Kerala among the most developed states in Country
The committee, headed by the then chief economic advisor Raghuram Rajan (the present RBI governor) was set up by the government amid demand for special category status by Bihar. The report also has suggested a new methodology for devolving funds on states based on a multi dimensional index (MDI) under which the the 28 states can be split into three categories — least developed, less developed and relatively developed — depending upon their MDI. scores.
The index ranges from 0 to 1 with 1 being the most backward and 0 the least backward. Paradoxically, Gujarat, which has grabbed the media headlines for its Gujarat Model of developmental activities in the last decade is also listed among less developed states. It is ranked 12 in terms of development. 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 report also suggested that each state should get a basic fixed allocation and an additional allocation depending on its development needs and performance. According to these recommendations each state will have a basic allocation of 0.3% of overall funds.
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 to have the largest share of central assistance at 16.41% of total funds, as against 10.09% earlier.
The committee opined that the the fixed allocation of funds and the MDI classification will address the demand of funds from states.