Acknowledging that all States face similar challenges of tackling poverty and lack of infrastructure on the road to development, President Pranab Mukherjee on Sunday batted for introducing a more effective mechanism for resource transfer from the Centre to the States.
“The basic objective of development planning is to fight against these [challenges],” Mr. Mukherjee said while listing out poverty, backwardness, lack of infrastructure and diseases as the common problems faced by various States. The President was speaking in New Delhi after receiving a copy of the book The New Bihar — Rekindling Governance and Development . The book was released by Noble laureate Amartya Sen.
Additionally, Mr. Mukherjee recommended taking a fresh look at the mechanism to transfer resources to State governments beyond the statutory route.
“...Now if you want to do it and have a fresh look at it, perhaps the time has come when we should concentrate on this and all stakeholders should put their heads together and find out if there can be a more appropriate mechanism through which resources can be transferred [to the States].”
Recognising the higher resource requirements of the States relative to their resource raising powers, the Constitution mandates to transfer funds to the States through statutory transfer of tax receipts collected by the Centre through the Finance Commission award. In addition, the States access Central Plan funds through Centrally-sponsored cchemes and Central assistance to State Plans.
Speaking on the occasion, one of the editors of the book and Rajya Sabha member N.K. Singh praised the development of Bihar in the past few years while pointing out that it has reversed the “pessimistic scenario”.
Mr. Singh said the book catalogues the developmental challenges of States and also refers to a more participative model. Planning Commission Deputy Chairman Montek Singh Ahluwalia, who has contributed to the book, said while Bihar was among BIMARU States, it had registered the highest growth in the 11th Plan among all the States.
“In fact,” he said, “all BIMARU States were doing quite well.”
Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh are the BIMARU States. The acronym is formed from the first letters of the names of these States.
“The Centre must be contributing more resources to the poor States. And in the case of Bihar, we do have a special plan...When growth expanded from very negligible levels, it was not because of the resources, but because something done right in Bihar, which built on Bihar's own capabilities,” he said.
Dr. Ahluwalia asserted the need for not just convergence in growth, but also convergence in per capita incomes.
Dr. Sen, who is also among the contributors, acknowledged that Bihar has made an improvement. Calling for a more integrated approach politically and economically, he reiterated that an educated and healthy workforce is a guarantee for sustained growth.
