Composite Development Index (for backwardness of states)

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Composite Development Index: 2013

Govt seeks to woo Nitish with new backward state measure

Politics Rides On Rejigging Aid Formula

Sidhartha TNN

The Times of India 2013/08/14

New Delhi: An expert committee under chief economic adviser Raghuram Rajan has identified 10 parameters for a new Composite Development Index, whose adoption by the Centre will change the way thousands of crores are transferred annually.

The new index seeks to rate states on the basis of their distance from the national average on parameters including poverty rate, consumption, education, health, female literacy, urbanization, household amenities, connectivity, financial inclusion and share of SCs/STs in total population.

Some states like Bihar have insisted on the inclusion also of per capita energy consumption among the measures of development.

COMPOSITE DEVELOPMENT INDEX

The new CRITERIA will INCLUDE

Education

Health

Poverty rate

Monthly per capita consumption

Female literacy

Share of SCs & STs in total population

Rate of urbanization

Financial inclusion

Connectivity

Household amenities

Current classification

Under the current classification, Bihar and many other Bimaru states (a club of underdeveloped north Indian states) don’t qualify to be treated as backward and, hence, deserving of special assistance that accrues to the seven northeastern states, Sikkim, J&K, Himachal and Uttarakhand.

The proposed index will be the basis for the new system of special assistance running into thousands of crores to certain states and will replace the existing method based on geographical factors and terrain.