The Raghuram Rajan panel report which has proposed a new index of backwardness to determine the number of underdeveloped states requiring Central assistance is under active consideration of the UPA Government, Finance Minister P Chidambaram told the Lok Sabha on Thursday.
The panel was formed in May last year to identify the backward states on the basis of measures such as the distance of the state from the national average on a variety of criteria such as per capita income and other indicators of development.
The panel was asked to suggest ways in which the fund absorptive capacity of states and their ability to use the funds to improve the well-being can be assessed and used to influence devolution to incentivise performance.
Chidambaram said the constitution of the committee had nothing to do with the status of any particular state, perhaps hinting at Bihar. He said the government wanted to identify all such states which on several parameters are far away from the average of India and to work out a mechanism by which those states can be helped.
On the issue of the devolution of funds, Chidambaram said norms had already been circulated among all the ministries concerned and they had been asked to give their suggestions and comments.
“That is also under active consideration. Let me assure this House that it is our intention to help the more backward states of India and the report is under active consideration,” he added.