To bankroll new states, Centre asks UP, Bihar and MP for figures

Sources in the two ministries said a number of variables would come into play to set up a viable financial structure for the new states. “So far,” point out officials, “we only know basic facts, such as area and population of the proposed states. But nothing much is with us concerning crucial factors like per capita income and state domestic product, to name a few. We have asked the principal secretaries to provide us with all this data.”

Ironically — and this has added to the Government’s task — the 11th Finance Commission (for 2000-2005) came into existence prior to the announcement of the creation of the three states. Hence, nothing could be added about these.

One of the important tasks before the inter-ministerial team, it was stressed, was to gauge the “real financial needs” of Uttarakhand, Chattisgarh and Jharkhand which are quite different from each other.

The principal secretaries, sources said, have been assured of RBI’s assistance in shifting of funds from the existing states to the new ones and from the Centre to the states.

As for giving a special dole to Uttarakhand — the poorest and with the least infrastructure — the Planning Commission will have a major role to play. But Uttarakhand can ask for special grants only after it comes into existence.