The Hindu Business Line : More teeth for State finance commissions mooted

THE Union Ministry of Rural Development is planning to submit a detailed memorandum on the finances of Panchayat Raj bodies to the 12th Finance Commission, headed by Dr C. Rangarajan.

Speaking at a national workshop organised at the National Institute of Rural Development (NIRD), here on the issue, Mr M. Shanker, Secretary in the Ministry, said the second generation of meaningful democratic decentralisation has already started and stressed the need for more teeth to the State Finance Commissions (SFCs).

Mr Shanker also underlined the importance of internal revenue mobilisation by the Panchayat Raj institutions. The national workshop was organised to have a free discussion on all matters concerning the finances of the Panchayat Raj, before submitting the memorandum to the Finance Commission.

Dr A.V.S. Reddy, Director-General of the NIRD, in his address said the memorandum would be on the approach to be adopted by the Commission to strengthen panchayat finances, the methodology to be adopted and parameters to be selected to determine size of its grant, distribution among the states and other measures to be suggested by the Commission to make the panchayats institutions of self-governance.

He said the Ministry felt it was extremely necessary to take stock of the existing status of panchayat finances and the SFCs in the States, the measures to be taken by the Commission to strengthen the panchayat finances. The NIRD had conducted an exhaustive nation-wide study in 20 major states of devolution of functions and finances of panchayats for the 11th Finance Commission.

Secretaries of the State Departments of the Panchayatraj and Finance, Members and Secretaries of the SFCs from all major states took part in the day long workshop and explained the constraints, problems, status and other details of the respective organisations.

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