Following is an excerpt from an article in Bihar Times.

… fund flow from the center to states takes place in one of the following four ways:

  1. Proportionate Tax Devolution as specified by Finance Commission
  2. Grant in aid  again following the Finance Commission formula
  3. Central Investments (at sole discretion of federal government)
  4. Loans (at discretion of federal & state government)

It is obvious from the above mechanism that federal government enjoys absolute discretion only in the matter of central investments. Central benevolence towards specific states can be decided only on the basis of the investments it is making there.

For a judicious assessment of UPA led central government it would be pertinent to consider a period starting from 1st April 2004 till date. A cursory look at the figures for the period under consideration, as exhibited in the following chart, has an interesting story to tell. Four states, viz. Maharashtra, West Bengal, Uttar Pradesh and Gujarat, together make up for 50% of the central investments. In rupees terms, their share corresponds to one lac five thousand fifty five crores (INR 10,55,52,13,00,000) of the total central investments of two lac nine thousand and fifty crores (INR 20,90,47,34,00,000).  Further, a major chunk of this has been allocated to just two states that is Maharashtra at 16% and West Bengal at 15%. In contrast, Bihar got only 3.87% of the central investments. Madhya Pradesh (3%), Rajasthan (3%) and Orissa (2%) lagged further behind.

I am not sure how the above was calculated. But if the numbers are right then this should be brought to the notice of the Odisha government and leaders.  (Thanks to Kanhu Roul for the pointer.)