Commissioner, Panchayat Raj
Government of Andhra Pradesh
Programs > Schemes > 14th Finance Commission > Guidelines
Article 280 of the Constitution of India requires the Constitution of a Finance Commission every five years, or earlier. For the period from 1st April, 2015 to 31st March, 2020, the 14th Finance Commission was constituted on 2nd January, 2013 under the Chairmanship of former Reserve Bank Governor Y.V. Reddy. The Commission submitted its report on 15th December, 2014. Central Government accepts the report in principle.
Devolution to states: States share in net proceeds from
tax collections be 42% a huge jump of 10% from 32% recommend by the
13th Finance Commission, and the largest change ever in the
percentage of devolution.
Big jump in
tax share: Compared with 2014-15, the total devolution to states
in 2015-16 will increase by over 45%.
Resource transfer: Tax devolution be the primary route resource
transfer to states.
NITI connect: The
government has accepted the recommendations in view of the spirit
of the National Institution for Transforming India (NITI).
Grants: Should be distributed to states for
local bodies on the basis of the 2011 population data; the grants
be divided into two broad categories on the basis of rural and
urban population constituting gram panchayats, and constituting
municipal bodies.
Types of grants: A
basic grant and a performance grant the ratio of basic to
performance grant be 90:10, with respect to panchayats; and 80:20
in the case of municipalities.
Total
grants: Rs 2,87,436 crore for a five-year period from April 1,
2015, to March 31, 2020; of this, Rs 2,00,292.20 crore to be given
to panchayats and Rs 87,143.80 crore to municipalities.
Grant transfers: For 2015-16, transfers will be to the
tune of Rs 29,988 crore.
Disaster
relief: The percentage share of states to continue as before and
follow the current mechanism to the tune of Rs 55,097 crore. After
implementation of GST, disaster relief will be given according to
the recommendations of the Finance Commission.
Post-devolution revenue deficit grants: A total of Rs 1,94,821
crore on account of expenditure requirements of states, tax
devolution and revenue mobilisation capacity of the states. These
will be given to 11 states.
Delinking
of schemes: Eight centrally sponsored schemes (CSS) will be
delinked from support from the Centre; various CSS will now see a
change in sharing pattern, with states sharing a higher fiscal
responsibility.
Cooperative federalism:
There are recommendations on cooperative federalism, GST, fiscal
consolidation road map, pricing of public utilities and PSUs, too..
⇨ Financial year 2016 Devolution of Net Taxes to States at
Rs.5.26 lakh crore.
⇨ States should use Extra
Fiscal Space for Productive Assets.
⇨ Fiscal
Situation of Centre-States combined remains a challenge.
⇨ Most of tax share proposals of Finance Commission have
been accepted.
⇨ Recommends omitting effective
revenue gap from Financial Year 2016.
⇨ GST Likely
to significantly boost government Tax Revenue.
⇨
Recommends Fiscal Deficit Ceiling of 3% financial year 2017
onwards.
⇨ Considerable scope for increasing
Tax-GDP Ratio.
⇨ Total devolution to states at Rs,
5.26 lakh crore in financial year 2016.
The Finance
Commission is required to recommend the distribution of the net
proceeds of taxes of the Union between the Union and the States
(vertical devolution); and the allocation between the States of
the respective shares of such proceeds (horizontal devolution).
The Finance Commission is also required to recommend on the
measures needed to augment the Consolidated Fund of a State to
supplement the resources of the Panchayats and Municipalities in
the State on the basis of the recommendations made by the Finance
Commission of the State.
The Finance Commission
is also required to make recommendation regarding the principles
governing grants-in-aid of the States revenues, by the Centre.
In addition to the recommendations regarding Vertical
and Horizontal devolution and grants, the 14th Finance Commission
has made certain other recommendations. These relate to
cooperative federalism, Goods & Services Tax, Fiscal Consolidation
Roadmap, Pricing of Public Utilities and Public Sector
Enterprises.
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| Grant | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2015-2020 |
|---|---|---|---|---|---|---|
| Basic Grant | 934.34 | 1,293.75 | 1,494.81 | 1,729.23 | 2,336.56 | 7,788.68 |
| Performance Grants | 0 | 169.70 | 192.04 | 218.09 | 285.57 | 865.41 |
| Total | 934.34 | 1,463.45 | 1,686.85 | 1,947.32 | 2,622.13 | 8,654.09 |
Against the allocation of Rs.934.34 crores for the year 2015-16 Government of India have been released an amount of Rs.928.41 crores and against the allocation of Rs.1463.45 crores for the year 2016-17 Government of India have been released an amount of Rs.1454.06 crores same has been distributed among the 13 districts as mentioned below:
1. The FFC grants released to the Gram Panchayats, shall be utilized for providing following Basic services in the Gram Panchayats.
1. Maintenance of CPWS Schemes and PWS Schemes. Since CPWS schemes
are not under the jurisdiction of GP, maintenance cost of these
schemes proportionately fixed by the authorities concerned, should
be paid by the Gram Panchayats concerned.
2.
Maintenance of sanitation including septic management.
3. Solid and Liquid Waste management.
4.
Maintenance and upgradation of internal roads along with drains.
5. Payment of CC charges / LED street lighting including
pending bills.
6. Not exceeding 10% of the
grant allocated to Gram Panchayat may be utilized for the
following Purposes for meeting the cost of the technical and
administrative support:
a. Salary of Accountant cum Data Entry Operator in the computer
center of cluster Gram Panchayat (Proportionately charged)
b. Salary of town Planning & Building Over seer (on
outsourcing basis) in each Mandal. The expenditure will be
charged proportionately;
c.
Salary/remuneration of technical staff working for O&M of water
supply and sanitation;
d. Remuneration for
the GP Development Plan Team and related expenditure for the
logistic support for preparation of plan;
e.
Remuneration for Social Audit Team Members and also expenditure
for conducting of Gram Sabha;
f. Purchase of
computer and other peripherals for computer center in cluster GP.
2. The performance grants will be released from the Financial year 2016-17 on certification of MoPR that the finalized scheme in this regard has been received from the State and it confirms to the recommendations of 14th FC. The following conditions have to be fulfilled to get performance grants.
(i) The Gram Panchayats will have to submit audited accounts of
receiptandexpenditurefor the year not earlier than two years
preceding the year in which seeks to claim the performance grant
and
(ii) The Gram Panchayats will have to show an
increasein their ownrevenues over the preceding years as reflected
in the audited accounts.
3. The performance grants are designed to serve the purpose of
ensuring reliable audited accounts and date of receipts and
expenditure and improvement in Own Source of Revenue(OSR) of Gram
Panchayats.
4. The following criteria shall be
adopted for release of Performance Grant.
a. The Gram Panchayats should adopt the model accounting system
and upload the data in PRIA Software,
b. The
Gram Panchayats should submit audited accounts that relate to
years not earlier three years preceding the year in which the Gram
Panchayat seeks to claim the Performance Grant. For example, for
claiming the Performance grant for the year 2016-17, the audited
accounts of the year 2014-15 which is approved by the Gram
Panchayat shall be submitted.
c. There should
not be any proved misappropriation of funds in the administration
of Gram Panchayats in the audited year.
d. Gram
Panchayats should conduct 4(four) statutory Gram Sabhas and
minutes of the Gram Sabha displayed in the website of the Gram
Panchayats i.e.,
appr.gov.in
e. The Gram Panchayat concern
should collect at least 70% of the total house Tax demand and 70%
of the other taxes and non taxesleavable under APPR Act for the
year 2015-16. The Gram Panchayats should upload the DCB Data in
RAPR Website, The Gram Panchayats will have to show an increase in
their own revenues over the preceding year as reflected in the
audited accounts and preceding financial year.
f. Gram Panchayats should upload the data into e-Panchayat
applications(Central and State) and update the same on regular
basis either with Panchayati Secretaries or with the services
taken from Date Entry Operators who are paid from the Gram
Panchayat funded as per norms.
g. Weightage for
allocation of funds under performance grant:
h.
Allocation among the eligible Gram Panchayats who fulfil the
Mandatory criteria as mentioned above will be made based on
following weightages indicated below and multiplied with the
population of the Gram Panchayat concerned.
| S.No | Criteria | Weightages |
|---|---|---|
| 1 | Total Own Source revenue (Taxes and Non Taxes, Contributions) | 70% |
| 2 | Delivery of Drinking Water services with self-sufficient O&M cost | 10% |
| 3 | Sanitation Services (regular collection and removal of waste) | 10% |
| 4 | e-Panchayat and other services | 10% |