The report of NITI Aayog titled “SDG India: Index and Dashboard 2020–21: Partnerships in the Decade of Action,” vividly portrays poorer states that lag behind the advanced states in the achievement of the sustainable development goals. This paper, which explores what hinders the effort of the poorer states in accessing resources from the centre and in reaching out to the poor, demonstrates that poorer states in India lag behind the less poor states in the implementation of development programmes, despite the fact that such programmes are conceived to offer opportunities to the poorer states to use central resources to augment their economic capacity in fighting deprivation and destitution. It also builds a model of public spending and tests the model with data using econometric methods. In addition, it applies the model to examine the question of low spending in poor states and offers concrete solutions. Using this model as a framework of analysis, governments can estimate the financial implications of structural reforms and stimulate their economies with welfare compatible allocation of resources.
