Key Points
One of Indias most pressing problems is that its federal structure is facing increasing strain, with the southern states complaining for a while now about unfair treatment in resource allocation..
The complaints have only become louder with the 14th and 15th Finance Commissions adopting2011 Census data as the basis for population, as opposed to 1971 Census data as was the case previously. States in the Indo-Gangetic plains have had a much higher rate ofpopulation growthowing tohigher fertility rates, while southern India had stabilised its population in line with policy demands..
Themost glaringproblem in the federal structure and its resource allocation problemsbecomesapparentwhenone looks at the data it is that Uttar Pradesh is too big andcornersresources by virtue of its size, whichseemsunfair to other states...
A useful way to understand this problem is to look at the allocation ratios of Jharkhand, Chhattisgarh, and Uttarakhandstates carved out of Bihar, Madhya Pradesh, and Uttar Pradesh respectively...
Another state that benefits significantly from this exponential effect of population on allocation ratios is Maharashtra.Asthe second-largest state in population terms,Maharashtrahas avoided the fate of other industrialised and advanced states like Gujarat, Tamil Nadu, and Karnataka,which have experienced a significant reduction in their share ofdevolution,resulting inlarge negative residuals..
