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Politicking begins over Raghuram Rajan panel report


Reported by Chinmaya Dehury/Edited by Sandeep Sahu

Bhubaneswar, Sep 26:

Politics over the Raghuram Rajan panel report on special Central allocation to underdeveloped states is hotting up in the state. While the Congress has welcomed the new formula of assistance proposed by Rajan, the ruling BJD has termed it ‘lollipop’.


In its report submitted to the Finance ministry, the Rajan committee has proposed the abolition of the present system of according special category state under which the most underdeveloped states get special grants and proposed a new formula under which each state would get a fixed basic allocation and an additional allocation depending on its development needs and performance instead.

Chief Minister and BJD supremo Naveen Patnaik led the charge on the Rajan committee report saying; “We have been demanding special category status for the last 40 years. These include central allocation on 90:10 basis and tax exemption for new investments. The UPA government and Congress leaders gave the impression that Raghuram Rajan committee will address this issue. Unfortunately, we find that while Odisha has been categorized as a least developed state, special category status has not been accorded to us.” Patnaik vowed to continue fighting ‘for the cause’.

Describing the promise of special grants under the new formula to states like Odisha as a ‘lollipop’, Panchayati Raj minister Kalpataru Das said; ‘While we know that we would get 90% of central assistance as grants, nobody knows what we would get what amount we would receive following the implementation of the report.”

The report has ranked Goa and Kerala as the most advanced states in the country and Odisha and Bihar the least developed. It has suggested a new methodology for devolving funds on states based on a ‘multi dimensional index (MDI).

Predictably, the state Congress has welcomed the report saying the state would benefit under the new fromula.

“Since Odisha is enlisted as the least developed among the 10 poor states, it will get more funds from the Centre, which will help the state to develop,” said Jayadev Jena, PCC president.

The demand for funds and special attention to States would 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 scores 0.6 and above as the least developed States, the Congress said.