By Prof. Abhilash S. Nair
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| Prof. Abhilash S. Nair |
Since
independence, successive governments have endeavored to develop an egalitarian
India whose economic development percolates to citizens living across the
country. A major step in ensuring this outcome has been the various studies
that have identified backwardness of different states in India. Accordingly,
the central resource allocation is channeled so as to bridge this development
gap. The Raghuram Rajan Committee report is yet another step towards achieving
this goal. The report emphasizes on an objective method of identifying
backwardness and linking it to central assistance to state, though this issue
is being independently studied by the thirteenth finance commission set up
under the chairmanship of Shri. Y.V. Reddy.
Any
report on central development assistance sets off a race, among the states, to
be backward. This report is no exception. The states that have garnered the
‘least developed’ status, seem to have no complaints against the report while
others seem to be upset about the report. Having said that, there are some
serious concerns which this report may look forward to address before being
taken up for implementation. As has been highlighted in many other commentaries
on this report, the dissent note by Dr. Shaibal Gupta addresses almost all the
concerns raised by academicians and policy makers. However, what is interesting
is the way in which the report deliberates and attempts to allay the concerns
raised by Dr. Gupta by looking at the impact at an aggregate level.
Interestingly, many states that may loose out on central assistance if the
report is accepted also raise the same concerns as Dr. Gupta. I shall be
commenting on some of these issues in the context of Kerala:
Excerpts from his recently published article in The New Indian Express on 19th October, 2013 Op Ed. For full article please visit http://epaper.newindianexpress.com/174148/The-New-Indian-Express-Kochi/19102013#page/9/2
Abhilash S. Nair is an Associate Professor of Finance, Accounting and Control at IIM Kozhikode.
Abhilash S. Nair is an Associate Professor of Finance, Accounting and Control at IIM Kozhikode.
Sir,
ReplyDeleteI see that the report has used equal weights for all the parameters, stating that PCA also yielded similar results. I too agree with you that the weights ought to be different. How, do you suggest the weights may be chosen? Any particular method that you may think of?
Thanks,
Souradip