Q7. Discuss the recommendations of the 13th Finance Commission which have been a departure from the previous commissions for strengthening the local government finances.
Model Answer:
Introduction
The 13th Finance Commission (2009-2014) made landmark recommendations to strengthen local government finances, marking a shift from previous commissions by directly addressing fiscal autonomy and capacity-building for local bodies.
Body
Key Recommendations:
- Increased Grants: It recommended higher, unconditional grants to local governments, amounting to ₹87,519 crore, ensuring funds for basic services and infrastructure.
- Performance-Based Grants: Unlike prior commissions, it introduced performance-based grants, encouraging local governments to improve financial management, transparency, and accountability.
- Empowerment of Panchayats and Municipalities: The commission suggested direct transfers to panchayats and municipalities, enhancing their role in local development and reducing dependency on state governments.
- Incentivizing Revenue Mobilization: It advocated for incentivizing local revenue generation, pushing for better collection of property taxes and user charges.
Conclusion
The 13th Finance Commission’s recommendations were progressive, aiming to empower local governments financially and administratively, fostering self-reliance and improving service delivery at grassroots levels.
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