Goa for new rules on fund allocation

PANAJI, DEC 3: Political uncertainty at the Centre following the Gujral Government's submission, is having an adverse fallout on the functi...

PANAJI, DEC 3: Political uncertainty at the Centre following the Gujral Government8217;s submission, is having an adverse fallout on the functioning of the states. Goa Chief Minister Pratapsing Rane admitted at his Cabinet briefing that the economic stability of the state had been severely affected due to resource crunch as the state had not been able to pursue its demand for higher allocation from the Centre.

Rane put forward the case for the Centre to evolve a new formula for central allocation to states as the Gadgil-Mukherjee formula followed at present does not do proper justice to states like Goa. One basic drawback of this formula is that it seeks to penalise the states which are finally prudent, while others get larger allocation of central funds, said the C M.

Central assistance to Goa had dropped sharply from 87.8 per cent to a mere 27.9 per cent for the current financial year, and this was directly due to the new norms prescribed by the Gadgil formula for allocation to states, Rane complained. Although Goa had accomplished the national targets set for the year 2001 in social sectors like birth rate, death rate, public health and literacy much ahead of the schedule, the state instead of being rewarded for it, is sought to be punished by reducing central allocation, he pointed out.

The Chief Minister argued that cutting central assistance because the population was low, does not make much sense as the infrastructure set up has to be maintained and improved. He said Goa needed additional funds to construct better roads and bridges.

Rane said that Goa8217;s contribution to the nation8217;s foreign exchange earnings was substantial. It was as high as Rs 2300 crores mainly from mineral ore exports, tourism, and NRI remittances. The Chief Minister made out a strong case that at least 10 per cent of this amount should be ploughed back to the state to mitigate its current financial hardship affecting economic activity.Rane8217;s cabinet approved a hike in the rates of power and water tariff. Although the revised rates are expected to hit consumers hard, the CM said the power and water tariff would be lower than those in the neighbouring states.