New mechanism needed on resource transfer to states: Prez

Noting that all states face similar challenges of poverty and lack of infrastructure in the path to development, President Pranab Mukherjee today batted for introducing a more effective mechanism for resource transfer from the Centre to the states.
"The basic objective of development planning is to fight against these (challenges)," he said while listing out poverty, backwardness, lack of infrastructure and diseases as the common problems faced by various states.
Mukherjee said while all the states in the country have distinct features, they face similar challenges.
The President was speaking here after receiving copy of a book 'The New Bihar - rekindling governance and development'. The book was released by Noble laureate Amartya Sen.

The President also suggested taking a fresh look at the mechanism to transfer resources to the state governments beyond the statutory route.
"...Now if you want to do it and have a fresh look at it, perhaps time has come when we should concentrate on this and all stakeholders to put their heads together and find out if there could be a more appropriate mechanism through which the resources can be transferred (to the states)," he said.

Mukherjee was referring to the allocation of funds to the states by the Centre.
Recognising the higher resource requirements of the states relative to their resource raising powers, the Constitution mandates to transfer funds to the state governments through statutory transfer of tax receipts collected by Centre through the Finance Commission award.

In addition, the states access central plan funds through Centrally Sponsored Schemes (CSS) and Central assistance to State Plans.