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was a mandate by the NDC.
“Poverty issues are now far more dynamic than state level aggregation”, he said. The Rajan panel had determined backwardness on a 10-point criteria at the state level.
“Our experience shows even among the backward states it is the relatively better off regions that draw in disproportionately higher funds,” said Ahluwalia.
RBI data shows transfer of Central funds to state governments make up about 16 per cent of the total revenue of the latter. From the total tax revenues states get about 32 per cent as per the 13th Finance Commission award.
There are currently four methods through which central assistance to states is handed out. All of these are more than a decade old. The finance commissions come up with its own formula for distribution of tax funds, every fifth year.