Rajan panel submits report, but no mention of special category status to Bihar

Patna,(BiharTimes): The Report of the Dr Raghuram Rajan Committee for Evolving a Composite Development Index of States has identified Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Meghalaya, Odisha, Rajasthan and Uttar Pradesh as the “Least Developed” States while Goa, Kerala, Tamil Nadu etc have been put in the criteria of the developed states.

State	Underdevelopment/ Need Index
Odisha	0.798	Least Developed
Bihar	0.765	Least Developed
Madhya Pradesh	0.759	Least Developed
Chhattisgarh	0.752	Least Developed
Jharkhand	0.746	Least Developed
Arunachal Pradesh	0.729	Least Developed
Assam	0.707	Least Developed
Meghalaya	0.693	Least Developed
Uttar Pradesh	0.638	Least Developed
Rajasthan	0.626	Least Developed
Manipur	0.571	Less Developed
West Bengal	0.551	Less Developed
Nagaland	0.546	Less Developed
Andhra Pradesh	0.521	Less Developed
Jammu & Kashmir	0.504	Less Developed
Mizoram	0.495	Less Developed
Gujarat	0.491	Less Developed
Tripura	0.474	Less Developed
Karnataka	0.453	Less Developed
Sikkim	0.43	Less Developed
Himachal Pradesh	0.404	Less Developed
Haryana	0.395	Relatively Developed
Uttarakhand	0.383	Relatively Developed
Maharashtra	0.352	Relatively Developed
Punjab	0.345	Relatively Developed
Tamil Nadu	0.341	Relatively Developed
Kerala	0.095	Relatively Developed
Goa	0.045	Relatively Developed

But interestingly, it has hardly mention any thing specific about granting the special category status to Bihar, which is the main demand of the Bihar chief minister Nitish Kumar and for which he organized rallies in Patna and New Delhi.

The Committee, which had been asked to suggest methods for identifying backwardness of States using a variety of criteria and also to recommend how the criteria may be reflected in future planning and devolution of funds from the Central Government to the States, submitted its report to the Union Finance Minister P.Chidambaram on Yhursday.

In a statement Chidamabaram informed that the Prime Minister has approved the proposal to place the report of the Committee in the public domain. He said that the Prime Minister had also directed that the recommendations of the Committee may be examined and necessary action in this behalf may be taken.
Chidamabaram said that the Committee has proposed a general method for allocating funds from the Centre to the States based on both a State’s development needs as well as its development performance. The Committee has recommended that each State may get a fixed basic allocation of 0.3 percent of overall funds, to which will be added its share stemming from need and performance to get its overall share.

The Committee has come-up with a multi-dimensional index of backwardness based on per capita consumption as measured by the NSSO, the poverty ratio, and a number of other measures which correspond to the multi dimensional approach to defining poverty outlined in the 12th Five Year Plan. The Committee has recommended that States that score 0.6 and above on the Index may be classified as “Least Developed”; States that score below 0.6 and above 0.4 may be classified as “Less Developed”; and States that score below 0.4 may be classified as “Relatively Developed”.

The Committee has observed that the demand for funds and special attention of different States will be more than adequately met by the twin recommendations of the basic allocation of 0.3 per cent of overall funds to each State and the categorisation of States that score 0.6 and above as “Least Developed” States.

According to the Committee, these two recommendations, along with the allocation methodology, effectively subsume what is now “Special Category”.

Chidambaram said the Ministry of Finance, Department of Economic Affairs has been asked to examine the report and take necessary action.

The panel was led by Raghuram Rajan, former Chief Economic Adviser in the Finance Ministry and the present Governor of Reserve Bank of India while the other five members of the Committee were Shaibal Gupta, member-secretary of the Asian Development Research Institute, Patna; Bharat Ramaswami, professor, Indian Statistical Institute; Prof Najeeb Jung, Vice-Chancellor of Jamia Millia Islamia University (now Lieutenant Governor of Delhi ); Niraja G Jayal, a professor at the Centre for the Study of Law and Governance, Jawaharlal Nehru University; and Tuhin Pandey, adviser, Planning Commission.

As reported earlier the panel was apparently formed by the Centre to finalise the new criteria to determine backwardness of states for granting special category status and was asked to submit its report in two months.

Earlier, Union Finance Minister P Chidambaram had promised in his Budget speech in February that the criteria would be revised to include states such as Bihar.

But what is ironical is that the granting of special category status was not in terms of reference when Rajan committee was constituted. BiharTimes highlighted this aspect much earlier. It was only after that Sushil Modi, who was the deputy chief minister of the state when the Committee was formed, raised the same issue.