Despite a high growth rate achieved by the Madhya Pradesh government especially in the agrarian sector, there had been no decline in poverty or improvement in the human development indicators in the State, said N.K. Singh, Chairman of the 15th Finance Commission.
Speaking to reporters in Bhopal on Thursday during a three-day visit of the commission to the State, Mr. Singh said the growth rate sustained by a series of stable State governments had a limited effect on its per capita income, which was well below the national average.
“The poverty ratio in the State is 33% as against 21% nationally. The State’s growth rate has had a limited effect on important parameters of the Human Development Index like the infant mortality rate, the maternal mortality rate, stunting and anaemia,” he added.
If the roadmap on health and education presented by the government to the commission was followed, he said, the State could achieve progress in the areas. “The public-private partnership model, if implemented adequately, can bring down poverty,” he said.
On the macroeconomic front, he said, the State’s performance had been satisfactory as the fiscal deficit of 3.2% was just marginally above the target of 3%. However, the Ujwal DISCOM Assurance Yojana (UDAY) was a burden on its finances.
Stating that power transmission and distribution losses were more than the scheme’s template in the State, he said, “The billing cycle, the collection cycle and subsidy given on electricity should be worked upon to improve the State’s fiscal and macroeconomic parameters.”
Answering a question on whether the commission would incentivise the State for its significant forest cover, Mr. Singh said, “The 7.5 % horizontal devolution formula for forest cover devised for the first time by the previous commission benefited several States including Madhya Pradesh. We’ll consider how this formula could be retained. And, we will study if policies for tribals and the Scheduled Castes need any changes.”
As for losses being incurred by State governments after the implementation of the goods and services tax (GST), he said the refunds process needed improvement. “Earlier, we had requested then Finance Minister Arun Jaitley to develop a dialogue mechanism between the commission and the GST council. We reiterated the request to Finance Minister Nirmala Sitharaman who had responded positively,” he said.
On the question of farmers’ loan waivers, he said it was up to the States to dole them out based on their fiscal space.
Considering that the commission had 30 applicants before it that consisted of State governments and the Centre, which wanted a fair deal, he told an aside: “The success of an institution is not based on how happy you make everyone, but that everyone remains in the same state of unhappiness, and that could be a measure of success.”
Earlier, Chief Minister Kamal Nath called upon the commission to compensate for the State’s expenditure on protecting its forests. He said the State needed special consideration as it was tribal-dominated and mineral-rich, and that there was a need for mineral-specific policies.
Mr. Singh assured the government that the commission would consider sensitively its issues and challenges within the ambit prescribed by the constitution.
