The SBI Research report highlights that under the new VB-G RAM G fund sharing framework, states are projected to gain approximately Rs 17,000 crore compared to the average allocation of the last seven years.
This estimate is derived from a normative assessment focused on equity and efficiency across seven parameters. The assessment aims to provide adequate fiscal space to states with greater structural needs and to incentivize those that effectively utilize financial resources for employment creation and asset development.
It concludes that, in a hypothetical scenario, all states except two would experience gains, with Uttar Pradesh and Maharashtra identified as the largest beneficiaries, followed by Bihar, Chhattisgarh, and Gujarat.
The report emphasizes that using objective criteria will enhance fiscal devolution while maintaining a balance between equity and efficiency. States can further increase their gains through their contributions of 40%.
Source – sarkaritel.com
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