NEW DELHI: In an apparent admission that Central fund flow to states is leading to inequities, the Economic Advisory Council (EAC) to Prime Minister in its second meeting has formulated course correction to incentivise states for achieving health, education and social inclusion outcomes.
“The EAC to PM in its second meeting formulated far reaching recommendations to guide evolving framework for the Fifteenth Finance Commission, including incentivization of states for achieving health, education and social inclusion outcomes,” said a senior official.
This newspaper had reported on November 1 that a NITI Aayog sponsored report had flagged off growing inequities among states. The report had stated that there had been a trend of increasing inequalities in infrastructure levels and human development causing divergence of incomes across different states. The report had advocated that the Centre should evolve appropriate guidelines for the 15th Finance Commission, which would soon be set up, to address the anomalies in fund allocations to states.
The Council is also evolving the design of a new Economy Tracking Monitor, linking economic growth indicators with social indicators for last mile connectivity.
Principal Advisor of NITI Aayog Ratan P Watal during his presentation before the EAC to PM shared recommendations on evolving framework for the Fifteenth Finance Commission, sources said.
The EAC to PM in its day long deliberations at NITI Aayog spelt out road map for stepping up enhanced resource investment in the social sector, including health and education, besides boosting Infrastructure financing. It may be recalled that the M Govinda Rao authored report had stated in the exhaustive study backed with statistical details that states with poor financial resources have not been able to fully utilise the Centre sponsored scheme in the social sector and infrastructure development.
Additionally, the EAC to PM sought to pay attention to the issue of job creation amidst reports that there had been job losses on account of demonetisation. The panel sought in the deliberations to lay stress on enhanced focus on skill development to accelerate employment generation in the country.
With the government having already unveiled the ambitious plan to pump-prime the economy through infrastructure development, the EAC to PM argued for according top priority to infrastructure financing, with mechanisms for a risk coverage umbrella in place.
The advisory panel also deliberated on ways to transform the gold market of the country in a bid to enhance employment prospects.
The EAC to PM is headed by NITI Aayog Member Bibek Debroy, besides part-time members Surjit Bhalla, Rathin Roy, Ashima Goyal, and Shamika Ravi.