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Jayalalithaa rejects Raghuram Rajan committee's state-aid report

Oct 02 2013, 13:42 IST
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Report has excluded important dimensions of development and should not be used in any form, Jaya said. (PTI) Report has excluded important dimensions of development and should not be used in any form, Jaya said. (PTI)
SummaryReport has excluded important dimensions of development; should not be used in any form, Jaya said.

Rejecting the Raghuram Rajan Committee report for "skewed" allocation formula, Tamil Nadu Chief Minister J Jayalalithaa has said it was a "thinly disguised attempt to provide an intellectual justification to deliver resources to a potential political ally."

"The background to the constitution of the Committee was the repeated demand of the Government of Bihar to confer 'Special Category Status' on it to enable greater fund flow to the state to address its developmental deficit," she said in a letter to Prime Minister Manmohan Singh dated October 1, 2013.

The letter was released by the state government on Wednesday.

She rued that the Report of the Committee for Evolving a Composite Development Index of States, also known as Raghuram Rajan Committee, had excluded important dimensions of development, including per capita availability of water and performance indicator of states.

The report was submitted to Finance Minister P Chidambaram recently.

"The completely skewed allocation formula which the Committee has recommended severely penalizes states which have consistently worked towards national goals of development and welfare. It pushes resource allocation to populous states which have historically underperformed," she said.

She said smaller states, regardless of their status of development, were protected because of the fixed 0.3 per cent share recommended for all states, regardless of size.

"It is quite apparent that this hurriedly drafted report is a thinly disguised attempt to provide an intellectual justification to deliver resources to a potential political ally," she said without naming anybody.

It was also an attempt at meeting the "political objective of the mentor of the report," she added.

States that suffer most in the proposed formula were the relatively large ones which over the last several decades had consistently performed well due to their own efforts,she said.

She said the allocation formula was further skewed by the proposal to square the underdevelopment index so that least developed states would get disproportionately more resources.

"This is a highly unfair mechanism. Using mathematical jugglery to disproportionately increase resource allocation to a selected group of states is invidious and an attempt to rob Peter to pay Paul," she contended. Jayalalithaa said if the Committee's recommendations were applied, her state would receive on a per capita basis, less than half of what would be transferred by the Centre on an average per capita basis and one-fifth of the highest per capita allocation for a Non-Special Category state.

This was a "regressive, unfair and completely perverse outcome," she said.

"The bulk of transfer of

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