States likely to get Finance Commission grants to upgrade statistical systems

Tina Edwin New Delhi | Updated on March 20, 2020

Grants to be linked to the number of districts in a State, made conditional on the achievement of milestones

In a move to upgrade the quality of statistics and make them more reliable for effective policy making, the Finance Commission is likely to provide ₹1,200-1,300 crore as grants to States when it finalises the final award later this year.

In its interim report submitted to the government last year, the Commission had committed that it would make some grants for statistics without getting into details. However, it had stated that the release of the grant would be conditional to the achievement of certain milestones.

The Ministry of Statistics and Programme Implementation (Mospi) had recommended to the Commission to make State-wise grants to strengthen their statistical systems. Upgradation of State level statistical system is vital to improve the quality of data collection, as well as for the creation of the planned National Integrated Information Portal (NIIP) for official statistics.

Sources said that the Ministry has recommended that the quantum of grants transferred to each State be linked to the number of districts in that State and the level of its statistical capacity and development.

Mospi had also suggested that the grants have a fixed and variable component. It had recommended that the fixed component should be ₹1 crore per district. The variable component could be inversely proportional to a State’s level of statistical capacity and development and performance on certain parameters.

Ranking States

The Ministry has assessed the statistical capacity of each State, assigned scores on 10 parameters and grouped them into three categories.

These parameters include performance on the compilation of district domestic product, the index of industrial production and consumer price index, participation in national sample surveys and the annual survey of industries as also the quality of infrastructure.

The Ministry has recommended that States with lower scores should be given ₹1 crore per district as a variable grant, while the good performers be given ₹50 lakh per district. Those with average scores can be given ₹75 lakh per district, the Ministry has recommended.

States such as Tamil Nadu, Kerala, Telangana, Karnataka, Uttar Pradesh and Gujarat are among States that scored higher and have been recommended a variable grant of ₹50 lakh per district.

Chhattisgarh, Punjab, Madhya Pradesh and Bihar are among those that scored poorly, and the Ministry has recommended that they be given ₹1 crore per district. Haryana, Maharashtra, Rajasthan and Himachal Pradesh got average scores and the variable grant component recommended for them is ₹75 lakh per district.

States are expected to vastly upgrade their capacity to collect and process data for real-time monitoring of the economy over the next five years.

This involves improvement in the compilation and release of annual district domestic product, compilation and monthly release of state-level index of industrial production and adoption of technology for improved capturing data, its validation and processing.

States are also expected to synchronise the base year revisions of various indices with the national revision, strengthen the monitoring mechanism for sustainable development goals and participate in new and regular surveys for data on important socio-economic sectors

Published on March 20, 2020

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