The State government will be awarding incentive bonuses to 219 grama panchayats for effective collection of their tax revenue. But none of the municipal Corporations in the State has made the cut, while only three municipalities were able to win the incentives. The incentive system is as per the recommendations of the fifth State Finance Commission report submitted in 2015.
The finance commission had recommended that local governments which have tax revenue be rewarded for efficiency in revenue mobilization. Grama panchayats which have collected in the previous year not less than 97% of the total revenue demanded will be given an annual revenue collection incentive bonus of ₹5 lakh each. An amount of ₹5 crore from the share of general purpose fund available to grama panchayats is set apart for the purpose.
In the case of urban local governments the percentage of tax collection over demand can be 95%. The annual revenue collection incentive bonus for municipalities is recommended as ₹10 lakh per municipality and ₹12.50 lakh per municipal Corporation. A sum of ₹1 crore in the case of municipalities and ₹50 lakh in the case of municipal Corporations has been earmarked for this.
The incentives
As the available funds are not sufficient to award the recommended amounts, the government has decided to award ₹2.28 lakh each to the 219 grama panchayats. The three municipalities will each be awarded ₹10 lakh each. The municipalities which won the incentives are Neyyattinkara in Thiruvananthapuram district and Taliparamba and Aanthur in Kannur district.
After the allocation of the incentive bonuses and the revenue gap funds to the local bodies, ₹35.39 crore is remaining in the general purpose fund. This will be divided among all the local bodies, with a higher allocation for each of the municipal corporations.
