13TH FINANCE COMMISSION GRANT AWARD PERIOD (2010-15)
- 13th Finance Commission has devolved a share of divisible tax pool to Panchayats, instead of mere lumpsum, de-facto reorganizing the Panchayats as the third tier of governance.
- In terms of Guidelines issued by Ministry of Finance on 23rd September, 2010, the General Area Performance Grants and Special Area Performance Grants applicable from 2011-12, are released to the Local Bodies (PRls) subject to compliance of six conditions viz:
- reforms related to Budget and Accounts;
- technical Guidance and Supervision by CAG for audit of Local Bodies;
- transfer of funds to PRIs within 5/10 days;
- appointment of Ombudsman/Lokayukt;
- prescribing eligibilily qualifications for appointment of members of state finance Commission
- empowering PRIS to levy property tax.
- As per the guidelines of Ministry of Finance, a Central Monitoring Committee (CMC) meeting under the Chairpersonship of Secretary, Ministry of Panchayati Raj is held twice a year to monitor release of Basic Grants and to recommend release of Performance Grants to PRls.
STATE FINANCE COMMISSIONS (SFCS)
- Article 243-1 (1) of the Constitution of India mandates the constitution of a State Finance Commission at the expiration of every fifth year.
- Under this provision, the SFCs are entrusted with advising State Governments on the principles to be applied in determining the distribution between the States and Panchayats of net proceeds of taxes, duties etc. levied by State and the range of taxes and non-taxes to be devolved to Panchayats, etc.
- There has been a growing concern about the weak functioning of the SFCs in many of the States.
IMPLEMENTATION OF PANCHAYAT EXTENSION TO SCHEDULED AREAS (PESA)
- Though PESA Act was enacted in 1996, implementation by the States has not kept pace with the PESA provisions.
- In order to expedite the process, this Ministry issued comprehensive guidelines on 21st May, 2010 for effective implementation of PESA by the States.
- Model PESA Rules had also been circulated to the PESA States for adoptions.
- Andhra Pradesh, Himachal Pradesh and Rajasthan have framed Rules for implementation of PESA in the Scheduled Areas of their States.
- A Committee for harmonization of Central laws with PESA has also been formed under the Chairmanship of Law Secretary.
DEVOLUTION OF 3FS (FUNDS, FUNCTIONS AND FUNCTIONARIES)
- Under the scheme Rajiv Gandhi Panchayat Sashaktikaran Abhiyan (RGPSA), MoPR intends to provide funds to only those states that have fulfilled the following mandatory criteria:
- regular elections to Panchayats or local bodies in non-Part IX areas under the superintendence and control of the State Election Commission (SES);
- at least one third reservation for women in Panchayats or other local bodies;
- constitution of SFC every five years,
- placement of Action Taken Report on the recommendations of the SFC in the State legislature
- constitution of District Planning Committees (DPCS) in all districts and issuing of guidelines/ rules to make these functional.
- From 2014-15 onwards, 20% funds will be linked to the performance of States on various criteria including devolution of powers to Panchayats, creation of an enabling policy framework and enhancement of transparency and accountability at the Panchayat level.
