Central aid to states should be flexible: Prez

Central assistance to any state should have flexibility to address special problems that it might be facing, President Pranab Mukherjee said here today.
At a function to mark birth centenary celebrations of late V P Naik in the backdrop of severe drought faced by the state this year, he recalled the former Chief Minister's speech at the National Development Council where he had opposed any formula-based approach for extending central aid to states.
"For the first time the concept of a formula-based central planned assistance to states was formulated at the time of fourth five-year plan which is known as Gadgil Formula.

"And during formulation of Gadgil Formula, Shri Naik made a speech at National Development Council. He pointed out that there should be adequate flexibility," he said.
Mukherjee said, "a straitjacket formula for central assistance to states may not always take care of special problems which the states may have. And surely many of us who are in the process of formulation and execution of the plan feel that lack of flexibility is not desirable."
Mukherjee said his first meeting with Naik took place when he was Minister of State for Banking and Finance in relation with the establishment of Regional Rural Banks and for providing institutional credits to farmers in rural areas.

The President said he was struck by Naik's knowledge of the conditions in rural India and plight of farmers.