The recently-released report of the Raghuram Rajan Committee on the economic statuses of different State has come as a slap on the face of Odisha CM Naveen Patnaik.
Contrary to Patnaik's tall claim that Odisha has been on the trajectory of rapid development on all fronts during his 14-year-old BJD rule, the finding of Rajan, a top economist who recently assumed as the head of the Reserve Bank of India, says that Odisha is the country's poorest States.
This negates Patnaik's assertion of State achieving an average 8% growth in last five years and being in a position to fund its own programmes. The Rajan Panel report shows that Odisha has relegated to position as the "least developed" State, leaving Bihar, the earlier-poorest State, to the second position in this category.
An analysis of Rajan report gives a clear picture that the conditions of people in Odisha have not improved; the social infra in State are wanting; and the human development index is very low. Rajan Committee has divided States into three groups, least developed, less developed and relatively developed, taking into consideration the Multidimensional Index (MDI). To categorise the States, Rajan has taken indicators like poverty rate, female literacy, per capita expenditure, child mortality, attendance in primary school, facilities like drinking water, sanitation, electricity, telephone/mobile phone in home, Scheduled Tribe and Scheduled Caste population, urbaniaation and road (National Highway and State Highway) and railway line in every 100 sqkm area.
And among the 10 States identified as least developed, Odisha is categorised as the worst one. As the critics of Naveen Patnaik say, he has been raising the bogey of the Central UPA Government's step-motherly attitude towards Odisha' development only to divert attention from his prolonged regime's failure in improving the lots of the people of the State. Blaming the Centre for not granting Special Category State (SCS) status for Odisha is his latest political strategy ahead of the general elections, they say.
In fact, the Rajan Committee went into the demands of various undeveloped States like Odisha for according the SCS tag to them. Instead, the committee chose to come out with a categorisation of the States into the three aforesaid groups. If the Centre accepts the Rajan report then there would be no SCS concept.
Coming to economics, the Rajan Committee's recommendation is certainly going to benefit Odisha, opine observers. The committee has recommended that 8.4 per cent of the total Central devolution fund would be equally distributed among the 28 States at a fixed rate of 0.3 per cent. And three-fourths of the remaining 91.6 per cent would be distributed on the basis of requirements and one-fourth on the basis of efficiency. Moreover, the Centre may provide special assistance to States for their equitable development.
On the basis of this recommendation, Odisha would be benefited the most as the Central devolution would become 6.53 per cent against 4.6 per cent at present. The report will be a major instrument in the hands of State Govt in demanding more funds from the 14 Finance Commission, which will be visiting the State in December, point out economic experts.
Under the 13 Finance Commission awards, Odisha is entitled to getting Rs 78,974.90 crore in five years. This would be almost doubled when the Rajan panel report would be implemented. But, as observers say, Naveen Patnaik, for his own political reasons, has rejected the Rajan report and said his Government would continue with its demand for SCS status.
In view of the Rajan report, the Patnaik Government needs to reposition its development agenda. It is not the high growth rate and high per capita income which push the Human Development Index (HDI), said a former Minister of Finance. The skill to earn and the capacity to spend bring in the inclusive growth and an overall development of the State. Clamouring for Central fund is alright, but what is more important is efficient use of the fund, which Odisha lacks, he said.