The government plans to introduce a ranking system for states and districts on the basis of nutrition levels, according to a letter from NITI Aayog CEO Amitabh Kant to all state governments.
The Centre is also likely to institute a reward system for local administrations to encourage them to achieve their nutritional goals.
The top official at the government think-tank also called for a focused strategy across 201 districts in the country which have the highest percentage of children with stunted growth.
"The Government of India is considering the introduction of performance based incentives linked to the outcomes achieved by states and districts which would be monitored through an annual survey," Kant wrote to chief secretaries of all state governments in a letter last week.
The letter said "publication of ranks for the districts and states based on nutrition outcomes" was also being considered.
The National Nutrition Strategy unveiled by NITI Aayog recently aims at achieving optimal nutritional status for every child, adolescent girl and woman-- especially those from the most vulnerable communities-- by 2022.
The think tank has identified 10 nutritional indicators for improvement, which include infant mortality rate, under five mortality rate, maternal death rate, pregnant women with anaemia and children in the age group of 6-59 months with anaemia.
It also notes that there are wide disparities in nutritional indicators across various districts and, therefore, there is a need for focused intervention in areas with high levels of undernutrition.
Uttar Pradesh, Bihar and Madhya Pradesh are among the worst performing states, accounting for 57 per cent of undernutrition among the 201 districts.
In line with the national plan the letter urges states to fix targets for the next three years.
"What is not measured and monitored seldom improves. I request you to kindly fix the annual targets for the outcomes for the next three years in percentage points for the state as a whole as well as for the identified districts in your state/UT and intimate NITI Aayog within 15 days," it adds.
NITI Aayog has also set national targets. It seeks to reduce undernutrition levels in children up to three years of age by 15 percentage points until 2022 and bring down anaemia among children, adolescent girls and women by one third of NFHS-4 (National Family Health Survey 2015-16) level by 2020.
It has also proposed a nutrition surveillance system for tracking severely undernourished children.
Nearly every third child in India is undernourished -- underweight (35.7%) or has stunted growth (38.4%). About 21% of children under five years are wasted (low weight) under NFHS-4.
Moreover, the NFHS-4 data indicate that every second child is anaemic (58.4%).
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