In a major boost to the finances of Gram Panchayats and other rural local bodies – Mandal Parishads and Zilla Parishads – the State Government has recently doubled the per capita grant given to them annually.
The enhancement was part of many recommendations of the State Third Finance Commission (STFC) accepted by the State Government. Orders effecting the increase in grant from 2005-06 and provision for release of arrears were issued on the last day of 2013 and the State Legislature has ratified the Cabinet decision to accept the recommendations last month. Accordingly, the per capita grant of Gram Panchayats is enhanced from Rs.4 to Rs.8, that of Mandal Parishads from Rs.8 to Rs.16 and of the Zilla Parishads from Rs.4 to Rs.8 from 2005-06 onwards.
Similarly, the per capita grant of the urban local bodies -- Municipalities and Municipal Corporations – has been increased by 50 per cent from Rs.8 to Rs.12, also from 2005-06.
Further, the government has agreed to provide a special grant of Rs.18-crore per annum for five years for the construction of Gram Panchayat office buildings through alternate funding made available under the MGNREGS.
In addition, 3,064 Gram Panchayats with population up to 1,000 are given special grant of Rs.1-lakh per annum for providing basic amenities.
However, the State Government has turned down several recommendations of the STFC including release of Rs.42.08-crore every year from excise income to rural local bodies.
It has agreed to look into the proposal to pay 5 per cent income of the market committees to the local bodies instead of levying 5 per cent extra surcharge.
Though the State Government had constituted TSFC in January 2003 to apportion revenue, assign taxes and to suggest to grants-in-aid to the local self government units, it was reconstituted in 2004 but the commission had submitted its report very late in 2008. Its 63 recommendations pertained to the period from 2005 to 2010 involving Rs.1,763.72 crore.
A committee of ministers and secretaries constituted by the government later to examine the report had forwarded its suggestions to the Council of Ministers in December last.
