News

States likely to get Finance Commission grants to upgrade statistical systems

Tina Edwin New Delhi | Updated on March 20, 2020 Published 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

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.