Prez for better transfer of resources to states

Noting that all states face similar challenges of poverty and lack of infrastructure in the path to development, President Pranab Mukherjee on Sunday batted for introducing a more effective mechanism for resource transfer from the Centre to the states.

"The basic objective of development planning is to fight against these (challenges)," he said while listing out poverty, backwardness, lack of infrastructure and diseases as the common problems faced by various states. Mukherjee said while all the states have distinct features, they face similar challenges. He was speaking after receiving a copy of 'The New Bihar - rekindling governance and development,' released by Noble laureate Amartya Sen.

The President also suggested taking a fresh look at the mechanism to transfer resources to the state governments beyond the statutory route."...perhaps time has come when we should concentrate on this and all stakeholders to put their heads together and find out if there could be a more appropriate mechanism through which the resources can be transferred (to the states)," he said.

Mukherjee was referring to the allocation of funds to the states by the Centre. Recognising the higher resource requirements of the states relative to their resource raising powers, the Constitution mandates to transfer funds to the states through statutory transfer of tax receipts collected by Centre through the Finance Commission award. In addition, the states access central plan funds through Centrally Sponsored Schemes (CSS) and Central assistance to State Plans.