In a major development, the State Government has asked the fourth State Finance Commission to examine the possibilities of commercialisation of public services like drinking water supply system, sanitation and street lighting, among others, in rural and urban local bodies by imposing user charges and updating rates of levies and taxes. The government has also asked the finance panel, constituted under the chairmanship of M.L. Kantha Rao, to examine privatisation of public transport system. It, however, wanted these to be done in a way that both public and private agencies are benefited and the people do get adequate services with affordable charges.
This one among the several terms prescribed by the Government to the finance panel that had been asked to submit its report by Dec 30 next year. The commission had been constituted to review the financial position of gram panchayats, mandal and zilla parishads, nagar panchayats, municipal councils and municipal corporations and suggest measures for distribution of finances between the State Government and them.
The commission would examine the distribution of the net proceeds of taxes, duties, tolls and fees between the State Government and the local bodies besides studying the determination of these taxes which might be assigned/apportioned to them. It would also consider the share of grants in aid from the consolidated fund of the State to the local bodies.
The commission had been entrusted with the responsibility of evolving measures needed to improve the financial position of the local bodies including steps needed for improving management of available resources. The Commission should asses the financial requirements of the panchayats and municipalities as well as the means for augmenting their resources to minimise dependence on additional financial support from the State.
The panel had been assigned the task of analysing the outstanding debt position in detail and give recommendations to establish sound equilibrium between their receipts and expenditures. Besides, it should also appraise the tax and non-tax efforts of the panchayats and municipalities and explore additional potential resources in order to uplift their financial position. The commission should make projections for the next five years based on the level of taxation and non-tax revenue sources including the ability to raise additional taxes, devolutions and grants from State Government and the 14{+t}{+h}Finance Commission.
