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    Gadgil-Mukherjee Formula 1992

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    Bhaskar Rao Gopisetti
    The Gadgil-Mukherjee Formula was developed to determine the allocation of central plan assistance to Indian states. It was first used during the 4th Five Year Plan from 1969-1974 and has been revised and used since to determine allocations. The key components of the current formula are: population (55%), per capita income (25% using deviation and distance methods), fiscal management (5%), and special development problems (15%). It aims to allocate funds based on the development needs and status of each state.

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    Gadgil-Mukherjee Formula 1992

    Uploaded by

    Bhaskar Rao Gopisetti
    200 views2 pages
    The Gadgil-Mukherjee Formula was developed to determine the allocation of central plan assistance to Indian states. It was first used during the 4th Five Year Plan from 1969-1974 and has been revised and used since to determine allocations. The key components of the current formula are: population (55%), per capita income (25% using deviation and distance methods), fiscal management (5%), and special development problems (15%). It aims to allocate funds based on the development needs and status of each state.

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    Gadgil-Mukherjee Formula 1992

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    The Gadgil-Mukherjee Formula was developed to determine the allocation of central plan assistance to Indian states. It was first used during the 4th Five Year Plan from 1969-1974 and has been revised and used since to determine allocations. The key components of the current formula are: population (55%), per capita income (25% using deviation and distance methods), fiscal management (5%), and special development problems (15%). It aims to allocate funds based on the development needs and status of each state.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    200 views2 pages

    Gadgil-Mukherjee Formula 1992

    Uploaded by

    Bhaskar Rao Gopisetti
    The Gadgil-Mukherjee Formula was developed to determine the allocation of central plan assistance to Indian states. It was first used during the 4th Five Year Plan from 1969-1974 and has been revised and used since to determine allocations. The key components of the current formula are: population (55%), per capita income (25% using deviation and distance methods), fiscal management (5%), and special development problems (15%). It aims to allocate funds based on the development needs and status of each state.

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    2/1/2017 GadgilMukherjeeFormulaArthapedia

    GadgilMukherjeeFormula
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    Upto3rdFiveYearPlan(FYP)[196166]andduringPlanHoliday(196669),allocationofCentralPlanAssistancewasschematic
    andnoformulawasinuse.TheGadgilFormulacomprising(i)Population[60%](ii)PerCapitaIncome(PCI)[10%](iii)TaxEffort
    [10%](iv)OngoingIrrigation&PowerProjects[10%]and(v)SpecialProblems[10%]wasusedduring4thFYP(196974)and
    5thFYP(197478).

    However,sinceitem(iv)wasperceivedasbeingweightedinfavourofrichstates,theformulawasmodifiedbyraisingthe
    weightageofPCIto20%.TheNationalDevelopmentCouncil(NDC)approvedthemodifiedGadgilformulainAugust1980.It
    formedthebasisofallocationduring6thFYP(198085),7thFYP(198590)andAnnualPlan(AP)199091.Followingsuggestions
    fromStateGovernments,themodifiedGadgilFormulawasrevisedtoPopulation(55%),PCI[25%{20%bydeviationmethodand
    5%bydistancemethod}],FiscalManagement(5%)andSpecialDevelopmentProblems(15%).However,itwasusedonlyduring
    AP199192.

    DuetoreservationsofStateGovernmentsonrevision,aCommitteeunderShriPranabMukherjee,thenDeputyChairman,Planning
    Commissionwasconstitutedtoevolveasuitableformula.ThesuggestionsmadebytheCommitteewereconsideredbyNDCin
    December1991,wherefollowingaconsensus,theGadgilMukherjeeFormulawasadopted.Itwasmadethebasisforallocation
    during8thFYP(199297)andithassincebeeninuse.Aftersettingapartfundsrequiredfor(a)ExternallyAidedProjectsand(b)
    SpecialAreaProgramme,30%ofthebalanceofCentralAssistanceforStatePlansisprovidedtotheSpecialCategoryStates.The
    remainingamountisdistributedamongthenonSpecialCategoryStates,asperGadgilMukherjeeFormula.

    GadgilMukherjeeFormula

    I Criteria Weight Remarks


    II Population(1971) 60%
    PercapitaIncome 25%
    CoveringstateswithpercapitaSDPbelownational
    a)Deviationmethod 20%
    average
    b)Distancemethod 5% Forallstates
    III PerformanceinTaxEffort,FiscalManagementand 7.5% Taxpolicy[2.5%],FiscalManagement[2.0%],
    ProgressinrespectofNationalobjectives National

    objectives[3%]comprisingpopulationcontrol(1.0%),
    eliminationofilliteracy(1.0%),timelycompletionof
    ExternallyAidedProjects(0.5%)

    andlandreforms(0.5%)
    IV SpecialProblems 7.5%

    Contributedby
    SudhirTewari,IES(1985)(http://www.ies.gov.in/myaccountprofileview.php?memid=106)
    Emailsudhirtewari@hotmail.com(mailto:sudhirtewari@hotmail.com)

    Retrievedfrom"http://www.arthapedia.in/index.php?title=GadgilMukherjee_Formula"
    Category:Concepts
    http://www.arthapedia.in/index.php?title=GadgilMukherjee_Formula 1/2
    2/1/2017 GadgilMukherjeeFormulaArthapedia

    Thispagewasfirstcreatedon17October2011,at06:32andlastmodifiedon17October2011,at06:32.
    Thispagehasbeenaccessed19,779times.

    http://www.arthapedia.in/index.php?title=GadgilMukherjee_Formula 2/2

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