OVER the last year, several Sarpanches in Guntur district of Andhra Pradesh have been protesting against the failure of the state to release the 15th Finance Commission (FC) grants and other funds to them. Amongst other concerns is the inability of the panchayat to get even day-to-day civic maintenance works done in the village including drinking water supply and sanitation.1
The question of limited finances for panchayat is not a new phenomenon. Despite the promulgation of the 73rd Amendment to the Constitution wherein states were mandated (wholly or partly) to constitute three levels of panchayats in rural areas and assign funds, functions, and functionaries to them, even today the status of devolution for even basic civic functions remains weak. As per the latest publicly available data on the status of devolution and fiscal and functional assignments to panchayats by the Ministry of Panchayati Raj (MoPR), of the 29 functions to be devolved to rural local bodies (RLBs), only five states reported devolution of all 29.2 Even in terms of expenditure responsibility, local government in India account for only 3% of total expenditures; in countries like China and the United States it is 51% and 27% respectively.3
The acceptance of the recommendation of the 14th FC was said to be a game changer in strengthening fiscal decentralisation. As a major departure from previous commissions, the 14th FC provided an unprecedented Rs 2,87,436 crore over five years directly to local bodies. For Gram Panchayats alone, Rs 2,00,292.2 crore was recommended.4 To put this into perspective, the figure was three times the recommendations of the 13th FC, which had recommended Rs 87,519 crore. The yearly quantum of funds was fixed to ensure greater predictability of finances and safeguard against buoyancy of revenues collected.
Publisher Page>
