GUWAHATI, Feb 1 ? The awards of the successive Finance Commissions have not addressed the issue of the widening economic gap between Assam and the rest of the country. Besides, the awards have also ?handsomely added to this growing disparity?, rued the State Government in its memorandum to the Twelfth Finance Commission.
The First Finance Commission awarded transfer of 4.01 per cent of the total Central transfer to the State. The Second Finance Commission transferred 5.15 per cent of the total transfer and after that the percentage of transfer started sliding down gradually. The Seventh Finance Commission award provided for the transfer of only 2.49 per cent of the total transfer to the State.
It was somewhat rectified by the Eighth Finance Commission with an award of 4.07 per cent of the total transfer. But again, the State started to face the discrimination since the Ninth Finance Commission (3.73 per cent). And finally, the Eleventh Finance Commission award provided for the transfer of only 3.05 per cent of the total Central transfer, to the State, the memorandum said.
The memorandum therefore pleaded for steps to reverse this trend and restore the State?s share in the total Central transfers to the States at the level of the Second Finance Commission award, i.e., 5.15 per cent. It also pleaded the State?s case by saying that the State was unable to raise more internal resources.
The handicaps are- a predominant primary sector, 87 per of the population living in rural areas, more than 36 per cent of the population living below the poverty line, Gross State Domestic Product (GSDP) growth rate of about half of the national average, acute unemployment, with the educated unemployed numbering above 1.1 million, insurgency due to unemployment, sizeable SC and ST population, recurrent flood and erosion and migration, it said.
The poorer a State, the more are the requirements for expenditure on health, education and other basic services. This is a vicious cycle of a higher social expenditure responsibility and lower resource generation capacity, the memorandum said and pleaded for steps to help the State get out of this mire.
It also called for the immediate intervention of the Finance Commission to rectify the situation arising out of the March 2003 State-Centre Memorandum of Understanding (MoU) on Medium Term Fiscal Reforms Programme (MTFRP).
? In a federal polity like ours committed to the Fundamental Rights and Directive Principles of State Policy, we cannot but accept the fundamental duty of the nation-state to provide equal social and economic right and opportunity with reasonably equitable access to basic necessities for a dignified human existence to all our citizens??, it argued.
The memorandum also argued that the new economic policy of the country had helped the already advanced States much more than the relatively less advanced States. This trend needs immediate correction, it said. In favour of its argument, the memorandum said that 57 per cent of the total number of foreign investment (FDI) and 52 per cent of their value from August 1991 to June 2003 had gone to the five advanced States of Maharashtra, Karnataka, Tamil Nadu, Gujarat and Delhi.
The State has attained one more qualification for attracting fair treatment from the Twelfth Finance Commission. That is efficient management of its fiscal imbalance. Contrary to the practice of heavy borrowing adhered to by some other States, the State has relied more on its own efforts to overcome the imbalance.
Even the Deputy Chairman of the Planning Commission acknowledged this in his opening remarks in April 2003 at the time of finalization of Assam?s Annual Plan 2003-04. The Composite Fiscal Imbalances Management Index (CIMI) developed by the International Centre for Information Systems and Audit, Office of the Comptroller and Auditor General of India for 1996-2001, gave Assam the highest score of perfect one against an average index of 0.496 for all the States combined, the memorandum said.