What was the primary objective of the “Gadgil Formula”?
Show answer & explanation
Correct answer: A
Explanation
Answer: To determine the allocation of central assistance for state plans in India.
Explanation:
The Gadgil Formula is named after the renowned economist Dhananjay Ramchandra Gadgil. It was adopted in 1969, during the Fourth Five-Year Plan, to distribute central plan assistance to the states. Its primary objective was to ensure an equitable distribution of financial resources among the states. This formula was based on criteria such as population (60%), per capita income (25%), tax effort, and special problems. It was subsequently revised and came to be known as the 'Mukherjee Formula.'
Additional Points:
Objective: To reduce imbalances among states and provide financial assistance in a transparent manner.
Revision: Amendments were made to it in 1991 under the chairmanship of Pranab Mukherjee.
Potential Exam Questions and Answers:
Question: During which Five-Year Plan was the Gadgil Formula first implemented?
Answer: The Fourth Five-Year Plan.
Question: Which criterion is accorded the highest weightage in the Gadgil Formula?
Answer: Population (60%).