MP asks Centre to focus on development of backward states

NEW DELHI: Madhya Pradesh on Saturday asked the Centre to concentrate on development of backward states like Bihar, Uttar Pradesh, Madhya Pradesh and Orissa to achieve the "formidable" growth rate of 8.0 per cent while seeking higher plan allocation.
"In order to achieve a growth rate of eight per cent, it is important to concentrate on backward states like UP, MP, Bihar and Orissa where levels of physical and social infrastructure are very low and impose constraints on economic growth," MP Chief Minister Digvijay Singh said at the National Development Council meeting.
Singh said it was necessary to increase the shareable union taxes to 33 per cent of the nest proceed of the centre while lamenting on the decreaisng tax to GDP ratio.
"The declining tax to GDP ratio had decreased Centre''s devolution to states in contrast to the need of raising resources to achieve this high growth," he said while stressing the need to supplement resources of the States.
Singh also pointed out the need said to narrow the gap between thinking of North Block and Yojana Bhavan on economic policies especially on norms for debt and contingent liabilities.
Pointing out the divergence, Singh said debt swap scheme formulated by North Block envisages increased market borrowings to States to retire old high cost debt but the Plan document did not mention it.
Singh also sought correction of vertical distribution of market borrowings which was highly biased towards centre.
"Correction and evolution of a formula of horizontal distribution that can partly correct historical distortions and bring in equity is needed," He said.
"It is very disheartening to note that even after five decades of development planning in our country the economic and social inequalities among states have not been reduced," he said.
Stating that the feature of plan financing brought more tears than smile to states as it comprised 70 per cent loan and 30 per cent grant, Singh called for changing composition of the plan grants to 50 per cent each.
He said Centre should also focus on increasing investment in agriculture sector especially in the wake of WTO regime.
"The Plan proposed only 5.0 per cent allocation to agricu ture which needs to be corrected," he said adding that the "governments will have to ensure that farmers benefited from WTO".