economics hard MCQ

The 'Gadgil-Mukherjee Formula', historically used by the Planning Commission to determine the allocation of central plan assistance to states, primarily gave the highest weightage to which criterion?

  1. Population of the state
  2. Per capita income and fiscal discipline
  3. Geographical area and forest cover
  4. Industrial output and tax effort

Answer: Population of the state

The Gadgil-Mukherjee formula was the cornerstone of federal resource distribution during the Planning Commission era. It assigned a massive 60% weightage to the state's population (based on the 1971 census) to ensure that resources flowed to states with the highest absolute number of people needing development, while the remaining weight was distributed among per capita income, fiscal management, and special problems.

Topic Indian Economy - Planning History
Exam Relevance UPSC Prelims, SSC CGL
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