The Gadgil formula is due to D.R. Gadgil, the social scientist and the first critic of Indian Planning. It was evolved in 1969 for determining the allocation of central assistance for state plans in India. Gadgil formula was adopted for distribution of plan assistance during Fourth and Five Year Plans.[1]
According to this formula, allocation for states was based on 60 per cent of population, 10 per cent of per capita income, 10 per cent of tax effort, 10 per cent of on-going irrigation and power projects and the remaining 10 per cent of special problems.[2] This formula was modified in 1980 and the modified formula was the basis for allocation during the Sixth and Seventh Five Year Plans. As per the modified formula, the total weightage for on-going schemes and per capita income was 20 per cent.