SSC Economics Sample Paper NCERT Sample Paper-6

  • question_answer
    The Gadgil formula for transfer of resources from the Centre to states was used for the first time in-

    A)  Third five year plan     

    B)  Fourth five year plan

    C)  Fifth five year plan.      

    D)  Sixth five year plan

    Correct Answer: B

    Solution :

    [b] The Gadgil formula was formulated with the formulation of the fourth five-year plan for the distribution of plan transfers amongst the states. It was named after D.R. Gadgil, then deputy chairman of the Planning Commission. The central assistance provided for in the first three plans and annual plans of 1966-1969 lacked objectivity in its formulation and did not lead to equal and balanced growth in the states. The National Development Council (NDC) approved the following formula: 1. Special Category states like Assam, Jammu and Kashmir and Nagaland were given preference. Their needs should first be met out of the total pool of Central assistance. 2. The remaining balance of the Central assistance should be distributed among the remaining states on the basis of the following criteria: ? 60 percent on the basis of population; ? 7.5 percent on the basis of tax effort, determined on the basis of individual State's per capita tax receipts as percentage of the State's per capita income; ? 25 per cent on the basis of per capita state income, assistance going only to States whose per capita incomes are below the national average; ? 7.5 per cent for special problems of individual states.

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