Montek Ahluwalia justifies Centre's package for different states

New Delhi, June 6 (ANI): Responding to Tamil Nadu Chief Minister J. Jayalalithaa's disappointment with the Centre's annual economic package for her state, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the plan assistance is distributed to different states according to the Gadgil-Mukherjee formula, and emphasized that the weaker states needing more support get a much larger percentage.

"The Planning Commission plan assistance is distributed to different states according to the Gadgil-Mukherjee formula. And the stronger states, more established states get a much smaller percentage, whereas the weaker states that need much more support get a much larger percentage," said Ahluwalia.

"So, it is certainly true that for the most advanced states like Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat, the plan finance come from themselves. The purpose of an annual plan discussion is to be able to discuss with the states that what their priorities are, how well they are implementing many central schemes," he added.

The Gadgil formula was formulated with the formulation of the fourth five-year plan for the distribution of plan transfers amongst the states. It was named after the then deputy chairman of the Planning Commission Dr. D.R. Gadgil. Gadgil formula was adopted for distribution of plan assistance during Fourth and Fifth Five Year Plans.

Ahluwalia further said the Central Government gives money to different states also through several centrally-sponsored schemes.

"The Central Government gives money to states not just through plan assistance, but also through centrally-sponsored schemes, the National Rural Health Mission, the Sarva Siksha Abhiyaan, Mahatma Gandhi National Rural Employment Guarantee. All these money goes to the states, spent by the states; but it doesn't show in the state budget," he said.

Jayalalithaa had earlier on Monday hit out at the Planning Commission for its ever-increasing tendency to dictate terms to states on spending "their own money".

Jayalalithaa, who met Ahluwalia here on Monday, questioned the utility of the annual exercise of finalising budgets for states in consultation with the planning commission.

Jayalalithaa after the meeting said that the Centre had extended a help of just Rs. 3,000 crore in the total plan of Rs. 28,000 crore for 2012-13.

"The annual plan outlay for Tamil Nadu for 2012-13 has been fixed at 28,000 crore rupees. This is a nineteen percent increase over last years' plan outlay, but here out of these 28,000 crore rupees, only 3000 crore rupees is from the Centre; the rest of it is Tamil Nadu's own money," she said.

Expressing her unhappiness over the Central Government's assistance, Jayalalithaa said that the Centre sidelined all her demands for special package for her state.

"We have asked for special assistance, additional assistance under various heads but that was not forthcoming ;so what this entire exercise amounts to is that we have come all the way to Delhi to have discussions and meetings with the union Planning Commission so that they can tell us how to spend our own money," she said.

It may be recalled here that Gujarat Chief Minister Narendra Modi had also expressed his disappointment with the central funds allocated to his state. (ANI)