New ‘development matrix’ may define share of states

NEWDELHI: The 15th Finance Commission is in the process of devising a “development matrix” of states based on their social indicators, especially in health and education, which will likely serve as a new parameter to decide the transfer of financial resources, such as taxes and grants, to them.

Finance commissions rely predominantly on income criteria, such as per capita incomes and growth, in deciding a state’s share in the nation’s financial resources. “But per capita incomes are not good enough a basis compared to a holistic development index… So, we felt that a development matrix will be a better guide,” chairman of the 15th FC, NK Singh, told HT.