CHANDIGARH, May 19: The Punjab Government has called for revision of the Gadgil formula for disbursement of financial resources by the Centre to the states.The State Government has raised the demand in a memorandum submitted by Finance Minister Capt Kanwaljit Singh to the special task force for devolution of powers to the states yesterday.It has been argued that the Gadgil formula, which is based mainly on population and income, needs to be changed to make it more objective and representative. The State Government feels that disbursement of financial resources according to population and per capita income, would amount to taking a simplistic view of the economic development in various states.The State Government has proposed that 10 per cent weightage should be given in favour of efforts made for population control and another 15 per cent to literacy. The weightage for tax efforts and fiscal management should be raised from 2.5 to 10 per cent, and that for special problems should be raised from 7.5to at least 10 per cent. Moreover, priority should be accorded to states like Punjab which have come out successfully out of a long period of terrorist disturbances. The Punjab government wants the Union Government to give royalty on foodgrains contributed to the central pool by the state to compensate for the subsidy on power to the farmers.The State Government supplies free power to run tube-wells and water for irrigation to the farmers in the state. With its contribution to the central pool being the highest, the state government has made this demand. It has referred to royalty charged by the coal producing states.The Finance Minister has argued that being at a locational disadvantage, thermal plants in the state were paying much more for coal. The freight charges to transport coal to Punjab were about 1.5 times its cost, adding to the cost of generation. Since Punjab is the major contributor of foodgrains to the central poll, it needs to be compensated for the freight to carry coal to the PunjabState Electricity Board thermal plants which contribute to the production of foodgrains.The State Government has also stressed the need to review the transfer of funds to the states through centrally sponsored schemes. The states should be given adequate discretion and flexibility to make changes in these schemes according to local requirements.
