Central Aid to States

THE meeting of the NDCs committee on Central assistance to the States last week failed to agree on the criteria to determine distribution of Central assistance. This was not unexpected. What was significant was that for the first time the issues involved in allocation of Central assistance (other than the) part disposed of by the Finance Commission) were openly discussed. The Planning Commission has never spelt out the basis on which allocations for State plans have been made. At the NDC committee's meeting it came out that 70 per cent of the assistance has been allocated on the basis of population and the rest on the basis of the level of development of a State, its special needs, its own tax effort, etc. But how difficult it is to apply these criteria in practice was revealed when the committee set out to fix the weightage to be attached to each of them. What probably has been happening is that, while these so-called criteria might have been allowed to float about, the problem largely tended to solve itself because. Central assistance was so closely tied to specific projects and uses.