The Centre’s bid to keep Bihar chief minister Nitish Kumar in good humour has received a setback with a new government report coming up with a definition of backwardness in total variance with the Raghuram Rajan committee report.
The government had constituted Rajan committee to measure backwardness among different states to ensure bigger flow of the central funds to the states on index of backwardness. The committee had ranked Odisha as most backward followed by Bihar on basis of production, income and gross domestic product.
Now, a Planning Commission committee of members Mihir Shah and Abhijit Sen had ranked 365 districts on backwardness using a totally different parameter. The committee opted for seven variables derived from 2011 census including scheduled caste, schedule tribe population, literacy rate and household with access to electricity, drinking water and banking facility for the ranking.
“We think that the better way to measure backwardness is through population parameters and not consumption,” said a senior plan panel functionary. “Rajan committee ranked Bihar lower than Odisha on backwardness even though the former’s GDP is less than the latter.”
The Mihir-Abhijit committee report may throw a spanner in pushing the finance ministry’s constituted Rajan committee recommendations as its analysis are more detailed.
While the panel says its recommendations are limited to restructuring of Backward Regions Grant Fund (BRGF), it admitted that implementing the Rajan mechanism would be difficult. Three states — Kerala, Tamil Nadu and West Bengal — have already opposed Rajan committee.
The panel believes that Mihir-Abhijit committee formula will not result in reduction in allocation for states such as Bihar under BRGF but would result in more money for extreme backward blocks. In all, 365 districts should get money under new BRGF, of which 222 would be fully covered, the committee recommended.