145;Link fund transfer to performance146;

With the Union Budget round the corner, the National Advisory Council headed by Congress President Sonia Gandhi, has suggested to the UPA go...

With the Union Budget round the corner, the National Advisory Council headed by Congress President Sonia Gandhi, has suggested to the UPA government that it should rethink the modalities for fund transfer from the Centre to the states.

8216;8216;The states could be placed in three categories8212;those with per capita income below the national average, those above the national average and the Special Category States such as the Northeast and the hill states,8217;8217; a recent communication from the NAC to the government says.

The suggestions, NAC feels, merit 8216;8216;priority attention8217;8217; in order to find ways to improve the satisfaction levels of the common man. 8216;8216;Different kinds of distortions have, over the years, obstructed the path of resource allocations reaching the intended beneficiaries.8217;8217;

Taking a leaf out of the corporate sector, the NAC is mooting that the Central government8217;s annual transfer of funds to states should be performance-linked. Good governance in states, the NAC opines, could be quantified by constructing an index of comprehensive indicators such as the Infant Mortality Rate, extent of immunisation, literacy rate for women, child sex ratio, market wages for agricultural labour, availability of safe drinking water, electrification of rural households, percentage of girls married below 18 years and number of Class-I government officials prosecuted and convicted for corruption.

The NAC further suggests that an annual fund of 8216;8216;about Rs 10,000 crore could, perhaps, be created in the Planning Commission to augment the plan resources of those states who undertake to improve their Index of Governance8217;8217;.

In such a scenario, splitting the states into three categories, based on their per capita incomes, would ensure that the poorer states would not be competing with the better off ones. Taking the performance-linked idea one step further, the NAC even suggests that the transfer of funds from the Centre and the states to the panchayats, should also be linked to the performance of the local bodies. For instance, the transfer of funds can be linked to the panchayats8217; efforts in population and disease control, cleanliness, school attendance of girls and their performance.

Hunger deaths, crime, civil and revenue suits could be considered as negative marks on panchayats8217; report cards. 8216;8216;Panchayats should, thus, be graded and the quantum of funds, as also the degree of autonomy, linked to their grading,8217;8217; the NAC propounds.