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Friday, September 27, 2013

TN status up, but Central funds may come down


The Raghuram Rajan committee on devolution of funds to States seems to have dealt a blow to Tamil Nadu in terms of allocation of funds.

Tamil Nadu’s score in terms of underdevelopment/need index is 0.341 as per the panel report of Raghuram Rajan
 

A cursory perusal of the report reveals that the State stands to lose 50 %of what it has been getting which, it feels, is much less than what it deserves. 

Using the figures of releases of grants and shares in Central taxes/duties for 2011-2012, the report said that the share of Tamil Nadu in allocation was 5.01 per cent. The report recommended that this may be reduced to 2.51 per cent. 

What this means in money terms will be that the State, which is expecting to receive about Rs. 26,160 crore during the current year, would be given around Rs. 13,080 crore if the recommendations were to be implemented immediately.

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