Financing of State Five Year Plans in India

Non-Correspondence between allotted functions to each layer of governments and assigned source of revenues to perform them has become a characteristic features of almost all federations of the world. India, being a federation is no exception. Because of the limited fax powers available to the states under the constitution , their own resources fall short of their expenditure requirements for carrying out the assigned functions, introduction of planning in the country has further widened this gap by adding to the states requirements of resources. The problem is particularly difficult in case of relatively backward states, like Rajasthan. Where the need for accelerating the pace of economic development is much more pressing and hence a larger plan size is warranted. At the same time, capacity to raise resources is relatively less. The question of plan financing, therefore, assumes special significance for a backward state. This pioneering study attempts here to analyses the various sources of plan financing in Rajasthan over a period of sixteen years (1969-70 to 1984-85) and to explore the possibilities for further resources mobilisdation. Basic concepts related to plan financing have been dealt with in detail to the benefit of those who are less familiar with them. In spite of the data to the benefit of those who are less familiar with them. In spite of the data limitation, comparison with other states has also been attempted. The teachnique of Marginal fax rate, income elasticity of revenues and Multiple regression have been employed to adjudge the resource mobilization efforts of Rajasthan vis-?-vis other states. The book will surely prove benefit for post-graduate students, research scholars, planners, policy makers and for all those who are interested in provision of adequate financial resources to the state exchequer for implementation of larger and larger development plans.