FINANCE COMMISSION GRANTS TO PANCHAYATI RAJ INSTITUTIONS

Key Highlights:

• The 15th Finance Commission allocated ₹236805.00 crore in grants to Rural Local Bodies across 28 states for the period 2021-26.
• A total of ₹221882.34 crore has been released, with ₹14922.66 crore remaining unreleased due to non-fulfilment of eligibility conditions by states/RLBs.
• Recommendations of the Finance Commission, a constitutional body, once accepted and laid before Parliament, cannot be altered.
• Panchayat is a state subject, with the Ministry of Panchayati Raj promoting decentralized planning through the Gram Panchayat Development Plan (GPDP).
• The eGramSwaraj portal facilitates planning, budgeting, accounting, and monitoring of Panchayat activities, with high GPDP upload rates nationally (over 96%) and in Andhra Pradesh (over 99%).

Detailed Insights:

• The unreleased grant amounts highlight the importance of states and Rural Local Bodies adhering to prescribed eligibility criteria.
• The Ministry of Panchayati Raj supports effective implementation of development works by encouraging participatory GPDP preparation involving Gram Sabhas.
• GPDPs integrate works and activities through the convergence of various Central and State schemes, enhancing local development.
• The eGramSwaraj-PFMS linkage ensures online fund transfers, promoting transparency and efficiency in financial management at the local level.
• The "Status of Devolution to Panchayats in States - An Indicative Evidence-Based Ranking, 2024" report assesses devolution effectiveness across six dimensions.
• This report indicates an increase in the extent of devolution from 39.9% to 43.9% between 2013-14 and 2021-22, strengthening grassroots democracy.

Key Concepts Involved:

• Finance Commission: A constitutional body that recommends the distribution of tax revenues between the Union and states, and grants-in-aid to states and local bodies.
• Panchayati Raj Institutions (PRIs): Local self-governing bodies at the village, intermediate, and district levels in rural areas, established under the 73rd Constitutional Amendment Act.
• Gram Panchayat Development Plan (GPDP): An annual plan prepared by Gram Panchayats through a participatory process to address local needs and priorities.
• eGramSwaraj portal: A digital platform launched by the Ministry of Panchayati Raj for online planning, budgeting, accounting, and monitoring of Panchayat activities.