Despite equity oriented transfers from the central government, there is a widening inter-state inequalities. Explain (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· State governments are largely responsible for the development of backward areas.
· It has one of the lowest CAGR of 9.9 per cent during the 30-year period. Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Rajasthan continue to be at the bottom, indicating that the tag ‘BIMARU’ is yet to be shaken off by them.
· Institutional transfers by way of Finance Commission and by the erstwhile Planning Commission have been based on both equity and efficiency.
· The transfers from erstwhile Planning Commission based on the Gadgil-Mukherjee formulae had also allocated higher weightage to backwardness.
· Contrary to per capita GSDP, the skewness has shown a moderating trend as the coefficient of variation of transfers of resources from the Centre has declined from 418 per cent in 1991-92 to 230 per cent in 2021-22.
· The introduction of area as a distinct factor in inter-se allocation with a minimum weight of 2 per cent to each State benefiting smaller States with a smaller geographic area at the cost of bigger States.
· Moreover, horizontal distribution making these transfers equalising may also not be fair to the middle and high income States as they contribute far more to the Central taxes.
Sathishkumar 3 years
give elaborate review
IAS Parliament 3 years
Good attempt. Keep Writing.
