Report of the Committee for Evolving a Composite Development Index of States

This report however, also takes a step forward in trying to draw a balance between “needs” and “performance”. Given that poor administration or weak institutions in a recipient state can fritter away allocated resources to the detriment of the population, there should be some recognition for effective governance and the efficiency of resource use. This becomes all the more necessary since the proposal to give substantially more to underdeveloped states might create a mild disincentive to develop. The Committee therefore settled on improvements to a state’s development index over time (that is, a fall in underdevelopment) as the measure of performance.