Saturday 22 September 2018

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Economy | Finance

Dandvate agrees to modify formula for central aid

 

The planning commission is likely to adopt a new formula for central assistance to the states, as smaller states like Goa are being affected severely due to the existing Gadgil-Mukherjee formula.

Prof. Madhu Dandvate, vice chairman of the Planning Commission, in response to the plea made by Goa chief minister Pratapsing Rane in this regard, said the PC is thinking to review the existing formula.

"The existing parameters benefit few states while hamper the others. A new formula needs to be evolved which would hamper all the states the least", said Dandvate while delivering a talk organised by the Goa International Centre here.

Rane brought to Dandvate's notice at the meeting that the existing Gadgil-Mukherjee formula is outdated as its parameters like less assistance for states having higher per capita income and less number of population hampers Goa's socio-economic development.

Perhaps Goa is the only smaller state among nine ones in the country, which gets hardly 28 per cent of central assistance, compared to the percentage ranging from 62 per cent to 103 per cent allocated to the remaining eight states - all coming under special status.

Development of the state is severely affected in a decade, states Rane, with its 145.9 per cent of central allocation in 1987-88 coming down to 27.9 per cent in 1997-98, after Goa was granted statehood.

But being a small state with 3702 sq kms of area, the scope for resource mobilisation is minimum though the infrastructure costs the same like other states. Goa cannot sustain the pace of progress in such a situation with the existing formula, claims K R Chalam, director of planning.

In response to the suggestions invited by the PC from all the states, Goa government has now requested the PC to change the criteria in terms to weightage given to the population and per capita income, which is 60 per cent and 25 per cent respectively.

While Goa gets hardly 0.15 per cent of central assistance as a reward for its successful population control drive, it is excluded from the 20 per cent assistance fixed under deviation criterion, simply because Goa's per capita income is above the national average.

The state is demanding that distance method allocation be fixed at 20 per cent assistance instead of the existing five per cent, under which Goa got hardly Rs 39 lakh last year. The population criterion may also be given 10 per cent less weightage, states Chalam.

Though Goa gets maximum amount of assistance under performance criteria, it is hardly 7.5 per cent while its gets only one per cent of assistance each for population control, second highest literacy rate and land reforms etc.

Despite Goa contributing over Rs 1000 crore in terms of foreign exchange from mining and tourism industry, no central assistance is given to build necessary infrastructure for these key sectors. The state expects Dandvate to give around 10 per cent assistance to tackle this crucial area.






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