against 4.79% at present, Odisha 6.53% as against 4.62% amd Madhya Pradesh 9.56% as against 6.91%.
Uttar Pradesh will continue corner the largest share of central assistance at 16.41% of total funds, as against 10.09% earlier.

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 said in a statement.

States that score 0.6 and above on the Index may be classified as least developed, states that score between 0.4 and 0.6 may be classified as less developed, and states that score below 0.4 may be classified as relatively developed, according to the recommendations of the committee.

The committee has asked that each state be allocated 0.3% of the overall funds. An amount will be added to this share depending on the need and performance of each state to arrive at the state's overall share.

According to the committee, the fixed allocation and classification based on the index will adequately address the demand of funds from states.

Goa, Kerala 'relatively developed', Gujarat 'less developed': Rajan panel - Livemint

 

[parijataka]

Odisha and Bihar are two states being wooed by Congress apparently as potential allies - so Odisha with per capita income double of Bihar is at least developed and Bihar a close second.

Raghuram Rajan panel report 'thinly disguised attempt' to help potential ally, Jayalalithaa tells PM

CHENNAI: Rejecting the Raghuram Rajan Committee report for "skewed" allocation formula, Tamil Nadu chief minister J Jayalalithaa has said it was a "thinly disguised attempt to provide an intellectual justification to deliver resources to a potential political ally."

"The background to the constitution of the committee was the repeated demand of the government of Bihar to confer 'special category status' on it to enable greater fund flow to the state to address its developmental deficit," she said in a letter to Prime Minister Manmohan Singh dated October 1, 2013.

The letter was released by the state government on Wednesday. She rued that the Report of the Committee for Evolving a Composite Development Index of States, also known as Raghuram Rajan Committee, had excluded important dimensions of development, including per capita availability of water and performance indicator of states.

The report was submitted to finance minister P Chidambaram recently.

"The completely skewed allocation formula which the committee has recommended severely penalizes states which have consistently worked towards national goals of development and welfare. It pushes resource allocation to populous states which have historically underperformed," she said.

 

[Tshering22]

Since when the heck did Uttarakhand and Punjab end up in 'developed' category compared to Gujarat?

Punjabis are rich through business, but what is the development in the state?

It is still a majorly agricultural state and infrastructure there is pretty average. My wife is from Punjab and I have been there many times. Chandigarh is developed agreed but it is a Union Territory.

Compared to that, rest of the state is pretty average like MP or Himachal or any other.

And how the phuk can my state fall in the same category as Gujarat?

We have hardly any industry and SMEs and private businesses dominate apart from a growing and well managed tourism market. Education is also emerging as an attractive industry, but we are by and large still a small, peaceful, non-industrial state. In fact, half the time we come into news either in Discovery Channel for Kanchendzongkha, or for tourism and trekking or if Chinese claim us or if there is a natural calamity.

Gujarat on the other hand is an industrial powerhouse, generating almost 17% of India's GDP. It has uninterrupted supply of power and water in every nook and cranny and has been the recipient of multiple UN awards on infrastructure and even being the second most well-managed province around the world.


I just don't understand.

 

[Tshering22]

Goa, Kerala 'relatively developed', Gujarat 'less developed': Rajan panel

Yeah right.

Typical nonsense.

This panel has actually put Uttarakhand and Punjab as 'developed' states.

My wife was laughing at it when she saw Punjab as developed (she's Punjabi).

Uttarakhand as developed has got to be a joke.

Even worse, Haryana as 'developed'. Other than the glassy buildings of private companies in Gurgaon, there's nothing there.

Goa is well developed though. Kerala has an excellent HDI that's all. Development-wise it is nowhere.

And calling Gujarat as less-developed is downright bias.

 

[nirranj]

Yeah right.

Typical nonsense.

This panel has actually put Uttarakhand and Punjab as 'developed' states.

My wife was laughing at it when she saw Punjab as developed (she's Punjabi).

Uttarakhand as developed has got to be a joke.

Even worse, Haryana as 'developed'. Other than the glassy buildings of private companies in Gurgaon, there's nothing there.

Goa is well developed though. Kerala has an excellent HDI that's all. Development-wise it is nowhere.

And calling Gujarat as less-developed is downright bias.

No, You are mis interpreting this report. This is to make informed decision on which state gets what percentage of central assistance. And much of the central assistance goes for social welfare measures, this report points which states are doing good in social parameters and which states are lagging in the social parameters.

In that way, Gujarat is ranked low.

If you go through the points scored by the states, except Goa and Kerala the next relatively developed states all are almost near to each other. (TN in third place has a score of 0.341 and Haryana in Seventh position has a score of 0.395)

As far as Gujarat is concerned, that state lags much in social development when compared to TN or Punjab.

For example, in terms of Infant mortality, A comparision between TN and Gujarat is as follows.

The infant mortality rate in Tamil Nadu is currently estimated at 30 deaths before the age of one year per 1,000 live births,
The under-five mortality rate is 36 deaths per 1,000 live births.

Infant mortality in Gujarat is estimated at 50 deaths before the age of one year per 1,000 live births,
The under-five mortality rate for Gujarat is 61 deaths per 1,000 live births.

That of Kerala is 12 per 1000.

Whereas that of India is 52

But when You compare Kerala with Singapore (1.92) or Cuba (5.13) you will find Kerala still has a long way to be called a developed state.

This is why They have used the term Relatively Developed.

This can be a political report as the intention is to provide more assistance to Bihar without giving it a special status.