Decentralisation of Finance A Study of Panchayat Finances in India (Draft Version) Nesar Ahmad Centre for Budget and Governance

Accountability (A Programme of NCAS) New Delhi Acknowledgements This report is a result of a study conducted in two states !erala and "a#asthan$ During the study I got support and encouragement from many people$ All the elected representati%es and the officers and staff in the panchayat offices and state secretariats in &oth the states who took pain of answering my 'uestions and finding rele%ant documents( and the people in the %illages who discussed their %iews with me certainly deser%e my thanks$ I also acknowledge and e)press my gratitude to all the *+,s and people who helped me in data collection and ga%e their suggestions during the fieldwork$ Astha( -daipur and its partners( -nnati and .ine /a&our Protection 0ampaign( 1odhpur( Sahayi( !ollam( Integrated "ural Technology 0entre( Palakkad must &e mentioned$ .r$ +$ Placid( .r$ Thomas Issac (!erala)( Aswani Paliwal( Virendar Singh( .s$ Sampa and "ana ("a#asthan) pro%ided me guidance and support

during the fieldwork$ I am inde&ted to the workers of the a&o%e mentioned organisations( who took me to the fileds( helped me in finding the elected representati%es( translated and e)plained what the people in the %illages were saying and pro%ided their hospitality$ I am also thankful to my team mem&ers for the support they pro%ided me in the office$ Deepak( Su&rat( Si&a( Deepa and .s$ -ma "amesh all were %ery helpful$ Deepa translated the &udget documents of !erala panchayats from .alyalam to 2indi$ .s$ -ma "amesh read the earlier %ersions of the report( ga%e useful suggestions and pointed and corrected the mistakes$ Dr$ Pra%een 1ha( 2onorary 3conomic Ad%isor to 04+A guided and encouraged at e%ery le%el from conceptualising to writing the report of the study$ People at *0AS Pune office ha%e also &een helpful$ I thank all of them sincerely$ *esar Ahmad 0ontents Introduction5555555555555555555 555$$5 6 Panchayat Finance7 A .acro View5555555555555$$ 8 !erala555555555555555555555 5555598

"a#asthan55555555555555555555 5555$ :9 0oncluding "emarks5555555555555555555$$ ;9 Appendices5555555555555555555 55555;6 "eferences5555555555555555555 5555$$9<6 A&&re%iations -sed AFS(s) Annual Financial Statement(s) 0A+ 0omptroller and Auditor +eneral of India 0SS(s) 0entrally Sponsored Scheme(s) DP0(s) District Planning 0ommittee(s) DPIP District Po%erty Initiati%e Programme D"DA District "ural De%elopment Agency 3F0 3le%enth Finance 0ommission .FPs .inor Forest Produces +Ps +rama Panchayats IA= Indira Awas =o#na 1F. 1oint Forest .anagement 1"= 1awahar "o>gar =o#na !SSP !erala Shastriya Sahitya Parishad /AD? /FAD /ocal Area Fund Auditor ./A/ADS .em&er of /egislati%e Assem&ly /ocal Area De%elopment Fund .P/ADS .em&er of Parliament /ocal Area De%elopment Fund P3SA Act Panchayat (3)tension to Scheduled Areas) Act P.+= Pradhanmantri +ramodaya =o#ana

P"I(s) Panchayati "a# Institution(s) PS Panchayat Samiti S0P Special 0omponent Plan SF0(s) State Finance 0ommission(s) S+"= Swarn#ayanti +ram "o>gar =o#na TF0 Tenth Finance 0ommission TSP Tri&al Area Su&@Plan -/4(s) -r&an /ocal 4odies AP Aila Parishad ntroduction The 0onstitution (Se%enty@third Amendment) Act( 988B (Appendi) I)( which was passed &y the parliament in April 988C( gi%es panchayats a constitutional status$ The 0onstitution states that the P"Is ha%e &ecome the institution of Dlocal self go%ernance$E !hat this effectively means is that the P" s are governments at the village# intermediary and district levels# as there are state and central governments at the state and central government levels$ The state go%ernments either amended their respecti%e Panchayat Acts or passed new acts in conformity with the ;Crd amendment of the 0onstitution within a year of the passing the act &y the Parliament$ Direct election of Panchayat representati%es &y the people( ensured representation of women and the weaker sections (dalits( adi%asis( and other

&ackward castes)( de%olution of financial and functional power to the P"Is( and role of decentrali>ed planning are some of the important features of the P"Is after the ;Crd amendment$ The 0onstitution ;:th Amendment Act (Appendi) II) pro%ides similar status to the ur&an local &odies$ During the last ten years after the ;Crd amendment( elections ha%e &een held for Panchayats in almost all the states (1harkhand &eing a nota&le e)ception)$ In many of the states its now second term of the Panchayats after the act was passed$ Salient %eatures of the &'rd Constitutional Amendment F Continuity( 4y pro%iding for duration of 6 years for an elected panchayat and re@election of panchayats &efore e)piry or within si) months of their dissolution as well as non@interference &y 0ourts in electoral matters( continuity of panchayats has &een ensured &y the ;Crd Amendment$ F Gram Sabhas( All States ha%e pro%ided that a Sarpanch?.ukhia?Adhyaksha?Pradhan of the gram panchayat will con%ene a +ram Sa&ha( consisting of persons registered in the electoral rolls relating to a %illage comprised within the area of panchayat at the %illage le%el at least twice a year$ The following matters shall &e placed &efore it &y the gram panchayat7 o Annual Statement of accounts and audit report o "eport on the administration of the pre%ious year

o Proposals for fresh ta)ation or for enhancement of e)isting ta)es o Selection of schemes( &eneficiaries and locations F )hree*tier System( A uniform structure of three tiers at %illage( intermediate and district le%els has &een prescri&ed &ut the constitution and composition of panchayats has &een left to preferences of States su&#ect to all seats &eing filled &y elected persons from the respecti%e territorial constituencies of the panchayats$ F "eservation of Seats( Seats ha%e &een reser%ed for S0?ST in e%ery panchayat on the &asis of proportional representation and such seats may &e allotted &y rotation to different constituencies in a panchayat$ *ot less than one@third of the seats so reser%ed are further reser%ed for women &elonging to S0?ST$ 4esides this( not less than one@third of the total num&er of seats in a panchayat are reser%ed for women and such seats may &e allotted &y rotation to different constituencies in a panchayat$ Similar reser%ations for &ackward classes has &een left to the discretion of States$ F Powers and Authority( It is noteworthy that the ;Crd Amendment pro%ides for States to endow the panchayats with powers and authority Gto ena&le them to function as institutions of self go%ernmentH$ 2owe%er( the functions of panchayats Stated in the same Art B:C+ are in the nature of entrusted de%elopment functions7 D(a) preparation of plans for economic de%elopment and

social #ustice and (&) the implementation of schemes for economic de%elopment and social #ustice as may &e entrusted to them including those in relation to matters listed in the 3le%enth Schedule$HH Functions that &y tradition are uni'uely assigned to panchayats consist of the pro%ision and maintenance of what may &e termed as Gneigh&orhoodH pu&lic goods I of street lighting( sanitation( %illage commons( and water supply as opposed to GnationalH pu&lic goods like #ustice and national defense$ The national le%el is also uni'uely assigned the functions of income redistri&ution and macro@economic sta&ilisation( which in%ol%e cross@regional issues$ There are intermediate functions like education( which cannot &e classified in either local or national slots$ F +lection Commission( +o%ernors of States are empowered &y the ;Crd Amendment to appoint State 3lection 0ommissioners and stipulate &y rules the tenure and conditions of their ser%ice$ F %inance Commission( +o%ernors of States are also empowered to constitute State Finance 0ommissions to re%iew the financial position of the panchayats and to make recommendations to the +o%ernor as to o The principles which should go%ern7 $ the distri&ution &etween the State and the panchayats of the net proceeds of the

ta)es( duties( tolls and fees le%ia&le &y the State( which may &e di%ided &etween them under this part and the allocation &etween the panchayats at all le%els of their respecti%e shares of such proceeds $ the determination of the ta)es( duties( tolls and fees which may &e assigned to( or appropriated &y( the panchayats $ the grants in aid to the panchayats from the 0onsolidated Fund of the State o the measures needed to impro%e the financial position of the panchayats o any other matter referred &y the +o%ernor in the interests of sound finance of the panchayats$ F Audit of Accounts( Audit of panchayats are to &e pro%ided for &y the State /egislatures$ Je may note that only the !arnataka Panchayati "a# Act( 988C has pro%ided for entrusting audit of Taluk Panchayat Funds and Aila Panchayat Funds to the 0omptroller K Auditor +eneral (0A+) while the 0ontroller of State Accounts may authori>e any officer to audit +ram Panchayat accounts$ Source7 -*DP( Decentralisation in India 0hallenges and ,pportunities )/LDLF2VM"IMCDLF!DNDJVM The pro%isions related to the financial powers %ary from one state to the other( as most of the financial powers and functions to &e endowed to the Panchayts were

left to the discretions of the concerned state legislatures$ 2owe%er( it is mandatory for the states to create State Finance 0ommissions (SF0s) to re%iew the financial positions of Panchayats and suggest the financial relations &etween the state and the P"Is$ The first SF0s ha%e gi%en their recommendations in all the states$ The financial autonomy has &een gi%en to the Panchayats( with %arying degrees( in different states$ Though the P"Is own income (income generated through ta) and non@ta) re%enues) is %ery low( the de%olution of finances in some states has &een 'uite high$ For e)ample( in !erala the /eft Democratic Front (/DF) headed go%ernment decided to pro%ide C6 to :<O of the financial resources a%aila&le with all the departments to the -/4s and P"Is$ .adhya Pradesh go%ernment also ordered to the go%ernment departments to hand o%er C<O of their annual &udget to &e spent &y the districts (through the P"Is and -/4s)$ The 3le%enth Finance 0ommission (3F0) has recommended "s$ P(<<< crores to &e pro%ided to the P"Is in form of grants in aid during B<<<@ B<<6$ The 3le%enth Schedule of the 0onstitution has listed the items?su&#ects( which

should &e transferred to the P"Is$ The states ha%e transferred these items?su&#ects in %arying num&ers to the panchayats$ Q2F2LJ-D,/R2+MC,DLL/L1M The P"Is are gi%en an important role to prepare plans at the local le%el$ Article B:C@+ of the 0onstitution defines the powers( authorities and responsi&ilities of the Panchayts$ These are7 (a) the preparation of plans for economic de%elopment and social #ustice$ and( (&) the implementation of schemes for economic de%elopment and social #ustice as may &e entrusted to them including in relation to the matters listed in the 3le%enth Schedule$ The former is original power of the P"Is( of course( su&#ect to the pro%isions in the state panchayat acts( and the later is the delegated function$ Article B:C@AD directs creation of District Planning 0ommittee (DP0) in each district Dto consolidate the plans prepared &y the panchayats and municipalities in the district and to prepare a draft De%elopment Plan for the district as a wholeE$ The draft plan so prepared and recommended &y the DP0 would &e forwarded to the state go%ernment$ 2owe%er( it is not mandatory for the states to integrate the

recommendations of the draft plans in the state plan?&udget$ !erala( a pioneer in decentrali>ed planning has pro%ided for integration of the draft plans prepared &y the DP0s in the state plan$ Around C6 to :<O of the *inth Plan has &een en%isaged to consist of schemes formulated and implemented &y the local &odies( within respecti%e areas of responsi&ilities (0handrashekhar( 98887 P6)$ 2owe%er( there ha%e &een a lot of pro&lems faced &y the P"Is at the le%el of actual implementation$ )he decentrali,ation seems to ta-e .lace when the state governments ta-e interest (/NDP)$ )he devolution of .ower# function and functionaries are totally on state government0s discretion$ )he P" s0 own revenue collection is very low$ During the year 122&*23 the .er ca.ita ta4 collected by the P" s in country was "s 2$'3# on an average# the lowest in Assam ("s$ 1$56) and highest in 7erala ("s$ 8'$85)$ )he share of Panchayats0 own revenue in thier total e4.enditure was as low as '$9': during the same year at all ndia level (+upta( B<<C)$ The states still follow the earlier system of accounting( conducted &y 3)aminer?Director of the /ocal Funds

Accounts Department (/ADs) with only e)ception &eing !arnatka( where the act pro%ides for e)ternal audit certification and transactions audit of Aila Parishad and Taluk Panchayts &y 0A+ of India$ !erala also has a uni'ue pro%ision of 'uarterly performance audit( &esides /AD audit$ The &ureaucracy and administration still work with the old mindset$ "elationship &etween the three le%els of P"Is is not clearly defined etc$ etc$ Jith this &ackground study looks mainly on the three aspects of Panchayat Finances7 9$ The process of decentrali>ed planning adopted in the state( at the different le%els( peopleHs participation in the process and the mechanism adopted to incorporate the recommendations of DP0 in the state &udget?plan B$ The &udget making process at all three le%els of P"Is( their sources of income and e)penditure pattern C$ The accounting pattern adopted &y the P"Is and the system of auditing$ The study looks at the Panchayat finances in the two states of the country$ !erala( which efforts of decentrali>ation ha%e &een widely appreciated and peopleH participation in de%elopment planning has &een gi%en a campaign modeS

and "a#asthan( which was first to introduce the modern system of panchayats in the country( ha%e &een taken for the study$ Two district panchatats from each state ha%e &een taken$ Two intermediary panchayats from each district panchayat and two %illage panchayats from each intermediary panchayat ha%e &een selected$ The selection of panchayats was &ased on the a%aila&ility of the partner organisations in the district$ The details of selected panchayats are gi%en in the chapters III and IV( where the findings of the study from two sates are discussed in detail$ 2ere we present the report of the study$ This report is organised in fi%e chapters$ In the second chapter the macro le%el o%er%iew of the Panchayat finance are presented$ The third and fourth chapters present our findings in the states of !erala and "a#asthan respecti%ely$ The fifth and final chapter presents the o&ser%ations( conclusions and suggestions$ Panchayat %inance( A ;acro <iew India is a federation of states and union territories$ The federal structure of Indian state is %ery clearly outlined in our 0onstitution$ The essence of federal form of go%ernment is that the 0entre and the State +o%ernments should &e

independent of each other in their respecti%e( constitutionally demarcated spheres of action (Pandey( B<<C)$ There is a defined set of matters where state and central go%ernments ha%e their say$ This federalism e)tends to the financial matters as well$ A di%ision of responsi&ilities in respect of ta)ation and pu&lic e)penditure &etween the state and the central go%ernments is pro%ided &y the 0onstitution$ It also pro%ides for the Finance 0ommission( which regulates the de%olution of finance from the centre to the state$ Planning 0ommission is another institution( which ad%ises on the distri&ution of plan fund to the state and the centre$ The ;Crd and ;:th Amendments of the Indian 0onstitution( for the first time( pro%ided for the fiscal de%olution &elow the state le%el( to the rural and ur&an local &odies$ The ;Crd Amendment to the 0onstitution of India( gi%es the Panchayats a constitutional status$ Jith this amendment the P"Is &ecome a third tier of go%ernance in rural areas( with 0entre at the first and the states at the second tiers$ The TI Schedule of the constitution gi%es a list of B8 su&#ects( which may &e transferred to the P"Is$ Articles B:C2 and B:CI of the Indian 0onstitution

pro%ide for financial de%olution to the P"Is$ The 0onstitution also makes it mandatory to set up a State Finance 0ommission (SF0) for all the states to make recommendations for the de%olutions of funds to P"Is for a period of fi%e years$ The state go%ernments ha%e since amended their e)isting panchayat acts in conformity with the ;Crd Amendment Act$ The Tenth Finance 0ommission (TF0)( though did not ha%e any mandate( in its terms of reference to recommend the financial pro%isions for the local &odies( made recommendations for de%olution of funds to P"Is and -r&an /ocal 4odies (-/4s)$ 3le%enth Finance 0ommission (3F0) was mandated to make recommendations for the P"Is and -/4s$ Je now discuss the pro%isions of the 0onstitution( %arious acts( and role of statutory &odies like *ational and State financial commissions that ha%e aided the process of fiscal decentralisation in the India$ The Financial pro%isions for the P"Is are discussed &elow7 K"LI"-P/JNMUFJVMSDVV2+M3NMJ!2MVJDJ2V M All the states were re'uired to legislate conformity acts (gi%ing the P"Is the powers and functions in accordance with the ;Crd Amendment Act) within a year

of the ;Crd 0onstitutional Amendment Act &eing passed$ Since the powers and functions of the local &odies are endowed &y the respecti%e state go%ernments through the conformity acts and other measures9( %ariations occur across the 9 +o%ernment orders( amendment in other state legislations etc$ states in this regard$ "a#araman et al (B<<<) presented a comprehensi%e study of the pro%isions related to the panchayat finances in the conformity acts passed &y the states$ The conformity acts ha%e made pro%isions of sharing property ta)es( stamp duties etc$ or ha%e gi%en the P"Is powers to collect these ta)es$ Some empowered the P"Is to collect professional and entertainment ta)es( collect user charges and fees for certain ser%ices offered$ Surcharge and le%y on certain ta)es ha%e also &een allowed &y some of the states$ Though the pro%isions are not uniform across the states$ The su&#ects mentioned in the TI schedule of the 0onstitution are also transferred to the P"Is &y these acts and there also %ariations e)ist across the states in the num&er and degree (in terms of funds( functions and functionaries) of the su&#ects transferred (see Appendi) III)$

Some states ha%e amended their conformity acts further e$g$ !erala &ased on the recommendations of the Decentralisation 0ommission set@up &y the state go%ernment in 988V$ Some state go%ernments ha%e also issued go%ernment orders and ha%e made pro%isions( which promote the process of decentrali>ation or in some cases the re%ersed the process$ ;2LJ!M)/LDLF2MK"PP/VV/"LMM;)KMM Tenth Finance 0ommission though not formally mandated to do so( recommended a grant of "s$ 9<< per capita according to the rural population as per the 98;9 0ensus$ The total amount recommended &y the TF0 was "s$ C:P9 crore for a period of four years (988V@B<<<) to &e transferred to states for the purpose of de%olution to the panchayts$ The grant was e)plicitly not intended to co%er salary and wages$ The reason for taking the 98;9 0ensus and not the 9889 was to a%oid any disad%antage to those states( which performed well in controlling population$ VJDJ2M)/LDLF2MK"PP/VV/"LVMMV)KVM M In most of the states first SF0s ha%e gi%en their reports and second SF0s ha%e &een set@up$ In some sates the second SF0s ha%e also su&mitted their reports$

According to the information gi%en on the .nistry of "ural De%elopment we&site (www$rural$nic$in)( a&out the status of the first set of SF0s( as on Decem&er B<<C( out of C6 states (including three newly created states of 1harkhand( -ttaranchal and 0hattisgarh) and -nion Territories (-Ts)( B8B had set up SF0s and B; of those ga%e their reports (Appendi) IV)$ In 4ihar first SF0 was set up which failed to gi%e any report and now second SF0 is to gi%e its report$ In Arunachal Pradesh SF0 has &een set up recently and is yet to gi%e its report$ In B; states where first set of SF0s ha%e gi%en their report$ Following is a summery of status of the recommendations$ B Three states (.eghalaya( .i>oram( and *agaland) were e)empted from the am&it of the ;Crd 0onstitutional Amendment$ o B< states accepted their recommendations$ o B states (Assam and +oa) partially accepted$ o .anipur accepted with some conditions and Delhi with some modifications( o In -ttaranchal and Pondicherry the recommendations of SF0s are still under considerations$ o Among the two other newly created states( 0hattisgarh has accepted the

recommendations of .P SF0 and 1harkhand is yet to constitute its first SF0$ The delay is due to some litigation in the 2igh 0ourt$ .a#or recommendations of the SF0s are discussed &elowC (see also Appendi) V)$ WMSharing the State revenue .ost of the SF0s recommended that state go%ernment share their re%enue collections with the local &odies$ Assam SF0 recommended BO of the state ta)es and transfer of 9<O of motor %ehicle ta) to local &odiesS Tripura SF0 recommended de%olution of 9<O of state share of central ta) to Aila Panchayat (AP)( PO to Panchayat Samiti (PS) and BO to +ram Panchayats (+Ps)( 6<O of the re%enue earned from sales ta)( additional ta)( purchase ta)( and lu)ury ta) to panchayats and CBO of collection of agri@income ta) to intermediate tier (BO to each)S !arnataka SF0 recommended CVO of non@loan gross re%enue receipts to &e shared with local &odies (P6O to P"Is and 96O to -/4s)S Pan#a& SF0 recommended B<O net proceed of stamp duty( motor %ehicle ta)( electricity duty( and entertainment ta)S "a#asthan SF0 recommended B$9PO of the net proceed of the ta)es raised &y the stateS -P SF0 suggested CO of re%enue receipts of

state go%ernmentS Jest 4engal SF0 recommended 9VO of net process of all the ta)es collected &y the stateS T* SF0 recommended PO of total states re%enue collection during 988;@8P and 9BO during B<<9@<BS .P SF0 recommended :$B:O of state re%enue to P"IsS 2aryana SF0 recommended sharing of land con%ersion charges( stamp duty and royalty on minor minerals with P"Is$ WMAssigning new )a4es The SF0s generally did not recommend new ta)es to &e assigned to the panchayats$ SF0s recommended house ta) where it was not already le%ied( le%ies on use of pumps or tractors( highways ser%ices( telephones or ca&le TV( and surcharge on land re%enue or on sale of lands$ The reason for not recommending e)pansion of ta) powers of the panchayts seems to &e a wide spread perception that panchayts are not a&le to collect ta)es ("a#araman( B<<B)$ C These are &ased on "a#araman (B<<<)( ,ommen (988P) and 0handreshekhar (ed$) (9888) WMGrants .any of the SF0s recommended an increase in the grants gi%en to the P"Is$ AP

SF0 recommended increasing the per capita grant for +ram Panchayats (+Ps) from "s$ 9 to "s$ 6( for .iddle Panchayat from "s$ 6 to "s$ P( and for APs "s$ B or "s$ :S .P SF0 recommended grants to +Ps for discharging &asic functions( &esides a lump@sum non@recurring grantsS "a#asthan SF0 recommended 6<O matching grant and grant@in@aid to panchayats to &e raised "s$ 6 to "s$ 99 per capita$ (,2=2LJ!M)/LDLF2MK"PP/VV/"LMM()KM M 3F0 was first union finance commission mandated to recommend measures to augment the finances of state go%ernments so as Dto supplement the resources of panchayats and municipalities on the &asis of recommendations of the State Finance 0ommissions$E The 3F0 was constituted &y the President of India on 1uly C( 988P$ The commission ga%e a num&er of recommendations pertaining to panchayats (3F0 "eport( 0hapter VIII)$ Appendi) VI gi%es a summary of the recommendations made &y the 3F0$ Some ma#or recommendations are7 Grant( o "s$ 9V<< crore annually for the period of fi%e years (B<<9@B<<V) Amendments suggested(

o Amending Article B:CI to synchronise the a%aila&ility of SF0 reports to the Finance 0ommission o Deletion of words Don the &asis of recommendations made &y the Finance 0ommission of the stateE from su& clauses (&&) of the Article BP<(C) of the 0onstitution (Article BP< pro%ides for the &asis of the functioning of the Finance 0ommission) to gi%e the Finance commission freedom to recommend for those states where SF0s ha%e not &een constituted or ha%e not gi%en their reports$ o Transfer of functions and powers in accordance with B:C + read with 99th Schedule of the 0onstitution specifically mentioned in the state pancahayat acts as well as clear@cut demarcation of the functions of all the tiers of panchayats$ o Suita&le legislations in order to impro%e user charges for go%ernment properties of the central as well as state go%ernments Accounts and Audit( o "e%iewing the e)isting accounting heads( etc$( prefera&ly in consultation with 0KA+ for ensuring uniformity among the states$ Vesting control and super%ision o%er the maintenance of accounts in 0KA+$

o 3armarking an amount of half percent of total e)penditure &y the panchayats for 0KA+ for audit purpose( and earmarking of "s$ :<<< per panchayat per annum on an a%erage to meet the e)penditure on maintenance of accounts on contract &asis$ Thus the 0ommission ga%e a num&er of recommendations ranging from de%olution of financial resources to amending 0onstitution in order to make panchayats %ia&le and pulsating institutions of local go%ernance$ The 0ommissionHs recommendation to gi%e grant to the panchayats to the tune of "s P(<<< crore for B(:<(6PP gram panchayats( 6(8C< intermediate panchayats and 699 >illa panchayats in B6 states of the country during B<<<@<6 would gi%e immediate relief to the panchayats at least to maintain ci%ic ser%ices$ ,f the total grants for local &odies( the Commission has earmar-ed "s 9== crore for develo.ment of data base on the finances of the .anchayats and munici.alities and "s 23$61 crore for maintenance of accounts of the .anchayats$ The de%olution of 9(V<< crore annually to the panchayats for a period of fi%e

years (B<<<@<6) for the maintenance of the core ser%ices: is the cornerstone of the entire de%olution scheme of the 3F0$ Distri&ution of this grant is to &e &ased on the fi%e criteria suggested$ The recommendations made &y 3F0 are fa%ora&le for the decentrali>ation process in the country$ Though there has &een criticism on some recommendations$ ,ne( for the money recommended &y the commission as grant to the P"Is is considered inade'uate$ According to a study conduced &y *ational Institute of "ural De%elopment (*I"D) for the 3F0( the estimated financial re>uirement of the .anchayats is in tune of "s$ 1#89#193 crore for a .eriod of five years for the core services identified by the commission$ Com.ared to this the grant of "s$ 16=== crores recommended seems to be a dro. in ocean# which is merely 5$6': of the estimated re>uirement$ The second point is a&out the criteria suggested for distri&ution of grants &etween the states$ ,ne of the fi%e criteria is inde) of decentrali>ation with B<O weight( which is &ased on 9< parameters7 (i) enactment of state panchayat legislation in conformity with the ;Crd 0onstitution Amendment ActS

(ii) inter%ention?restriction in the functioning of the panchayatsS (iii) assignment of functions to the panchayats in the state panchayat legislation %is@a@%is the 99th ScheduleS (i%) transfer of functions to the panchayats &y way of rules?notifications?orders of the state go%ernmentsS (%) assignment of ta)ation powers to the %illage panchayats as per state panchayat actsS (%i) le%y of ta)es &y the %illage panchayatsS (%ii) constitution of the SF0s and su&mission of action taken reportsS (%iii) action taken on the ma#or recommendation of the SF0S (i)) elections to the panchayatsS and ()) constitution of district planning committees$ : These core ser%ices are pro%ision of primary education( primary health care( rural or municipal roads( safe drinking water supply and street lighting$ These parameters do not include transferring of personnel under the control of panchayats( which should &e taken as an important indicator as it facilitates the functioning of the P"Is$ The enactment of conformity acts is now irrele%ant as the enactment process is o%er way &ack in 988:$ Surprisingly the decentralisation inde) does not include the implementation of pro%isions of Panchayat (3)tension in Scheduled Areas) Act( 988V( which relates to the panchayats of V scheduled

areas of the country$ (.ahi Pal( B<<<) The decentralisation inde) to rank the states according to their decentralisation efforts also raises 'uestions$ There are states like !erala( which went much ahead in terms of transferring funds( functions and functionaries to local &odies almost with a &ig &ang approach$ The state has made far reaching institutional and legal changes to facilitate( functional( financial and administrati%e autonomy to the P"Is and also to the ur&an local &odies$ The go%ernment amended as many :: state legislations( to &roaden the entitlements of local &odies( institutions like ,m&udsman (with a 2igh 0ourt 1udge as 0hairman)( the Appellate Tri&unals( and the Audit 0ommission etc$ The go%ernment launched a PeopleHs Planning 0ampaign to pro%ide the re'uired assistance to the P"Is in preparing the de%elopment plans as re'uired &y the constitutions$ The District Planning 0ommittees (DP0s) were gi%en their rightful constitutional roles$ ,&%iously these factors have been overloo-ed by the +%C in constructing decentralisation inde4# otherwise 7erala would have not figured on the 1=th .lace in the +%C decentralisation inde4$ ?n the contrary Bihar# where

elections for P" s held @ust recently and still the S%C re.ort has not been submitted has been assigned si4th .lace in the S%C decentralisation inde4$ )/LDLF/D,MUTJ"L"PNM"IMCDLF!DNDJV M The a&o%e discussion points out that many financial powers ha%e &een de%ol%ed to the P"Is and they are &ecoming autonomous to some e)tent$ 2owe%er( the trend is not similar in all the states$ The decentralisation process in the states is highly dependent on the go%ernment in power$ The degree of financial autonomy of the panchayats also %aries from one state to another$ 2owe%er the o%erall financial autonomy is also not e%ery high$ It has &een suggested that the financial autonomy gi%en to the panchayats( could &e measured in term of ratio of panchayatsH own income to their total income (,ommen( B<<<)$ .easuring in this term the financial autonomy of the panchayats is 'uite low$ As shown in the ta&le &ellow it was merely 6$VO during 9889@8B( which further declined in the following years$ )able '$1 Share of own revenue to total income of Panchayats (All India( all three tiers) =ear

O of own re%enue to total income 9889@8B 6$V 988B@8C :$;C 988C@8: C$88 988:@86 :$<B 9886@8V C$88 988V@8; C$;C 988;@8P C$6 Source7 0alculated from the data gi%en in the 3F0 "eport The decline may &e attri&uted to the increasing grants to the panchayat &odies &y the state go%ernments$ The local &odies are entitled for the grants &y the higher le%el of go%ernments$ 2owe%er( much of the grants are gi%en in tied forms$ An alternative measure of autonomy has been suggested as the ratio of tied fund to the untied fund (<yasulu# 9===)$ Considering the fact that the grants given to the P" s are their constitutional right# this measure seems to be more a..ro.riate# as this tells how autonomous the P" s are in s.ending their rightful funds$ 2owe%er( the e)pansion of fiscal domain of the panchayats is still a %alid demand$ "a#araman (B<<<) in her paper suggests that the fiscal domain of the panchayats should &e e)panded and new ta)es should &e assigned to

panchayats$ ,ne untapped arena is agriculture income$ States do ta) the land holdings (called the land re%enue) and income form agriculture in case of plantation is le%ied in si) states$ "a#araman does list the .roblems of ta4ing agriculture income (li-e accounting agriculture income is difficult# declarations made are not easy to monitor or verify as transactions are not formal etc$) but suggests that a cro. wise decentralised revenue collection is .ossible$ And Athus there is a clear o..ortunity here for revenue additionality# with the further advantage that it can effectively be ta..ed at .anchayat# and only at .anchayat level$B 2owe%er( considering the fact that most of the Indian farmers are small and marginali>ed farmers and agriculture for them is still for their own consumption and not for commercial purposes( this suggestion does not appear appropriate$ "a@asthan first S%C0s suggestion of levying surcharge by District Panchayat on sale of agricultural .roduce in regulated mar-et might be a better mechanism$ Though most of the small farmers may ha%e to sell their produces &ecause of economic compulsions (and purchase again in the later

part of the year for consumption)( &ut their access to regulated market is limited$ ,ne area of e)panding the income &ase of panchayats is their control o%er the local natural resources( particularly in tri&al and forest areas$ The P3SA Act passed &y the Parliament in 988V &ecomes %ery important in this conte)t$ UFF"TLJ/L1MDL+MUT+/J/L1M Another important issue is a&out the accounts and audit at the panchayat le%el$ Presently centre and state go%ernments follow a system of account appro%ed &y the 0omptroller and Auditor +eneral (0KA+) of India$ )his is a system that arranges all items under clear heads with unambiguous codes and is uniform across the country$ But this system has been defined for union and states government only$ )here is a lot of diversity in the forms in which .anchayat accounts are -e.t across the states$ ?ften it is not a system of double entry boo- -ee.ing$ (Vyasalu( B<<<)$ The 3F0 has gi%en many suggestions in this regard$ The go%ernment of India has accepted these recommendations in principle$ The details will &e worked out &y the 0KA+$ Though e%ery&ody accepts the need of a fool proof and uniform system of

maintenance of accounts and their audits( eye&rows ha%e &een raised for suggesting that this should &e done under the super%ision and control of the 0KA+( as it will ha%e a centralised control o%er the whole process (.ahi Pal( B<<<)$ Though it is necessary to ensure consents of the states and P"Is( the in%ol%ement of the 0KA+ can ensure uniformity of accounting pattern across the states$ .eanwhile( some of the states ha%e introduced additional documents in their &udget( which pro%ide information on the grants pro%ided to the P"Is$ For e)ample( Appendi) IV to the !erala &udget (+o!( B<<C) and three parts document on Gfinancial assistance to the P"IsH (+o.P( B<<C) in .adhaya Pradesh &udget gi%e the details of the fund to &e de%ol%ed to the P"Is$ The Appendi) IV to the !erala &udget gi%es details of de%olution &oth .a#or 2ead wise as well the fund e)pected to &e recei%ed &y each P"I$ The information in .P documents is gi%en as .a#or 2ead wise and district wise$ The Document *o$ BB of the .P &udget gi%es detailed &udget of Panchayati "a# and "ural De%elopment Department and details of financial assistance recei%ed for the

rural de%elopment programmes$ Q2F2LJ-D,/V2+MC,DLL/L1MMC,DLL/L1MI-"PM O2,"A M The ;Crd constitutional amendment act gi%es this responsi&ility to the panchayats (at all three le%els) to prepare the Dplan for economic de%elopment and social #usticeE (Article B:C+)$ Article B:CAD of the ;:th Amendment pro%ides for constitution of a District Planning 0ommittee which will consolidate the plan prepared &y the panchayats and municipalities and draft a De%elopment Plan for the district as a whole$ Though many state go%ernments ha%e constituted the DP0s (Appendi) VII)( &arring a few states this important constitutional function is not &eing discharged$ 4andypadhyay (B<<<) points out two contradictions in the constitutional pro%isions related to the planning &y the panchayat &odies$ The plans prepared &y the panchayats under article B:C+ should &e considered as final &ut when they get consolidated as a district plan this &ecome a GdraftH$ Another contradiction is the GdraftH De%elopment Plans prepared &y the DP0s are sent to the state go%ernments$ 4ut the state go%ernments are not &ound to integrate

those draft plans into the state plan?&udget$ Theoretically the state plans could &e prepared independently totally ignoring the district draft plans$ In that case it would &e an ungainly caricature of planning from &elow (4andypadhyay( B<<<)$ It has &een suggested that Planning 0ommission can resol%e these contradictions &y pro%iding a Dclear policy and operati%e on this issueE (4andypadhyay B<<<)$ As for the integration of district plans in the state plans the First Fi%e =ear Plan itself has suggested that the Dprogrammes undertaken &y local &odies should &e carefully integrated with the state programmes$E (Luoted in 4andypadhyay B<<<) 2owe%er( the *inth F=P( which was prepared after the ;Crd and ;:th Amendment( is silent on this issue$ "elated to the decentralised planning( there is also the issue of the su&#ects transferred &y the states to the panchayats$ The transfer of the su&#ects listed in the TI Schedule of the 0onstitution is a state prerogati%e$ And all the states ha%e not &een %ery generous in endowing these responsi&ilities to the panchayats$ In many cases the su&#ects are transferred to the local &odies &ut related funds and personnel are still in the control of the line departments$ This poses a pro&lem for

panchayats for preparing the plans( as they are not aware of the funds and functionaries a%aila&le$ Awareness of responsi&ilities and a%aila&le resources (&oth financial and personnel) is necessary to prepare any meaningful plan$ In fact( this am&iguity has &een considered as a pro&lem in regard of assigning ta) powers to the panchayts as well$ It has &een suggested that there should a separate local list in the 0onstitution( as there are centre( state and concurrent lists one entirely for the centre( second entirely for the state( and third for state and centre concurrent (.ahi Pal( B<<<)$ The a&o%e discussion points to an important fact a&out the decentralisation process( in the country$ All the .rovisions related to the finances of .anchayats as well as the sub@ects to be transferred to the P" s are left to the will and whim of the state governments and in most of the cases the state governments have not been very generous$ The 0onstitutional Amendment passed &y the parliament gi%es the states an upper hand as far as decentralisation process is concerned$ The political economy of the supremacy of the state go%ernment in this regard is 'uite simple$ The states ha%e their due

space in the federal system during the last B< years$ Jith rise of regional political parties and the coalition go%ernments at the centre &ecoming an order of the day( the &alance of power in the Indian federal system has apparently shifted in fa%our of states( which was not so during the first three decades after the independence$ 2owe%er( the empowerment of the states seems to ha%e gone against the decentralisation process( initiated a decade ago$ The states are not ready to share their new found spaces in the federal structure( with their immediate lower le%el of go%ernance( the P"Is and -/4s$ 2owe%er( there are e)cellent e)ceptions of this trend( like !erala or Jest 4engal and others( where the state go%ernments ha%e taken far@reaching steps to empower the local &odies$ 7erala !erala has taken far@reaching initiati%es in the direction of democratic decentralisation$ The state go%ernment passed the conformity act in 988: and the PeopleHs Planning 0ampaign was launched in 988V$ The go%ernment decided to share a&out C6O of the total Plan resources with the local &odies$

Again the !erala Panchayat "a# Act and the !erala .unicipality Act were amended in 9888( according to the recommendations made &y the 0ommittee on Decentralisation appointed &y the !erala go%ernment and as much as C6 state Acts( ha%ing rele%ance to local go%ernment functioning( were amended the ne)t year$ The milestones in !eralaHs decentralisation initiati%es are indicated &elow7 April?.ay 988: 3nactment of !erala Panchayat "a# Act and the !erala .unicipality Act ,cto&er 9886 Transfer of powers and functions to local go%ernmentsS along with institutions( offices and functionaries Fe&ruary 988V Introduction of a Special 4udget Document for local go%ernment allocations$ August 988V /aunching of PeopleHs Plan 0ampaign for decentrali>ed planning and announcement of earmarking of a&out C6O plan resources to local go%ernments$ .arch 9888 "estructuring of the !erala Panchayat "a# Act and the !erala .unicipality Act$ .arch B<<< Amendments to C6 Acts ha%ing rele%ance to local go%ernment functioning$

1uly B<<< Transfer of district le%el offices and staff to District Panchayat$ 1anuary B<<B Decision to redeploy surplus staff especially engineers to local go%ernments$ 1anuary B<<B Decision to fi) share of untied plan grants as one@third of the total plan si>e of the State$ B<<C "edeployment of Surplus clerical staff to local go%ernments completed$ "edeployment of engineering staff is underway$ Source7 +o!( B<<C Prior to 988: Act( !erala had only %illage le%el panchayats$ The district panchayats and &lock panchayats were created with enactment of the new act$ After the enactment of the new act( the elected &odies assumed office on Septem&er C<( 9886$ The powers and functions were transferred to the P"Is in ,cto&er 9886$ The state go%ernment constituted its first State Finance 0ommission (SF0) in 988:( which ga%e its report in Fe&ruary 988V$ The second SF0( constituted in .ay 9888 also su&mitted its report in 1anuary B<<9$ Bo4*1 Sources of ncome for Cocal Bodies in 7erala A$ )raditional Sources of ncome 9$ Ta) "e%enue

a$ ,wn Ta)es i) Property Ta) ii) Profession Ta) iii) 3ntertainment Ta) i%) Ad%ertisement Ta) %) Ser%ice Ta) %i) Show Ta) including surcharge %ii) 0ess on con%ersion of land use %iii) Ta) on Animals( %essels and %ehicles i)) Ta) on Tim&er )) Surcharge &$ Assigned Ta)es i) 4asic Ta) ii) Surcharge on Stamp Duty c$ Shared Ta)es i) .otor Vehicle Ta) B$ *on Ta) "e%enue a$ /icense Fee &$ +ate Fees c$ Income from Property "ent d$ Income from Property other than rent e$ Permit Fees f$ "egistration fees g$ Ser%ice?-ser 0harges h$ Income from Ferries i$ Fines and Penalties #$ Sundry Items C$ +rant@in@Aid from +o%ernment *on Plan +rant in Aid (for P"Is) i) "ural Pool ii) /e%el 0rossing +rant in Aid (only to fi%e Panchayats)

:$ /oans Village Panchayats can take loans from 0ooperati%e &anks( 2-D0, and 0ooperati%e 4anks etc$ The VPs ha%e taken loans from !erala State "ural De%elopment 4oard ("D4) also$ B$ Government Grants*in*Aid for )ransferred "es.onsibilities 9$ +eneral Plan +rant@in@Aid for local de%elopment pro#ects B$ Specific Purpose +rant in Aid for transferred responsi&ilities Plan and non Plan i) +rant in Aid for state and centrally sponsored plan scheme ii) +rant in Aid for specific programme under non@plan iii) *on plan +rant in Aid for running?maintaining the office?institutions transferred to local go%ernments i%) *on plan esta&lishment grants for 4lock and District Panchayats Source( +o%t$ of !erala( B<<C The !erala go%ernment has transferred all the B8 functions listed in the TI Schedule of the 0onstitution to the P"Is (Appendi) III)$ The care has &een taken to assign the functions to all three le%els in such manner to a%oid o%erlapping (Appendi) VIII)$ D-nlike many other states( !erala has attempted to define the functional areas of the different tiers of P"Is as precisely as possi&le$E (+o!(

B<<C) The P"Is in !erala en#oy fiscal autonomy to a great e)tent$ The P"Is ha%e &een gi%en powers to le%y ta)es (%illage panchayats)( ha%ing share in state ta)( and a&o%e all get a considera&le share in the state plan resources (4o)@9) in untied form$ The information on grant allocation to the P"Is is contained in the Appendi) IV (+o!( B<<Ca) to the state &udget$ Since this document is part of the state &udget it is appro%ed and passed &y the !erala /egislati%e Assem&ly$ The following ta&le gi%es estimate of the plan and non plan fund to &e allocated to the P"Is during B<<C@<:$ )able D 8$1 )otal Assistance to Panchayat "a@# 9=='*=8# "s$ la-hs P"Is Plan *on Plan Total +ram Panchayat ;6P8<$<6 BB<:C$<9 8;8CC$<V 4lock Panchayat B99:8$89 96;:$CC BB;B:$B: Aila Panchayat 98B8<$C: 6V6:$B9 B:8::$66 Source7 +o!( B<<Ca It is also pro%ided &y the !erala Panchayat "a# Act that the chief secretary of state should present an Annual Financial Statement on the grants due and dis&ursed to the panchayats e%ery year to the +o%ernor of the state$ The same should also &e ta&led in the state /egislati%e Assem&ly$ The distri&ution of the

go%ernment grants to the P"Is and ur&an local &odies is done according to a formula &ased on certain indicators and weightage (Ta&le :$B)$ The distri&ution of Special 0omponent Plan (S0P) and Tri&al Su& Plan (TSP) funds is &ased on schedule caste and schedule tri&e population respecti%ely in the P"I (or ur&an local &ody) area$ )able D 8$9 !eightage for evolving %ormula to distribute General sector and +%C grants Jeightage (percentage) Indicators +ram Panchayat 4lock Panchayat District Panchayat .unicipalities? 0orporations 9$ Population (e)cluding S0?ST) V< V< 6< ;< B$ Tri&al Population 6 6 6 6 C$ +eographical area e)cluding under 6 9< 96 6 forest :$ Area under paddy 6 @@ @@ @@ 6$ ,wn income of +rama Panchayat 9< @@ @@ @@ V$ 0omposite Inde) of Agricultural /a&ourers( Persons engagd in /i%estock( Fisheries etc$ and .arginal Jorkers

96 B6 B< @@ ;$ 0omposite inde) of &ackwardness? houses without latrine and houses without electricity @@ @@ 9< B< Total 9<< 9<< 9<< 9<< OT+12JMULD,NV/VMDJMCDLF!DNDJM?2=2, M Je ha%e seen the financial pro%isions for the panchayats in the state in the pre%ious section$ For the purpose of the &udget Analysis of the P"Is( we collected &udget documents?annual financial statements of the selected P"Is in the state$ 4udget Analysis of the selected P"Is is presented in this section$ ;ethodology Two District Panchayats (DPs)( !ollam and Palakkad( were selected for the data collection in !erala$ The district panchayats were selected considering the presence of the partner organisations in the districts$ Sahayi in !ollam and Integrated "ural Technology 0entre (I"T0) helped us in identifying the panchayts and collection of data$ Two 4lock Panchayats (4Ps) in each district and two +ram Panchayats (+Ps) in each 4P were selected$ The following ta&le gi%es a list of the selected panchayat &odies$ )able D 8$' )he P" s selected for the study

District Panchayat 4lock Panchayat +ram Panchayat ,achira ,achira 0lappana .ayyanad !ollam .ukhathala Thrikko%ali%attam .alampu>ha .alampu>ha Akthethara *agalassery Palakkad Thrithala Thrithala F Data Collection 4oth 'uantitati%e and 'ualitati%e data ha%e &een collected$ 3fforts were made to o&tain the &udget documents of last three years from all three le%els of selected P"Is$ The heads of the P"Is and the go%ernment official assisting them were inter%iewed using a structured 'uestionnaire$ To get the peopleHs %iew focus group discussions (F+Ds) were conducted$ F Budget Documents The first learning while em&arking on &udget analysis at panchayat le%el is that the panchayat &udgets are not like the state and centre le%els$ In case of !erala(

the panchayat &odies are re'uired to prepare an annual &udget of the income and e)penditure according to the !erala Panchayat "a# Act 988:$ The act( as modified in 9888( directs the Standing 0ommittee6 of Finance of the panchayat &ody to prepare a &udget showing the income and e)penditure of the panchayat( after considering the proposals su&mitted &y the other Standing 0ommittees( and present it in a special meeting of the panchayat not later than the first week of .arch$ Though the &udgets are prepared in most cases( they are not easily a%aila&le$ The annual financial statement (AFS) for the last year (B<<B@<C) was not prepared &y the most of the panchayat &odies$ Since there is no standard format for the preparation of &udget( there e)ists an une%enness and lack of uniformity in the presentation and structure of the &udget documents a%aila&le$ There is a format a%aila&le for the annual financial statement of the panchayatHs income and e)penditure and panchayats following these formats presented organised &udget as compared to those who did not$ 2owe%er( the pro&lems with the a%aila&le &udget documents were of many kinds$ *ot only the same formats were not used( it seems( that same terminology were

also not used &y the panchayat &odies for one kind of e)penditure$ For instance( it seems that the terms D!erala De%elopment SchemeE( D!erala .odel De%elopmentE( DDecentralised PlanningE( and DDecentralised ? Decentralisation SchemesE were used for the same item$ In the !ollam District Panchayat 4udget document the entire e)penditure on D!erala De%elopment SchemeE is shown as plan income and under plan e)penditure (which seems to &e correct approach) during B<<B@<C &ut as plan income and non@plan e)penditure during B<<C@<:$ ULD,NV/VM"IM(LF"P2MDL+M(XS2L+/JT-2M"IMV2 ,2FJ2+MC6(V M F Grama Panchayats The &udget documents of two +Ps Thrikko%il%attam (!ollam DP) and *aggalassery (Palakkad DP) and AFS of ,achira +P (!ollam DP) are a%aila&le$ 2ere we analyse the income and e)penditure patterns of the three +Ps$ 6 The act pro%ides for three Standing 0ommittees at +rama Panchayat and 4lock Panchayat le%els (Finance( De%elopment and Jelfare)( and fi%e Standing 0ommittees at District Panchayat le%el (Finance( De%elopment( Pu&lic Jorks( 2ealth and 3ducation( and Jelfare)( consisting of the elected mem&ers of the panchayat$ The mem&ers of the each Standing 0ommittee( e)cept

for the Standing 0ommittee on Finance( elect their chairman$ The %ice president of the panchayat is an e)@officio mem&er and chairman of the Standing 0ommittee on finance$ XSection 9VB of the !erala Panchayat "a# ActR WM ncome Sources In !erala only +ram Panchayats (+Ps) ha%e the rights to collect ta)es and not the 4lock and District Panchayats$ In the following ta&le presents the income pattern of three +Ps7 )able D 8$8 ncome of GPs from various sources ( in "s$ 1===) ,chira +P Thrikko%il%attam *aggalassery B<<B@<C Percent to total B<<9@<B 43 Percent to total B<<B@<C 43 Percent to total B<<<@<9 Percent to total B<<C@<: Perce to tota 9 Panchayat Ta)es and

"ate B99V$; 6B$: CC:9$C 9B$C 9886$B 8$C 969<$V :V$; BV;6 9B B "ealisation under sp Acts 66$C 9$: 98;$< <$; :B$< <$B 9BP$8 :$< V88 C C "e%enue deri%ed from Panchayat Property 9;V$V :$: 9666$< 6$; 9B<6$< 6$V :B9$C 9C$< VP< C : Panchayat Fees V9:$6 96$B C;9$6 9$: 8V$P <$: 6<$< 9$6 9V: < 6 +o%t grants and contri&ution ;:B$9 9P$: 966V$< 6$; 99;B$< 6$: B<$B <$V C6<< 9V V +rants for the Inst$ Transferred to +Ps <$< <$< ;C;8$8 B;$B :9<;$; 98$< <$< <$< 9BBVV$V 68 ; 0apital Account <$< <$< 9B6<<$< :V$9 9B6<<$< 6P$< :<<$< 9B$: C;6 9 P .iscl$ "e%enue 9C8$: C$6 V9$< <$B CCB$: 9$6 :P$P 9$6 < < 8 De&t Account 98:$8 :$P 9V<$< <$V 99V$: <$6 V6C$9 B<$B :B< B 9< Total :<C8$: 9<<$< B;9B9$; 9<<$< B96V;$: 9<<$< CBCB$P 9<<$< B<;;8$V 9<< The first four items are .anchayats0 own income$ As we can see in the ta&le the ratio of own income as well as the total own income %aries a lot$ The percentage share of total own income in the total income of ,achira panchayat (B<<B@<C) is ;C$:OS B<$9O (B<<9@<B) and 96$CO (B<<B@<C) in Thrikko%il%attamS

and V6$9O (B<<<@<9) and B<$:O (B<<C@<:) in *aggalassery$ The ma#or share of panchayatsH own income comes from the ta)es collected &y the panchayats$ In two cases( where we ha%e data for two different years we see that the share of the total own income as well as ta)es collected &y the panchayats ha%e declined$ The decline is 'uite sharp in case of *agalassery panchayat$ 2owe%er( in a&solute terms it declined only in case of Thrikko%il%attam$ The share of government grants is shown as item num&ers 6( V and ; in the a&o%e ta&le$ Je can see that the share of grants ha%e increased for &oth the panchayats for which we ha%e data for two different years$ In case of Thrikko%il%attam it increased from ;8O in B<<9@<B to PB$:O in B<<B@<C and for *aggalasery it increased from 9:$6O in B<<<@<9 to ;;$VO in B<<C@<:$ For ,achira +P it was 9P$:O during the year B<<B@<C$ There are different types of grants a%aila&le for the panchayats from the state go%ernment (4o) :$9)$ 4 0apital account (item ;) in the a&o%e ta&le includes the untied plan fund &eing pro%ided &y the !erala go%ernment to the P"Is as well as the grant for 0entrally Sponsored Schemes (0SSs) and specific purpose grant pro%ided &y the state

go%ernment$ Je see that Thrikko%il%attam has e)pected to recei%e "s$ 9B6<< thousand during &oth the years for which data a%aila&le( under this$ In case of *aggalessary this has declined( though the other two grants increased$ It was a general complaint that there was cut in plan fund de%ol%ed to panchayats$ The state go%ernment of !erala admits that the grants earmarked for the local &odies ha%e &een curtailed due the fiscal crisis in the state$V It is surprising that ,achira did not recei%e any grant under the item G0apital AccountH$ .ay &e all the grants are shown in go%ernment grants and contri&utions (item no$ 6 in the ta&le)$ As we see &elow( ,chira panchayat has not shown any e)penditure also under the items indicating decentralised planning$ Total income of the Thrikko%ilo%attam declined from "s$ B;9B9$;thousand in the year B<<9@<B to "s$ B96V;$:thousand in B<<B@<C( a B<O decline to from the pre%ious year$ The decline is mainly attri&uted to decline in panchayatHs own ta) collection$ There is also marginal decline in go%ernment grants to the +P$ In case of *aggalessary it increased dramatically from "s$ CBCB$P thousand in B<<9@<B

to "s$ B<;;8$V thousand in B<<B@<C( a more than si) fold increase( which is largely due to the grants for the institutions transferred to the panchayats$ The receipt under this grant was >ero during B<<9@<B( and this contri&uted 68O during the ne)t year$ WM+4.enditure Pattern *ow lets ha%e a look at the e)penditure pattern of the three +Ps$ The ta&les (8$2# 8$1= and 8$11) gi%en in the end of the chapter present the e)penditure incurred &y the three +Ps on %arious items$ As( e%ident from the ta&les( the +Ps ha%e spent on all the functions entrusted to them$ 2owe%er( the ma#or share is taken &y the pu&lic works (roads( &ridges etc$)$ In case of Thri%okk%ili%attam B<$C6 in B<<9@<B and 9BO in B<<@<C was spent on pu&lic works$ This does not include the share of pu&lic works which might ha%e &een spent under Decentralised Plan category( as &reak@up of the same are not pro%ided in the &udget$ It is important to note that a&out :<O during B<<9@<B and 6<O during B<<B@<C were to &e incurred on the decentralised V The 3conomic "e%iew &y the Planning K 3conomic Affairs Department of the state go%ernment( a%aila&le on the go%ernment we&site( states7 DThe fiscal crisis of the State has had its impact on

decentrali>ation$ The plan allocations to local go%ernments were limited to three@fourth of the originally planned outlay in the last two years$ 3%en for the amounts sanctioned ways and means restrictions ha%e delayed payments at the local le%el$ Delay in payments to &eneficiary committees and contractors e)ecuting the pu&lic works ha%e the potential of offsetting the cost ad%antage which the local go%ernments ha%e shown in the e)ecution of pu&lic works as they ha%e &een hitherto prompt in making payments$ Similarly( delays in payment to indi%idual &eneficiaries has affected the credi&ility of local go%ernments as de%elopment institutions$E It can &e accessed on http7??www$kerala$go%$in?deptMplanning?ecnomicr%wM9B$ht m planning( which is pro%ided to the panchayat &y the state go%ernment from the plan fund$ Jater supply and drainage( pu&lic health( social welfare( pension for agriculture la&ourers( unemployment allowance( and pension for handicapped( old age and others are some of the other items the panchayat allocated its money on$ Another important note from the )able D 8$2 is the total e)penditure of +P Thriko%alli%attam has declined in a&solute term during the period of two years$

So did the e)penditure on most of the functions mentioned$ The total income of the panchayat also declined( as we ha%e seen a&o%e$ The total e)penditure of the panchayat declined from "s$ :<C;<$V thousand to "s$ B9<8B thousand during the period$ 3)penditure on pu&lic works declined from "s$ "s$ PB<< thousand to "s$ B6C; thousand and that on agriculture from "s$ PB6$; thousand to "s$ VP$P thousand$ In *agalessary ()able D 8$1=) B:O (9P$:OY6$VO) of total panchayat e)penditure is to &e spent to pu&lic work during B<<C@<:$ This was meagre B$VO during B<<<@ <9$ .a#or e)penditure was made on management and collection (honorarium for president and mem&ers( salary of secretary( tra%el allowance to the mem&ers and president and other office e)penses)$ 2alf of the money was spent on endowments$ The total e)penditure of the panchayat increased more than fi%e times during the period( which is in conformity with the increase in panchayatHs income$ In case of ,achira +P ()able D 8$11)( we ha%e data only for the year B<<B@<C$ A&out ;CO of the total e)penditure was incurred on management and collection

during the year$ Two other ma#or items( on which panchayats ma#or allocations were made( are Pu&lic 2ealth (9<$:O) and (street) /ighting (9<$:O)$ F Bloc- Panchayats 4lock Panchayats (4Ps) are intermediary panchayats &etween +rama Panchayat (+P) and District Panchayats (DP)$ Je ha%e &udget copies for two 4Ps7 .alampu>ha (Palakkad) and ,achira (!ollam) for the year B<<C@<:$ 2ere we analyse the income and e)penditure pattern of two 4Ps$ WM ncome Sources )able D 8$5 &elow presents the income from %arious sources as gi%en in the &udget copies pro%ided &y the respecti%e 4P offices$ As shown in the ta&le the ma#or income for &oth the 4Ps comes from go%ernment grant (6:O and 98O respecti%ely)( including share in assigned ta)es( and from 0entrally Sponsored Schemes (0SSs) (CVO and ;<O)$ ,ther incomes include grant for the institutions transferred to the panchayats (P$PO( in case of ,achira) and salary for the transferred staff (P$CO( in case of .alampu>ha)$ )able D 8$5 ncome for BPs budget 9=='*=8 (in "s$ 1===) .alampu>ha Percent to Total ,achira

Percent to Total +o%t grants and contri&ution 9;6CC$P 6C$8 9<B<< 98$< .iscl "e%enueZ :<P$V 9$C Salary from +o%ernment B;<<$< P$C 0SS 99;9B$< CV$< CP<<< ;<$V S0?ST De% B<:$< <$V Institutions transferred to panchayatsZZ :;B6 P$P .iscl IncomeZZZ CC< <$V De&t 2ead 66< 9$< CB66P$: 9<<$< 6CP<6 9<<$< Z Includes S0 de%elopments( health( agriculture and other schemes$ ZZ Includes income from 4P assets( income from deposits and others$ ZZZ Includes =outh De%elopment( 4P share( Social Jelfare( 2igher 3ducation( 2ealth and Fertili>er$ WM+4.enditure Pattern As far as e)penditure &y the 4Ps is concerned( here again the pu&lic works gets priority and more than half of the ,achira 4P e)penditure during B<<C@<: is to &e incurred on pu&lic works$ 2owe%er( in case of .alampu>ha it is 9<$PO$ .alampu>ha 4P has &udgeted to spend CVO on social security schemes (including po%erty alle%iation and housing) and 9PO on S0?ST welfare (which

include housing( water supply( entrepreneurship training etc$)$ S0 welfare schemes get a&out 96O of ,achira &udget e)penditure$ )able D 8$6 +4.enditure .attern of BPs 9=='*=8 (in "s$ 1===) Items ,achira Percent to total .alampu>ha Percent to total 3sta&lishment V<V 9$9 6< <$B Salary B;<< P$C 3ducation 696 9$< 9B6 <$: Jater Supply and drainage 66< 9$; Pu&lic health 86< 9$P 6C8 9$; Sanitation ;6< 9$: <$< Agriculture :6<< P$: 9<B6 C$9 Industry 9B6< B$C 9V96$V 6$< Pu&lic works BPCB6 6B$; C6<< 9<$P Social welfare 9<< <$C Anganwadi 9BB6 B$C Soc Security Schemes 6;<< 9<$V 99;9B CV$< 3lectricity and 0on%entional energy C6< 9$9 8<$C <$C S0?ST welfare 689V 9P$B Jomen welfare 96<< B$P B6P9$V ;$8 S0 welfare ;P;< 9:$V B<: <$V De&t Account 66< 9$< <$< .icsl 96<< :$V

Total 6C;:9 9<<$< CB66P$6 9<<$< F District Panchayat 4udget document of !ollam DP for the year B<<C@<: and AFS of Palakkad DP for the year B<<B@<C (pro%iding data for the three years) are a%aila&le$ 2ere we present an analysis of income and e)penditure of the two DPs$ WM ncome Sources Je ha%e data for &oth !ollam and Pallakad District Panchayats (DPs)$ The income of the DPs from different sources are presented in the ta&les &elow$ In !erala( like the 4lock Panchayats( District Panchayats (DPs) also do not ha%e any ta) income$ DPs do get share in assigned ta)es from the state go%ernment( details of which are not a%aila&le in case of !ollam (Ta&le :$P)$ In Pallakad( howe%er( we ha%e &reak@up of different kind of grants pro%ided &y the state go%ernment (Ta&le :$;) for three years7 9888@<<( B<<9@<B and B<<B@<C$ As e%ident from the ta&le( the share of &asic ta)es was #ust 9$:O during 9888@<< and B<<9@<B( in the district( which declined to <$8O during B<<B@<C$ The DP had negligi&le non@ta) receipts during all these years$ "est of the income came from plan and non@plan grants pro%ided &y the state go%ernment$ Share of grant

pro%ided for decentralised planning from the state plan fund is 'uite high (;C$6O( P<$6O and P6$:O during the three years respecti%ely) during all the years and has shown an increasing trend$ )able D 8$& Pala--ad Eila Panchayat Budget 9==9*='# ncome (in "s$ 1===) Sources of ncome 9888@<< Percent to total B<<9@<B Percent to total B<<B@<C Percent to total Assigned )a4es B$ 4asic Ta)es 9:PB$6 9$: 9696$; 9$: 9696$; <$8 Non )a4 "evenue <$< <$< <$< .iscellaneous "eceipts 968$; <$B C<C <$C VPC$P <$: Non*Plan Non*Statutory Grant 9V8B 9$V 9;C< 9$6 96<< <$8 ?ther Grants in Aid <$< <$< <$< Non*Plan Grants for maintenance of transferred institutions <$< <$< <$< Agriculture B6V <$B B:C$: <$B BC8$; <$9 Animal hus&andry 6<BV$P :$8 B<P8 9$8 9PV$: <$9 Diary De%elopment <$< <$< <$< Fisheries B6< <$B 9<< <$9 <$< Industries B <$< 9:< <$9 C8 <$< Pu&lic Jorks 699V$C 6$< :98P C$P ;PB6 :$6 Jater Supply and

Drainage ? /iteracy mission 9::$C <$9 <$< <$< 2ealth <$< <$< <$< Allopathic C8P <$: ;<P <$V 66< <$C Ayur%eda <$< <$< B;: <$B 3ducation 69<C$V 6$< :VVV$; :$B 99<9V$: V$: 2ousing 66< <$6 <$< <$< /a&our and 3ployment 9$C <$< <$< <$< Social Jelfare 9P<C 9$P B9;< 9$8 8B8 <$6 =outh Jelfare 6< <$< 9<< <$9 <$< S0?ST De%elopment 9B< <$9 CC< <$C :66 <$C "ural De%elopment <$< <$< <$< A 0ooperati%es B<< <$B <$< <$< 4 .inor Irrigation :8<< :$P C6<< C$9 <$< Plan +rants for Decentralised Planning ;6V:8$6 ;C$6 8<969$6 P<$6 9:V8:B$C P6$: De&t 2ead Account <$< <$< <$< Grand )otal 1=92=5$=1 9<<$< 111285$' 9<<$< 1&9156$' 9<<$< The income data of !ollam DP is a%aila&le for the two years7 B<<B@<C and B<<C@ <:$ In !ollam district( the ma#or share (a&out P;O) of grants comes from the grant for the functions of different departments during &oth the years$ 99$:O during B<<B@<C and 9B$BO during B<<C@<: has come under the D!erala De%elopment SchemeE$ The total income of the DP has increased &y :$VO in B<<C@<: o%er the pre%ious year$

)able 8$3 7ollam DP D ncome (in "s$ 1===) B<<B@<C B<<C@<: Plan *on Plan Total Plan *on Plan Total Increase o%er the last year (O) +eneral 88<< 88<< ;<<< ;<<< @B8$C Share in Total <$; <$: For Different Dept 9BC;V6B (8:$:) ;C;:8 (6$V) 9C99:<9 9B:CP66 (89$B) 99866V (P$P) 9CVC:99 C$P Share in Total P;$8 P;$: !DS 9;<<<< 9;<<<< 98<<<< 98<<<< 99$P Share in Total 99$: 9B$B Total 9:<;;:V (8:$:) PCV6:$V (6$V) 9:89CP8

9:CC8:V (89$8) 9BV6V:$P (P$9) 96V<:8P :$V WM+4.enditure Pattern The e)penditure patterns in the two districts are 'uite different (Ta&les :$9B and :$9C at the end of the chapter)$ Jhere in !ollam most of the e)penditure is on water supply (B;$BO and BVO respecti%ely in B<<B@<C and B<<C@<:) and housing (::O and :BO respecti%ely in B<<B@<C and B<<C@<:)( in Palakkad( it has &een mostly spent on producti%e sector$; D!erala De%elopment SchemeE gets 99$:O in B<<B@<C and 9B$9PO in B<<C@<: in !ollam DP$ /ooking at the income and e)penditure pattern of the P"Is at all three le%els two important o&ser%ations are made here7 ?ne( it has &een suggested &y some academics that ratio of own income of panchayat &odies to their total income can &e taken as an inde) for financial autonomy of the P"Is$ 0onsidering this( the financial autonomy of *agalessary and ,achira gram panchayats was 'uite high during B<<<@ <9 and B<<B@<C respecti%ely and it is 'uite low in case of Thriko%il%attam$ The ratio declined in

the case of *aggalessary during B<<C@<: as the share of go%ernment grant increased$ 2owe%er( another %iew is( the ratio of tied fund to the untied fund could &e a &etter indicator (Vyasulu( B<<<)$ Je are una&le to gauge the le%el of autonomy of the pancahayat &odies using this parameter( as we ha%e no segregated data on tied and untied grants a%aila&le to the panchayats$ 2owe%er( in case of !erala this certainly would &e a &etter parameter as at &lock and district le%els the panchayat &odies ha%e no own income$ Since( in case of !erala( most of the plan fund de%ol%ed to the panchayat &odies is in form of untied fund( one can safely say that the P"Is in !erala could &e in &etter position in regard to financial autonomy( according to this parameter as well$ )wo( taking the e)penditure side of the &udgets of the a&o%e pancahyats( it can &e noted that most of the e)penditure has gone to the pu&lic works (road( &ridges etc$) specially in case of +Ps and 4Ps$ The core ser%ices like primary education and health ha%e got less amount$ Some other ser%ices like water supply and street lighting ha%e got more compared to health and education in some cases$

2owe%er( in !ollam DP &udget water supply has got the second highest allocation after housing$ The ser%ices like education and health ha%e got %ery tiny share at district le%els too$ ; According to the guideline issued &y Planning and 3conomic Affairs department (+o!( B<<C)( the local &odies ha%e to follow certain norms regarding the share of different sectors in the plan$ In case of DP minimum B6O of the plan should go to the Producti%e Sector( which includes pro#ects relating to agriculture( animal hus&andry( dairy de%elopment( fisheries( watershed management( SSIs( non@con%entional energy etc$ ,ther two sectors are7 Ser%ice Sector (includes 3ducation( 2ealth( Sanitation( Drinking Jater( Soc Jelfare( *utrition( 2ousing( 0ulture) and Infrastructure (includes "oads( 4ridges( energy( &uildings for general administration)$ Q2F2LJ-D,/V2+MC,DLL/L1 M The most important feature of the !erala decentrali>ation process is the in%ol%ement of people in the de%elopment planning of area$ The !erala Panchayat "a# Act pro%ides for preparation of de%elopment plan &y e%ery panchayat e%ery le%el( in respect for the functions %ested in it( for the respecti%e panchayat area$ The Act directs the Village Panchayats (+Ps) to prepare the

de%elopment plan ha%ing regard the plan proposals su&mitted &y the +ram Sa&ha$ 4esides the annual and a fi%e@year de%elopment plan( the panchayats are also e)pected to prepare a perspecti%e plan for@seeing a period of fifteen years$ )he Peo.le0s Planning Cam.aign launched by the government in August 1226 was a massive effort to mobilise .eo.le# elected re.resentatives# retired officials and .rofessionals# voluntary organi,ations etc$ to ta-e .art in the .rocess of .lanning being done by the .anchayats in their res.ective areas$ The Panchayats at all three le%els prepared annual de%elopment plan for the last four years of the *inth Fi%e =ear Plan period (988;@B<<B)$ In the &eginning of the Tenth Fi%e =ear Plan it was decided &y the go%ernment that panchayats should prepare a fi%e year plan for the 9<th Plan period (B<<B@<;)$ Though the PeopleHs Planning 0ampaign is o%er now &ut the P"Is ha%e prepared the Fi%e =ear Plans$ All the panchayat offices we %isited had their de%elopment plans printed in .alyalam$ The District Planning 0ommittees ha%e prepared a consolidated draft plan of the district$ The State +o%ernment has

issued guidelines for the planning to &e done &y the panchayats (one for e)ample( and the latest is +o!( B<<B) and the P"Is prepared their plans according to the guidelines$ The decentralised planning in !erala has some %ery interesting features$ .any researchers and scholars ha%e written in detail a&out this$P M UFF"TLJ/L1MDL+MUT+/J/L1M The !erala Panchayat "a# Act pro%ides for constitution of Village Fund (at +P le%el)( 4lock Panchayat Fund (at 4P le%el and District Panchayat Fund at DP le%el$ All the money recei%ed &y the panchayat shall &e consisted in the panchayat fund of the respecti%e panchayat$ All the e)penditure of the panchayat shall come from its panchayat fund$ P The decentralised planning process adopted in !erala is one of the much discussed (and admired) issues$ Isaac( B<<< pro%ides a detailed study and an insider %iew of the decentralised planning and the peopleHs planning campaign$ Some others are7 .ohankumar( B<<B and B<<CS "aghuram( B<<<S 0hathukulam and 1ohn( B<<B etc$ The accounts of receipt and e)penditure of e%ery panchayat are maintained in the cash register$ The 3)aminer of /ocal Fund Accounts (/FAD) is the auditor of

the Panchayat( which conducts annual auditing of the panchayatHs accounts$ F Performance Audit 4esides /FAD audit( there is pro%ision of Eperformance cum correcti%eE audit for the panchayats in the state$ It aims at the 'uarterly re%iew of the administrati%e measures$ 4y means of performance audit( irregularities can &e detected and it also gi%es chances to a%oid such irregularities and remedy the a%oida&le errors$ The performance audit teams ha%e &een organi>ed &y deploying employees from the Secretariat and Panchayat?.unicipal Departments$ The +o%ernment ha%e decided to appoint an official not &elow the rank of a Deputy Account +eneral as the State Performance Auditor$ The performance audit teams %isit the panchayat offices on a prescheduled date$ A notice informing the date of %isit of the performance audit team is put on the panchayat notice &oard$ Any person from the panchayat area( if wants( can go to the panchayat office and make complaint a&out any misconduct( if any in regarding the panchayatHs finances to the audit team$ F Social Audit The +ram Sa&ha discusses the issues related to &udget and planning$ It has a

right to know a&out the &udgetary pro%isions( the details of plan outlay( item wise allocation of funds and details estimates and costs of materials of works e)ecuted or proposed to &e e)ecuted within the area of +ram Panchayat$ The Audit report or the performance audit report is placed for the consideration of the +ram sa&ha and is discussed in the meeting and its %iews recommendations and suggestions are communicated to the concerned +P$ C2"S,2[VMC2-F2SJ/"LM To understand the peopleHs %iew a&out the whole process of decentralisation and the panchayat finances we conducted inter%iews with elected representati%es (generally the president of the panchayat and also some mem&ers in few cases) and the staff (generally panchayat secretary or( in some cases( clerks) with a kind of semi structured schedule$ Also focus group discussions were organised with %illage people in two panchayats$ A summary of what was gathered is presented &elow7 F +lected "e.resentatives and Panchayat Staff( +enerally the awareness decentralisation process( functions and duties of panchayats is 'uite high in the state$ It is 'uite natural( considering that it is the

se%enth year of decentralisation planning in the state$ The state has also seen the e)tensi%e campaign for peopleHs planning$ +enerally the panchayat representati%es and staff were satisfied with the decentralisation process$ 2owe%er( there are some changes introduced recently with which these people are not %ery comforta&le$ Some of the issues raised during the inter%iews are summarised &ellow7 o The changing rules ha%e created pro&lem$ Some of the su&#ects?functions gi%en under the control of has &een taken away$ For e)ample( earlier the president of the DP was 0hairperson of District Tourism 0orporation$ *ow this has gone &ack to the district collector and DP president is #ust a mem&er$ From B<<9@B<<B onwards the Plan Fund for ST ? S0 welfare is decided to &e administered through S0?ST Jelfare Department$ Some officials?staff ha%e also &een taken away from the control of the panchayats and then again transferred &ack$ o Cut in grants for decentralised planning pro%ided &y the state go%ernment was also mentioned &y &oth the elected representati%es and staff?officials$ It was generally complained that the pro#ects sanctioned &y

the DP0 had to &e dropped &ecause of this$ A%aila&ility of cash and nonencashment of che'ues issued from the treasury were also mentioned$ It is una%aila&ility of li'uid money which is creating pro&lem$ ,ne 4D, (secretary to the 4lock Pancahayat) said( the fiscal crisis of the state go%ernment is &ecoming a pro&lem for the P"Is and decentralised planning$ As we ha%e seen a&o%e( the state go%ernment admits this pro&lem in one of its documents$ o The P"Is ha%e prepared plans for a period of fi%e years (B<<B@<;)( which has &een appro%ed &y the DP0s$ The annual plans are taken from the fi%e year plan document$ There is a pro%ision of di%erting from the plans( not more than( 96O in a year$ This poses pro&lem for some P"Is( which want to take up some other work( which is not part of the plan$ It was mentioned that some work may ha%e to &e done &ecause of natural calamities or need of some e'uipment (like photo copy machine) may arise in the office$ o Some representati%es (and *+, acti%ists also) felt that &ureaucrats are now ha%ing greater say in the planning process$ The bureaucratisation

of the decentralised .lanning .rocess has &een o&ser%ed &y some scholar?acti%ists as well$8 o It was also mentioned that the assistance pro%ided under Indira Awas =o#na (which is under the +Ps control( in terms of deciding &eneficiary) is "s$ C6<<< only &ut the assistance pro%ided &y the line department of S0?ST Jelfare (which is now( not under the panchayatsH control and is dealt &y the 4D, office) for house construction only is "s$ ;<<<<$ This is a clear e)ample of undermining the .anchayat bodies( according to an elected representati%e$ o The introduction of beneficiary contribution in some of the programmes has created pro&lems$ According the elected representati%es 8 See for e)ample( .ohankumar( B<<B and B<<C$ as well as the staff?officials( the poor families do not ha%e money to make contri&utions and some programmes( especially related to agriculture and irrigation( remain unimplemented$ o 3arlier( there was pro%ision of &eneficiary committees for the implementation of the pro#ects( which is now replaced &y the contract

system$ This has scaled down peopleHs interest and their le%el of participation( felt some representati%es and staff as well$ o It was also felt that there was a need to pro%ide training to the newly elected re.resentatives( particularly to those elected for the first time$ The training &eing pro%ided now is not sufficient according to them$ They felt that the peopleHs planning campaign should ha%e &een continued for some more time$ F Common Peo.le( %indings of %GDs In !erala( we had chances to discuss with two women groups$ ,ne in 0lappana +ram Panchayat in ,achira 4lock of !ollam District and the other in Aktherthara +ram Panchayat in .alampu>ha 4lock Panchayat in Palakkad DP$ In the discussions we focussed on +ram Sa&ha( the kind of issues raised in the +ram Sa&has( their participation le%el in the planning and the space for women issues in the discussions and planning process$ o Partici.ation in Gram Sabha and the issues raised .ost of the women ha%e had participated in the +ram Sa&has$ Jomen told that they talk a&out roads( canal( electricity( drinking water etc$ in the meetings$ 0anal for draining the water from the fields was needed in 0lappna %illages( as the

seawater would make their fields saline$ In Akththara( the main concern was irrigation$ They take water from .alampu>ha dam to irrigate their lands( &ut now there was less water in the dam itself (Pallakad is one of the districts declared as drought hit &y the state go%ernment this year$ The other important issue was lack of employment and income sources$ o Planning .rocess Jomen were generally aware of the planning process$ ,n asking( they said that they had raised these issues in the +ram Sa&has( when the planning process was going on$ They felt that anganwadis and Self 2elp +roups (S2+s) were the issues related to women li%es and they did discuss it in the +ram Sa&ha$ They generally felt that issues related to women are discussed in the gram sa&has &ut some women did feel these issues get sidelined somehow$ A&out the issue of womenHs health( women said that its important &ut generally it is addressed in the (Primary 2ealth 0entres (P20s)$ They get medicine and immunisation in the P20s$ Drinking water is a%aila&le in the 0lappna %illages &ut Akthethara women mentioned it as a pro&lem$ They had to walk to some other street to fetch water$ o S.ecial efforts for women

Jomen felt that the e)pansion and di%ersion of S2+s9< may &e a good step$ The Akhthethra women were planning to start a rice &usiness and 0lappna women had #ust &ought a piece of land to shift their coir making machines to$ ,ne more group in a near &y %illage was running an em&roidery workshop and a spicegrinding &usiness$ Jomen felt that this can generate employment and income to some e)tent$ Jomen were generally satisfied with the o%erall performance of the panchayats( &ut they were not much aware a&out &udget and auditing$ ,ld women felt that panchayats were now working in much &etter ways than earlier (a&out 9<@96 years ago)$ 3arlier the panchayats would only inter%ene when there was a 'uarrel &etween two families or indi%iduals( and collected ta)es now panchayats do so much of work( said the women$ To sum it up( the P"Is in !erala( ha%e &een gi%en functional and financial autonomy to a large e)tent$ The percentage of own income in the +Ps total income is 'uite high and also the grants de%ol%ed to the P"Is is largely untied grant$ The participation of people in the planning process has &een ensured

through the ward sa&has and gram sa&has$ 4ut the women we interacted generally were not aware a&out the accounts and audit procedures or the &udget making processes$ The pro%isions like om&udsman and performance audits are some uni'ue pro%isions in !erala panchayat ra# act$ 2owe%er the introduction of user charges and a%aila&ility of less plan fund are some of the pro&lems that panchayats are facing lately$ 9< The S2+s are &eing run all o%er the state under a go%ernment programme called D!utum&shreeE( meaning neigh&ourhood groups( with the help of Panchayats$ )able D 8$2 +4.enditure .attern D )hri--ovilvattam (in "s$ 1===) 3TP3*DIT-"3 B<<9@<B 43 Percent to Total B<<B@<C 43 Percent to Total A$ +3*3"A/ A00,-*T I .anagement and 0ollection BP;P$6 ;$9 9PBP$8 P$; II Pu&lic Jorks PB<< B<$C B6C;$< 9B$< III 3ducation BBB <$6 69$: <$B IV water Supply and Drainage 99;6 B$8 <$<

V Pu&lic 2ealth 88P$6 B$6 :B$; <$B VI /ighting V6< 9$V 6<8$8 B$: VII Agriculture 9C6 <$C 9:$: <$9 T Panchayat properties CB6 <$P <$< +rants for transferred institutions @ *on@Plan <$< <$< 9 Agriculture V8<$; 9$; 6:$: <$C B Animal 2us&andry C<8$< <$P <$< C ;6$: <$B <$< : Industry B$8B9 <$< <$< 6 Social Jelfare B6<<$6 V$B <$< V 2ealth 9<$9 <$< 8$V <$< ; Ayur%eda 9P$V <$< <$< P 2omeopathy 96 <$< <$< 8 3ducation 8B$< <$B ;C$P <$C 9< 3mployment <$< <$< a Pension for Agricultural Jorkers P<< B$< 6;B$< B$; & -nemployment Allowance 9C<< C$B BP:9$P 9C$6 99 S0?ST welfare V$; <$< <$< 9B .inor Irrigation ;P$: <$B <$< 9C Social Jelfare Pension <$< <$< A I 5555$ Pension 6<< 9$B VP<$6B C$B II Pension to handicapped :<< 9$< :C8$C B$9 III loan for marriage of widowsH daughters 9<< <$B :< <$B 4 *ational security scheme <$< <$< I ,ld age pension V<< 9$6 :CP$:<; B$9 II *ational .others scheme B<< <$6 <$< 2ousing 9:< <$C <$< 4 0apital Account 9V<< :$< <$< Decentralised Plan 9V9P;$C :<$9 9<P<P$9V 69$B 0 D34T 23AD A00,-*T 9V< <$: 9:8$;<9 <$; Total :<C;<$V 9<<$< B9<8B$< 9<<$<

)able D 8$1= +4.enditure Pattern * Nagalassery GP (in "s$ 1===) B<<<@<9 Percent to total B<<C@<: Percent to total A$ +3*3"A/ A00,-*T I .anagement and 0ollection 9:<8$V CV$C B8C9$6 9:$C II Pu&lic Jorks 9B$: <$C C;V6 9P$: III 3ducation 98$P <$6 CPV 9$8 IV water Supply and Drainage BV$; <$; 9C<< V$C V Pu&lic 2ealth C:$C <$8 6V; B$P VI /ighting V8$8 9$P VV< C$B VII Agriculture 9<V$: B$; B6< 9$B VIII Animal hus&andry <$< 9<< <$6 IT Social Jelfare 9;$9 <$: 9VPB P$B Fishery <$< <$< Forestry <$< 6<< B$: SSIs <$< 6<< B$: 2ousing <$< B6< 9$B 3lectricity and con%en energy <$< <$< Po%erty all and rural de% <$< 9<< <$6 <$< 6< <$B <$< 9< <$< S0?ST De% <$< C<:B$V 9:$P .isc <$< 9<<< :$8 0ontri&ution of go%t$ to pay <$< <$< T Panchayat properties BP$P <$; P:6 :$9 4 0apital Account <$< .angemnet 6<< B$: Pu&lic Jork @ Plan <$< Pu&lic Jork @*on Plan 8<$C B$C 996< 6$V 3ducation 8$V <$B 9<< <$6 Jater Supply and Drainage B<< 9$<

Pu&lic 2ealth C;$P 9$< 9C< <$V /ighting Account Street /ight instalation 9$C <$< 6< <$B 3ndowment 986C$: 6<$C 9< <$< 0 D34T 23AD A00,-*T V:$9 9$; :B< B$< Total CPP9$; 9<<$< B<:88$9 9<<$< )able D 8$11 +4.enditure Pattern D ?achira 9==9*=' (in "s$ 1===) A$ +3*3"A/ A00,-*T Amount Percent to Total I .anagement and 0ollection B96B$; ;B$8 II Pu&lic Jorks CP$; 9$C III 3ducation ;C$< B$6 IV water Supply and Drainage <$B <$< V Pu&lic 2ealth CCB$: 99$C VI /ighting C<6$8 9<$: VII Agriculture VIII Animal hus&andry :$B <$9 IT Social Jelfare C:$: 9$B T Panchayat properties 4 0apital Account 0 D34T 23AD A00,-*T 9B$; <$: Total B86:$9 9<<$< )able D 8$19 Eila Panchayat Pala--ad# +4.enditure (in "s$ 1===) 9888@<< Percent to total B<<9@<B Percent to total B<<B@<C Percent to total "evenue +4.enditure

General Account (?wn %und) CB98$: B$9 BPC6$C B$C BP6:$P 9$; )ransferred Sub@ects (Non Plan) Social Services +eneral 3ducation :9P8$8 B$; C;;B$P C$< PB9:$C 6$< Technical 3ducation 9:V$: <$9 B8$B <$< 98:$8 <$9 .edical and Pu&lic 2ealth 9<$< <$< 9<BP$: <$P PPC$9 <$6 /a&our and 3mployment B:9B$P 9$V Social Security and Jelfare C<BB$C B$< B<B<$V 9$V 9C;C$: <$P Jelfare of S0 ? ST 9<9$6 <$9 8C$9 <$9 BC8$; <$9 +conomic Services 0rop 2us&andry 88<$8 <$V B6;V$6 B$9 9;6$V <$9 Animal 2us&andry PP:B$6 6$; B8VB$C B$: 9P;P$6 9$9 Fisheries :8;$6 <$C C6V$6 <$C 9P;$: <$9 0ooperation B6B$V <$B 9:8$6 <$9 6C$; <$< Soil 0onser%ation 99B$6 <$9 9P$V <$< C9$V <$< .inor Irrigation <$< P:::$8 V$; <$< ,ther "ural De%elopment Prog 9B6<$< <$P 66<$< <$: <$< "oads and 4ridges CVBP$: B$: P9V:$< V$6 8BPV$C 6$V Village and Small Scale Industries BC$9 <$< 9:<$< <$9 V<$6 <$< Ca.ital +4.enditure Plan Fund 3)penditure of Transferred Su&#ects Social Ser%ices Arts?0ulture?Sports?=outh Jelfare 6<$< <$< 6<$< <$< <$< .edical and Pu&lic 2ealth 9P8$8 <$9 3conomic Ser%ices Village and Small Scale Industries :<<$< <$C Plan 3)penditure under Decentralised Planning

Producti%e Sector 9B:PBB$: P9$9 89VV<$C ;C$B 9CPP;P$<9 P:$: Infrastructure Sector Ser%ice Sector C66$V <$B <$< <$< De&t 2ead 3)penditure 69$: <$< B6$< <$< VB$< <$< Total 96C8;8$9P 9<<$< 9B6B;; 9<<$< 9V:6VC$P 9<<$< )able D 8$1' Eila Panchayat 7ollam# +4.enditure (in "s$ 1===) B<<B@<C Percent to total B<<C@<: Percent to Total General +4.enditure 88B9 <$; ;6<< <$6 Different De.t$ <$< < <$<< Pu&lic Jorks BC6<< 9$V BV<<< 9$; +eneral 3ducation 9BP<< <$8 :B<<< B$; Technical 3ducation 9P;6 <$9 9P;6 <$9 Art ? Sports? /iterature VB6< <$: :B6< <$C Jater Supply :<6:<< B;$B :<6:<< BV$< 2ousing V6<<<< :C$; V6<<<< :9$; /a&our 99<< <$9 99<< <$9 Social Jelfare CB<< <$B C6<< <$B Jomen Jelfare 66<< <$: B6<< <$B 0ooperation CB6< <$B C<<< <$B Jelfare of S0?ST and ,40 P9<< <$6 PV<< <$6 0rop 2us&andary CP<< <$C BV<< <$B Soil 0onser%ation BV6< <$B BV6< <$B .inor Irrigation 9B9<< <$P 9B9<< <$P Food storage?supply?market 6<< <$< V<< <$< Animal 2us&andry 8B;< <$V 8:<< <$V

Fisheries 986< <$9 9:<< <$9 "ural De%elopment CP<V< B$V :B6<< B$; SSIs @ Villege /e%el ;PB< <$6 99<<< <$; 3lectricity?0on%entional energy 9<< <$< 66 <$< ,ther De%elopment Prog$ 9<B6< <$; 9<B6< <$; De&t Account 9B6 <$< 9B6 <$< 2ealth 996<< <$P 9CV<< <$8 Sanitation P6<<< 6$; P6<<< 6$: Income Sources from the Dept$ under DP < <$< 6<<< <$C /ocal Self +o%t$ 0ontri&ution 6<<< <$C 96<<< 9$< DP .odification?reno%ation B6<< <$B Plan %und !erala De%$ 9$ 2ealth 9<<<< <$; 99<<< <$; B$ Sanitation 6<<< <$C 9C<<< <$P C$ 3n%ironment Protection 6<< <$< 66< <$< :$ Tourism 6<<< <$C 6<<< <$C 6$ Agriculture and allied acti%ities B9<<< 9$: BBV<< 9$: V$ Jater Supply and Flood 0ontrol 9<<<< <$; BBP<< 9$6 ;$ 4usiness 96<<< 9$< 9VV<< 9$< P$ 3ducation 96<<< 9$< V<<< <$: P$ SSA < <$< 9<<<< <$V 8$ 2ousing 6<<<< C$: B<<<< 9$C 9<$ Social Jelfare B6<< <$B 9<<6< <$V 99$ Pu&lic Finance 9<<< <$9 9<<< <$; 9B$ 3nergy 9<<<< <$; 9C6<< <$8 9C$ Transport B<<<< 9$C CB8<< B$9 9:$ ,ther &uildings 6<<< <$C 6<<< <$C 9:P8<B9 9<<$< 96686<6 9<<$< "a#asthan

"a#asthan was the first state in the country to adopt the three tier system of Panchayats formally( on ,cto&er B( 9868$ Following the 4alwant "ai .ehta 0ommittee report the "a#asthan Panchayat Samitis and Aila Parishads Act was enacted in 9868 and the "a#asthan Panchayati "a# Act 986C was amended$ These acts made pro%isions of including women and S0s?STs in these elected &odies (-nnati( B<<<)$ Prior to the ;Crd Amendment Act P"Is in "a#asthan were go%erned &y these two acts$ After the ;Crd Amendment to the Indian 0onstitution the "a#asthan Panchayati "a# Act 988: was enacted on April BC( repealing the 986C and 9868 Acts$ The 988: Act pro%ides for a three tier system of panchayats( +ram Panchayats at %illage le%el( Panchayat Samitis at &lock le%el and Aila Parishads at district le%els$ The mem&ers and heads of panchayat &odies at all three le%els are elected &y direct elections$ Aila Parishads also ha%e the ./As and .Ps in from the district &oundaries as mem&er( &esides the elected representati%es$ Sarpanch( Pradhan and Pramukh are the heads of +ram Panchayats( Panchayat Samitis and Aila Parishads respecti%ely$ The

functions and powers of P"Is at %arious le%els are descri&ed in the sections 6< to 6B of the Act$ Three schedules in the Act list the functions and powers of the P"Is at three le%els (Appendi) IT)$ For conduct of fair elections of the panchayat &odies( the "a#asthan Panchayat "a# (3lections) "ules 988: were framed$ The rules pertaining to the "a#asthan Panchayati "a# Act 988:( known as the "a#sthan Panchayati "a# Act 988V were framed in 988V$ 0entral go%ernment passed Panchayat (3)tensions to the Scheduled Areas) Act (P3SA Act) in 988V( which ga%e further autonomy to the P"Is in the V Scheduled areas$ "a#asthan go%ernment passed an act in this regard 9888( known as "a#asthan Panchayat "a# (3)tension to Scheduled Areas) Act( 9888$ ) /LDLF2VM"IMCDLF!DNDJMM(PS"-JDLJMC-"=/ V/"LVM/LM6D.DVJ!DLM The go%ernment has transferred 9V functions to the P"Is (Appendices III and IT)$ The "a#asthan Panchayat "a# Act 988: pro%ides for %arious financial powers of P"Is in the state$ Sections V6 to V8 of the act contain the pro%isions related to the ta)es( which the P"Is in the state can impose$ The ta&le &elow pro%ides a list

of the %arious ta)es( which can &e imposed &y the panchayat &odies at all three le%els7 )able D 5$1 Provisions of )a4es by the P" s According to the "a@asthan Panchayati "a@ Act 1228 Gram Panchayat Panchayat Samiti Eila Parishad o 4uilding Ta) o ,ctroi on animals or goods o Ta) on the rent paya&le for use or occupation of agricultural land o Fee for licence for a fair or mela o Jater rate( where supply o Vehicle ta) e)cept for those which used for culti%ation o Pilgrim ta) o Ta) for arranging drinking water o Ta) on commercial crops (chillies( cotton( mustered( sugarcane( >eera( ground nut) o Special ta) on adult mem&ers for any pu&lic work o /icence fees o Ta) on trades( callings(

professions and industries as may &e prescri&ed o Primary education cess o Panchayat Samiti fairs of drinking or irrigation water is &eing made &y the Aila Parishad o Surcharge up to fi%e percent on stamp duty on sale of property in rural areas o Surcharge up to half percent on the market fee on agriculture produces Source7 Second State Finance 0ommission "eport( +o" The Panchayat "a# "ules( 988V outlines for the rules for the limits( rates and the collection of ta)es$ Patwari (the staff who maintains land records and collects land re%enue) is responsi&le for maintaining the records of demand reco%ery and &alance of ta)es at +ram Panchayat le%el$ The patwari is paid 6O as collection charges$ Surcharge on stamp duty shall &e collected &y su& registrar for properties transferred in rural areas and deposited with Aila Parishad$ "eco%ery of surcharge on agriculture produce is to &e done &y the Secretary .andi 0ommittee$

2owe%er( the Second State Finance 0ommission of the state o&ser%ed Dthe P"Is ha%e not utilised their powers of ta)ation and reco%ering non@ta) re%enues to the desira&le e)tent due to their pro)imity to the %oters( as also due to the fact that imposition of ta)es and reco%ery of fees for the ser%ices rendered is not o&ligatory under the "a#asthan Panchayati "a# Act?"ules$E The commission has also cited e)amples of the Su&@"egistrar and Secretary( .andi 0ommittees not implementing the le%y of surcharge on stamp duty and agriculture produces passed &y some Aila Parishads$ The Panchayati "a# Department also informed to the 0ommission that the Su&@"egistrar and the Secretary( .andi 0ommittees want instructions from their own departments in this regard$ The second SF0 calls for sorting out this anomalous situation at the state le%el with the inter%ention of the Finance Department$ The ratio of own income of the P"Is to their total income is %ery low$ The ta&le &elow gi%es the share of own income in the total re%enue of the P"Is in the state7 )able * 5$9 Share of ?wn ncome in )otal "evenue of Panchayats (:) P"Is 988:@86 9886@8V 988V@8; 988;@8P 988P@88 9888@<<

Aila Parishad :$8 9$P 9<$P 8$P :$B B$: Panchayat Samiti 9$< 9$9 9$B 9$B <$8 <$8 +ram Panchayat 6$9 V$6 6$P V$9 6$9 6$V All P"Is B$9 B$: B$6 B$V B$9 B$B Source7 Second State Finance 0ommission( "a#asthan The ma#or share in the total re%enue of the Panchayats comes from the grants from the state go%ernment$ Share of the P"IHs income from the state go%ernment is gi%en in the ta&le &elow7 )able D 5$' Share of "ecei.ts from State in )otal "evenue of Panchayats (:) P"Is 988:@86 9886@8V 988V@8; 988;@8P 988P@88 9888@<< Aila Parishad 8C$9 86$: P:$: ;;$B P8$C C6$< Panchayat Samiti V6$V V;$6 V8$6 ;<$C ;:$< P<$< +ram Panchayat 9C$B 9C$6 BB$9 98$: B;$P C:$; All P"Is 6:$: 6V$V 6P$8 6;$B VB$B V6$6 Source7 Second State Finance 0ommission( "a#asthan Fowever# for the Grama Panchayats the state share is >uite low com.ared to other levels of the .anchayats# and has shown a gradual increase during 1228*25 to 1222*9===$ As shown in the ta&le &elow( the ma#or income of +ram Panchayats has come from Dother incomeE which includes the District "ural De%elopment Agency (D"DA) programmes( including most of the 0entrally Sponsored Schemes (0SSs)$ )able D 5$8

Share of ?ther income (D"DA) in )otal "evenue of Panchayats (:) P"I 988:@86 9886@8V 988V@8; 988;@8P 988P@88 9888@<< Aila Parishad B$< B$P :$P 9B$V V$6 VB$V Panchayat Samiti CC$: C9$: B8$C BP$6 B6$9 98$9 +ram Panchayat P9$V P<$< ;B$9 ;:$V V;$9 68$P All P"Is :C$6 :9$< CP$6 :<$9 C6$; CB$C Source7 Second State Finance 0ommission( "a#asthan The trend emerging from the a&o%e ta&les shows that the share of income of all P"Is from state go%ernment has shown an increase during the period and the D"DA share has declined$ The reason for this may &e the increased resource transfer from the state to the P"Is( following the recommendations of first SF0$ F %irst State %inance Commission( ;a@or "ecommendations "a#asthan go%ernment set up its first SF0 on April BC( 988: and it presented its report on Decem&er C9( 9886$ The first SF0 was asked to make its recommendations for the period of 9886@B<<<$ Following is a summary of the ma#or recommendations7 o Share in state ta4( B$9PO of total net ta) re%enue to &e transferred to the local &odies (&oth ur&an and rural)$ For P"Is the recommended de%olution was 9$VPO$ The actual de%olution to the P"Is was less than 9$VPO e)cept

for the years 988P@88 and 9888@<<$ o ?ther Grants( The first SF0 also recommended some other grants( like maintenance grants ("s$ 6(<<< per annum to e%ery +P( "s$ 9<(<<< to e%ery PS( and "s$ B<(<<< to e%ery AP)( general purpose annual grant (to &e raised from "s$ 6 per capita to 99( for +Ps with a 9<O annual increase( from "s$ <$6< to "s$ 9$B6 for PSs( and "s$ "s$ C<(<<< per &lock for APs)( incenti%e grants for &est performing P"Is( and a start@up grant of "s$ 6(<<< to the newly created gram panchayats$ The 0ommission also recommended arranging "s$ V9$C< crore as matching grants so that the P"Is could utilise the TF0 grants$ The state go%ernment( in the action taken report( informed the second SF0 that most of the amounts recommended ha%e &een de%ol%ed to the P"Is$ o The first SF0 also recommended constitution of a Financial 0orporation for P"Is to pro%ide loans for de%elopment purposes$ The state go%ernment was re'uired to pro%ide a sum of "s$ 96 crore for this purpose$ The go%ernment accepted this recommendation &ut no action was taken in this regard$

F Second State %inance Commission The Second State Finance 0ommission was set up on .ay ;( 9888 and the 0ommission su&mitted its report in August B<<9$ The 0ommission made its recommendations for the period of B<<<@<6$ Summary of the ma#or recommendations of the 0ommission are following7 o B$B<O of the net ta) re%enue (e)cluding entertainment ta)) is to &e transferred to the local &odies$ o An incenti%e amount of <$<6O of net ta) proceeds (e)cluding entertainment ta)) to the +ram Panchayats$ o 9O of net receipts of the mineral royalty to the +ram Panchayats$ The distri&ution among the ur&an and local &odies is to &e made on the &asis of rural ur&an population (;V$VO and BC$:O respecti%ely)$ This works out to &e a pro#ected amount of "s$ 68:$V9 crore for the P"Is during the period of fi%e years$ The 0ommission has estimated the P"Is would need an additional amount of "s$ V<P crores during the fi%e year period for which the recommendations ha%e &een made( for proper discharge of their %arious functions$ So there is a gap of "s$ 9C$6V crore and the 0ommission e)pects the P"Is to raise this amount on their

own to fill the resource@gap$ (It has also suggested some incenti%es for resources mo&ilisation from the untapped sources$) The distri&ution of the amount among the %arious districts is to &e done on the &asis of criteria suggested &y the 0ommission$ The 0ommission suggested a weighted formula &ased on population (P<O)( geographical area (9<O)( po%erty( represented &y num&er of families &elow po%erty line (6O) and le%el of literacy (6O)$ For the distri&ution among the three tiers of P"Is( the 0ommission recommended that P6O of total share should go the +ram Panchayats( 9BO to the Panchayat Samitis( and CO to the Aila Parishads$ This way the total pro#ected de%olution the P"Is at the three le%els come to &e at "s$ 699$VC crores for the +Ps( "s$ VV$CP crores for the PSs and "s$ 9V$V< crores for the APs$ Some other recommendations of the second SF0 are gi%en &elow$ o The second SF0 suggested that the same criteria should also &e followed while distri&uting the grants made &y the 3le%enth Finance 0ommission (3F0) among the P"Is in the state$ o An incenti%e grant of "s$ 9B$6; crore for the panchayats is to &e deposited

with the Aila Parishads$ The release of the incenti%e amount e'ual to ta) and non ta) re%enue raised &y the +Ps from the untapped sources will &e done &y the 0hief 3)ecuti%e ,fficer of the Aila Parishad$ o The second SF0 also recommended continuation of e)isting per person general purpose grant on a regular &asis to the P"Is and the ur&an &odies( according to the B<<9 census$ o Amendment of "a#asthan Panchayati "a# Act?"ules to make reco%ery of certain ta)es and fees o&ligatory for the P"Is$ o The 0ommission also recommended that the Finance Department should lay down the procedure for reco%ery of surcharge on stamp duty and mandi ta)$ F "ecent Develo.ments The departments of the state go%ernment( following the 0hief SecretaryHs order( issued notifications( which ena&le the P"Is to perform the 9V functions (V)( transferred to them so far( more smoothly$ These orders ha%e some %ery important pro%isions7 o The D"DAs ha%e &een merged with Aila Parishads o Department of "ural De%elopment and Department of Panchayati "a# ha%e &een merged into one department$ o P"Is ha%e &een gi%en full right to use their own income$

o P"Is will ha%e rights o%er all the incomes from minor forest produces (.FPs) and fodder from forest and non forest lands$ 2owe%er( the income from the tendu lea%es will &e transferred to the P"Is &y the state go%ernment after deducting the administrati%e costs$ The a&o%e pro%isions are mentioned in the order issued &y the Department of Panchayati "a# XSl$ *o$7 F : (VV) panchra#?pc?B<<B?6V6R( dated 1une 98( B<<C( which is issued on the &asis of the report of a su& committee of ministers$ These pro%isions are %ery important for the decentralisation process$ The merger of D"DAs with Aila Parshads has &een recommended &y the second SF0 as well$ The income from the small forest produces will add the financial resources a%aila&le for the P"Is$ The second SF0 has looked into the income from .FPs and on &asis of the information pro%ided &y the Forest Department( regarding the 1oint Forest .anagement (1F.) initiati%e &y the department( recommended against the transfer of income from .FPs to the P"Is$ So its very .ositive ste. that the state government has decided to transfer the income from ;%Ps to the P" s99$ 2owe%er( the order issued &y the forest department did not mention

this and only gi%es directions to transfer the social forestry programme under the 1F. to the P"Is$ (I+IP"K"D$ B<<C) OT+12JMULD,NV/VMDJMCDLF!DNDJM?2=2, M Je ha%e seen the financial pro%isions for the panchayats in the state in the pre%ious section$ For the purpose of the &udget Analysis of the P"Is( we collected &udget documents?annual financial statements of the selected P"Is in the state$ 4udget Analysis of the selected P"Is is presented in this section$ ;ethodology Two Aila Parishads (APs)( -daipur and 1odhpur( were selected for the data collection in !erala$ Selection of the Aila Parishads (district panchayats) in "a#asthan also was &ased on the presence of the partner organisations$ Astha and their partners in -daipur and -**ATI in 1odhpur helped in identifying the panchayats and collection of data$ Two Panchayat Samitis (PSs) in each AP and two +ram Panchayats (+Ps) in each PS were selected$ The following ta&le gi%es a list of the selected panchayat &odies$ )able D 5$5 )he P" s selected for the study 4edla 4adgaon Sukher Amod

-daipur 1hadol@+ir%a .akdade% *ande !alan .andor 4anad /olawas 1odhpur /uni /uni F Data Collection 99 The right o%er the income from .FPs can raise the panchayatsH own income( howe%er( one has to also see that the tri&al communities li%ing in and around the forest ha%e &een collecting .FPs for generations and their life depends on these forest produces to a great e)tent$ This mo%e can undermine their interests$ 4oth 'uantitati%e and 'ualitati%e data ha%e &een collected$ 3fforts were made to o&tain the &udget documents of last three years from all three le%els of selected P"Is$ The heads of the P"Is and the go%ernment official assisting them were inter%iewed using a structured 'uestionnaire$ To get the peopleHs %iew focus group discussions (F+Ds) were also conducted$ F Budget Documents In "a#asthan P"Is do not prepare their annual &udget and hence we ha%e used the annual financial statements (AFSs) of the P"Is for our analysis$ Some P"Is

prepared a &udget only for the own income and the salary part of the staff employed with them$ The AFSs collected from the P"Is in "a#asthan do not ha%e similar pattern$ The -daipur Aila Parishad and Panchayat Samiti 4adgaon (-daipur) ha%e presented their accounts systematically( gi%ing the incomes and e)penditures ma#or head wise$ -nder e%ery ma#or head there are %arious su&heads (or items) for which num&ers are gi%en few$ 2owe%er( the Aila Parishad 1odhpur and Panchayat Samitis 1hadol (-daipur) and .andor (1odhpur) present the incomes and e)penditures su&@head wise and the su&@ heads are not grouped ma#or head wise as systematically as in the earlier case$ At +ram Panchayat le%el( we ha%e AFSs of only two +Ps7 *anda !alan and 4anad from .andor Panchayat Samiti of 1odhpur Aila Parishad$ The accounts of +P are presented programme wise e$g$ S1+"=( IA= etc$ and name of the actual pro#ects (road( school &uilding ect$) are mentioned under the programme$ At AP and PS le%el for e%ery item fi%e entries are gi%en7 9$ opening &alance( B$ income( during the year( C$ total income( :$ e)penditure( during the year and 6$ &alance$ It should &e

noticed that in many cases P"Is do not spend the money during the year of sanction and it is spent the ne)t year$ That is why it is helpful for the P"Is to present their income and e)penditure in this manner$ 2owe%er( for the purpose of our analysis( we ha%e taken only the income and e)penditure during the year of analysis$ ULD,NV/VM"IM(LF"P2MDL+M(XS2L+/JT-2M"IMV2 ,2FJ2+MC6(V M F \/,DMCD-/V!D+M Income from %arious sources and e)penditure pattern of the Aila Parishads -daipur and 1odhpur are presented in this section$ o Eila Parishad# /dai.ur The AFSs of the Aila Parishad -daipur are presented in %ery systematic manner( showing income and e)penditure under each .a#or 2ead$ The details of income and e)penditure under each .a#or 2ead or category are also shown$ 2ere we analyse the income and e)penditure of the AP during the last three years$ WM ncome Analysis The following ta&le presents income of -daipur AP from %arious sources during the last three years7 )able D 5$6 Eila Parishad /dai.ur ncome from Different Sources (in "s$ 1===)

B<<B@<C B<<9@<B B<<<@<9 Item?.a#or 2ead "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total Income from State +o%t$ BB<B +eneral 3ducation ;;<:$C C$;8 P9CB :$V 9B:CV$: 8$B BB96 "ural De%elopment 9C9:CB$6 V:$VP 9B8<V<$6 ;C$9 VPBPC$B 6<$: BB9V 2ousing CC;<$9 9$VV P:9$; <$6 B;99$C B BB9< Ayur%eda 9;V;; 9C$9 Schemes Transferred from D"DA ::V99$8 B9$86 CC:P<$B 98 B8C8B$: B9$; )otal Grant 13&113$3 29$=3 1&1518$8 2&$9 1'=5==$9 26$8 /oan( Ad%ances etc$ /oan 96;VC$B ;$;V :<V9$: B$C :9C<$C C$9 Ad%ance 9:B$9 <$<; B9B$8 <$9 CCP$8 <$C ?wn ncome 131$9 =$=2 &18$1 =$8 8'6$3 =$' Grand )otal 9='9=5$9 1== 1&65=9$3 1== 1'58=6$9 1== During B<<<@<9 to B<<B@<C the income of AP has increased su&stantially due to the increase in the grants recei%ed( which make the ma#or share of its total

income$ This has seen an almost 9$6 times increase during the period$ .a#or head "ural De%elopment (BB96) and the schemes transferred from the D"DA recei%e a ma#or share of the grants$ The share of 3ducation has declined from 8$BO in B<<<@<9 to C$;8O in B<<B@<C$ Share of own income in APHs total income is less than <$6O and ha%e declined during the period$ APHs own income declined in a&solute terms as well during the period and came down to less than <$9O of its total income during B<<B@<C$ Aila ParishadHs own income is %ery low$ The ta&le (6$;) &elow shows the total own income of the AP$ The AP has no income from any kind of ta)$ The main source of APHs own income is the interest earned &y it on its Personal Deposit account$ )able D 5$& EPs ?wn ncome (in "s$ 1===) 9==9*=' 9==1*=9 9===*=1 "s$ 1=== Percent to )otal "s$ 1=== Percent to )otal "s$ 1=== Percent to )otal ?wn ncome 131$9 &18$1 8'6$3 Auction B9$;:V 6

-*I03F V9$886 9:$B *utrition@ transport 99P$;<6 B;$9; Ad%ance for %ehicle ::<$9 V9$V Interest 9;8$::B 88 B:;$C C:$V 9P:$869 :B$C6 -nder the ad%ances and loans( the ma#or income comes from PPF (pu&lic pro%ident fund)( insurance deposit( *ational *utrition Programme( 4alika Samridhi =o#na( Annpurna =o#na etc$ WM+4.enditure Pattern /ets ha%e a look at the e)penditure pattern of the AP$ The following ta&le presents the e)penditure incurred on %arious items &y the AP$ )able D 5$3 Eila Parishad /dai.ur +4.enditure Pattern (in "s$ 1===) B<<B@<C B<<9@<B B<<<@<9 1$ ncome from State Govt$ "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total

BB<B@+eneral 3ducation ;;<6$<VP C$C< 8BV<$:B6 9C$;: 9C:VC$86 9:$88 B696@"ural De%elopment 9;;9B;$;P ;6$8< 9C6<<$<C B<$<C 998B; 9C$BP BB9V@2ousing B66<$VV8 9$<8 9;<8$B B$6: P;C6$9VP 8$;B BP9<@*oncon%entional energy 9C< <$98 9<;$:8V <$9B ::<B 3ducation sports and culture B:6$BVP <$B; BB9<@Ayur%eda 9VBB$<PC <$;< 9V<6:$8B 9;$P; D"DA Schemes C:6V<$<P 9:$P9 CV9:;$6C 6C$V: CCVP6$96 C;$6< 9$ Coan# Advance etc 9$ /oan 8CC6$P;V :$<< 66P6$9<8 P$B8 :::B$P86 :$86 B$ Ad%ance 99V$<6 <$<6 9VB <$B: 9P<$68P <$B< '$ ?wn ncome C:<$9C: <$96 P89$<:; 9$CB 8PB$96: 9$<8 Total BCCC6;$;: 9<<$<< V;CP6$C: 9<<$<< P8PB:$68 9<<$<< .ost of the e)penditure &y the AP has &een made under the ma#or heads for which it has recei%ed grants like "ural De%elopment and the D"DA schemes$ The e)penditure on education declined during the period and most of the e)penditure has &een made under salary for teachers and honorarium to the instructors$ -nder the "ural De%elopment and the D"DA schemes most of the e)penditure is made on construction works$ Following ta&les gi%e details of e)penditure under "ural De%elopment and D"DA schemes$ )able D 5$3

9515 * "ural Develo.ment# +4.enditure Pattern (in "s$ 1===) B<<B@<C B<<9@<B B<<<@<9 Items "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total 9 Salary 9PBV$V 9$< 9;6C$9 9C$< B<9;$< 9V$8 B TA :C$C <$< :B$8 <$C 6<$8 <$: C .edical C;$: <$< ::$P <$C B;$< <$B : ,ther C<B$8 <$B 8B$V <$; 6 PramukhQs 2on B6:$6 <$9 :P <$: CP$8 <$C V Aila Parishad 4ld$ 0onstruction 6V$C <$< P$C <$9 ; Aila Parishad maintnence V6 <$6 P Award for &est work to PS B;<< B<$< 8P Award for &est work to AP B<<< 9:$P 9< Award for &est work to +Ps ;<< 6$B 99 *utrition (mid day meal) :96;V$; BC$6 686< ::$9 9B Amount allocated to AP 9V:$C <$9 86$C <$; :<B$B C$: 9C TF0 amount 8C89$< ;P$;

9: 3F0 amount P<:;8$P :6$: 96 SF0 amount 6BCPV B8$V Total 9;;9B;$;P 9<<$< 9C6<<$< 9<<$< 998B;$< 9<<$< As the a&o%e ta&le (6$P) shows( %ery small share of the e)penditure under B696 "ural De%elopment is incurred on salary and allowances (the first 6 items)$ During the year B<<<@<9( e)penditure of "s$ 8C89(<<< was made from the grants recei%ed under TF0 recommendations$ 2owe%er( on this( no further detail is a%aila&le$ In the year B<<B@<C( e)penditure was made from the incomes recei%ed under 3F0 and SF0 grants$ Jhile in B<<9@<B no amount was spent under any of the grants$ The Annual Progress "eport &y the Aila Parishad for the year B<<B@ <C pro%ides information stating that "s$ P<:$P lakhs (as shown in the ta&le) from the total 3F0 grant recei%ed &y the AP during the last three years ha%e &een distri&uted among the +ram Panchayats in the district according the population$ From the grants recei%ed under SF0 recommendations( "s$ 6BP$PV lakhs has &een distri&uted among the +ram Panchayats in the district$ The report also states that the amount recei%ed under &oth 3F0 and SF0 grant ha%e &een do%etailed with drought relief work$ )able D 5$2

Schemes )ransferred from D"DA# +4.enditure Pattern (in "s$ 1===) B<<B@<C B<<9@<B B<<<@<9 Items "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total 4attis Aila 4attis !aam PB; B$C BVB8$< ;$P -ntied fund V;9$;:C 9$8 B89$8 <$8 "ural +rowth 0entre Scheme CVB 9$< Vanprastha =o#na 8P$P <$C "a#i% +andhi Traditional Drinking Jater Source 9VCBV$C :;$B 9B:89$; C:$V VP;<$9 B<$: 4onded "eha&ilitation ; <$< 4io@gas scheme BV< <$P 9:;$9 <$: Apna +aon Apna kaam ;<B 9$8 B;:<$C P$9 3+S B<PBV$< 6;$V VP9;$9 B<$B S+"= B<O 9;8C9$8 69$8 ./A Fund C:$P <$9 BV;$9 <$; 9:<8<$8 :9$P Total C:6V<$9 9<<$< CV9:;$6 9<<$< CCVP6$9 9<<$< -nder the D"DA schemes the ma#or e)penditure has &een made under "a#i% +andhi Traditional Drinking Jater Source$ Its share in total D"DA schemes was B<O in B<<<@<9( which increased to :;O during B<<B@<C$ According the Annual

Progress "eport ma#or e)penditure has &een on deepening of pu&lic wells in the %illages$ 3mployment +rantee Scheme (3+S) accounts for 6;$VO of total e)penditure during B<<9@<B$ In B<<<@<9 ./A fund accounted for a&out :9$PO of total e)penditure$ The ma#or e)penditure from the own income sources has &een made on office e)penditure( tra%el allowance to Aila Parishad mem&ers( repairing of &uilding( phone( audit fee( refreshment etc$ ,ther ma#or e)penses are repayment of ad%ance taken for %ehicle( conducting e)ams for the recruitment of +ram Se%aks( writ petition etc$ o Eila Parishad# Godh.ur The ta&le &elow gi%es details of income and e)penditure incurred &y Aila Parishad 1odhpur during the year B<<B@<C$ The Aila Parishad 1odhpur financial statement is not as systematically arranged as of the -daipurHs$ Different sources of income and items of e)penditure ha%e &een grouped in accordance with the AFSs of Aila Parishad -daipur and presented in the ta&le &elow$ )able D 5$1= Eila Parishad# Godh.ur# ncome and +4.enditure 9==9* =' (in "s$ 1===) Item Income

Percent to Total 3)penditure Percent to Total B696 salary 9;<< 9$9; 9;6C$8B <$8 B696 off e)p ;V6 <$6C 8C$8P <$9 B696 TA 8; <$<; C<$VP <$< B696 .edical ;6 <$<6 6$6V <$< B696 PramukhQs hon CV <$<B CV <$< B696 ,ther "ur De% 3F0 B;PB9 98$9B VV6PC$CV C6$P B696 ,ther "ur De% SF0@II CVC<< B:$8: :B<:<$9C BB$V SF0@II ;:C$PB <$: *ational *utrition CP88: BV$;8 C;986$B9 B<$< Apna +aon Apna !am :VV$:B <$C "a#i% +andhi Traditional water sources ;CP;$99 6$<P VB;:$BP C$: &attis >ila &attis kam 66<C$VP C$;P C6<<$V 9$8 -ntied 9P9B$BP 9$B6 :8V<$V B$; 4onded la&our reha&ilitation < <$<< 9B$B <$< S+"= B<O 9BP;;$P P$P6 9BP;6$6C V$8 +ram se%ak prashikshan kendra mandor 96<< 9$<C 96<< <$P *ational nutrition < < 9$6; <$< BB9V 2-D0, (1anta Awas) 9;;V$P< 9$< Pari%arik /a&h *F4S BPB: 9$8: 9V:6 <$8 .atrit%a /a&h (maternity &enefit) :6< <$C9 :;< <$C ,ld age pension VBP <$:C 9VC6$;9 <$8 Interest on amount ::$P; <$<C 4alika Samridhi =o#na P:P$C8 <$6 ,peration &lack &oard C$BC <$< ,wn income 9:P$C; <$9< 98:$CC <$9

BB<B +3 &alance amount 698;$V6 C$6; PCCP PD account deposit 9CPB$:B <$86 9CPB$:B <$; 9:66::$9P 9<< 9PV<B8$;6 9<<$< )he ma@or income has come from grants .rovided to the Eila Parishad under S%C and +%C recommendations and for National Nutrition Programme (mid day meal)$ And most of the e4.enditure has also been incurred towards these .rogrammes only$ As we ha%e seen in case of -daipur the income from SF0 and 3F0 has &een made on "ural De%elopment programmes$ APs own income is #ust <$9O during &oth the years$ 3ducation has not &een mentioned e)cept for the ,peration 4lack 4oard$ F CDLF!DNDJMVDP/J/V Panchayat Samitis( at &lock le%el( are middle le%el panchayat &odies &etween +ram Panchayat at %illage le%el and Aila Parishads at district le%el$ In "a#asthan( Panchayat Samitis are nodal agencies( identified for rural de%elopment programmes assigned to P"Is$ As go%ernment agencies PSs are looking after the distri&ution of funds to the +ram Panchayats for de%elopmental acti%ities$ In this section we look into the income sources and the e)penditure pattern of three Panchayat Samitis7 4adgaon and 1hadol@+ir%a (-daipur) and 1odhpur .andor

(1odhpur)$ o Panchayat Samiti Badgaon (/dai.ur) The data on income and e)penditure of 4adgaon PS for the years B<<B@<C and B<<9@<B is presented in the Ta&le 6$9; gi%en in the end of the chapter$ Coo-ing at Badgaon Panchayat Samiti0s annual financial statement (A%S)# it is seen that ma@or income sources for the PS are grants received from the government and the D"DA schemes# which include centrally s.onsored schemes (CSSs) li-e G"H# SGSH# AH# SG"H etc$ and schemes li-e ;PCADS and ;CA funds as well$ Total income of PS has declined in B<<B@<C compared to the earlier year$ This may &e attri&uted to no receipt at all under ma#or head BB<B 3ducation( decline in money for BB96@ Drinking water and for D"DA programmes$ "ural De%elopment (B696) contri&uted half the income in B<<B@<C and #ust 96O in B<<9@<B( possi&ly due to increased grant under 3F0 recommendation in B<<B@ <C( which was not there in B<<9@<B$ Share of own income in the total income of PS is %ery low 9$CO in B<<B@<C and <$BO in B<<9@<B$ In a&solute term( the own income has increased a&out fi%e times from "s$ V9$9 thousand in B<<B@<C to "s$

B8C$6 thousand in the pre%ious year$ The following ta&le gi%es details of PSH own income7 )able D 5$11 Sources of own income of Panchayat Samiti# Badgaon (in "s$ 1===) B<<B@<C B<<9@<B 0ess on education B<$:B Income from property (shop@rent) 99$B6 C$:< 4one contract B<<9@<B 9B$6< 9< Pond lease B$P6 Interest on deposits 9$P B$P6 4one contract B<<B@<C B$6 C< Permanent amant B98$B; ,ther B6$P 99$8V Total B8C$66 V9$<; The increase in the own income in B<<B@<C is due to the increase in income under permanent amanat$ Income from other source has not shown any increase( e)cept for the income from &one contract( which increased from "s$ B(6<< to "s$ C<(<<<$ /ooking at e)penditure part( a little less than one@fifth of total e)penditure has

gone towards education in &oth the years$ It important to note that primary education (up to class fifth) is with the Panchayat Samitis since 9868$ After the ;Crd Amendment Act primary education up to class VIII has &een( along with 96 other su&#ects( has &een transferred to the PSs$ The PSs ha%e also &een collecting an education cess( which is part of their own income$ The &reak up of this e)penditure is pro%ided in the AFSs shows( in B<<9@<B and B<<B@<C also most of the money is spent on salary and allowances part e)cept a small amount$ 4ut( most of the e)penditure under "ural De%elopment (B696) has gone construction works( and %ery less is spent on salary$ Another important point is( in &oth the years a good amount of grant recei%ed &y the PS is for +ram Panchayats( which it must ha%e transferred to their account$ -nder the Gprogrammes from Aila ParishadH the ma#or e)penditure in B<<B@<C has &een made on mid day meal$ o Panchayat Samiti Ghadol*%alasia (/dai.ur) The annual financial statement of 1hadol@Falasia PS is not presented in any systematic manner$ Je ha%e taken the items under which the PS has recei%ed

any income or on which it has made e)penditure during the year B<<B@<C and ha%e grouped them according to the grouping done in the AFSs of 4adgaon PS$ The data on income and e)penditure in B<<B@<C is presented in the ta&le (6$9P) in the end of this chapter$ .ost of the income of the PS has come from the grants recommended &y the 3F0 and SF0$ These grants contri&ute CBO of total PS income$ .oney recei%ed for mid day meal under *ational *utrition Programme is also a ma#or contri&ution to PSHs income$ Income under ma#or head BB<B 3ducation makes 96$PO of total income$ Share of PSHs own income is merely 9$:O( for which no details are a%aila&le$ /ooking at the e)penditure side( its %ery surprising that on education the PS spent #ust "s$ P$9: thousand that also only on tra%el allowance$ .a#or e)penses were made from the grants recei%ed under 3F0 recommendations (9V$6O)$ It should &e noted that the 3F0 grant could &e spent on fi%e &asic ser%ices identified &y the 3F0$ 3)penditure from the salary component under the SF0 grant was a&out 9BO of total e)penditure$ The mid day meal scheme was gi%en

9B$;O of total PSHs e)penditure during the year$ ,ther ma#or e)penditures were made on .P/ADS (:$;O)( ./A/ADS (V$;O)( Jater Supply (:$;O) etc$ o Panchayat Samiti Godh.ur ;andor (Godh.ur) In the AFS B<<B@<C of PS 1odhpur( the grouping of the income sources and e)penditure pattern is done systematically &ut it is a &it different from the 4adgaon PS$ Ta&le 6$98 in the end of the chapter presents the income and e)penditure of the PF for the year B<<B@<C$ )he ma@or income sources for the Panchayat Samiti are again the grants received as +%C and S%Cs recommendations# forming one third of total income$ *ational *utrition Programme (mid day meal) contri&utes the most among centrally sponsored programmes$ ,ther 0SSs like S+"=( 1"=( P.+= also contri&ute to the PSHs income$ PSHs own income is merely 9$9O of its total income$ A &reak@up of own income of the PS are gi%en &elow7 )able D 5$19 Sources of PS0s ?wn ncome# 9==9*=' (in "s$ 1===) Source?item "s$ 9<<< Percent to Total *o o&#ection certificate 9$VP <$68 "ent 9C$C :$V6 4one contract 6< 9;$:8 Ag$ Ta) V$:6 B$BV

Duplicate card fee <$99 <$<: 4ank interest :6$;C 9V CV<:@land re%enue grant 9V;$P8 6P$;: Jomen Panch training <$9: <$<6 4idding fee <$6 <$9; Total BP6$P 9<< ts im.ortant that about 6=: of PS0s own income has come from its share in the land revenue collected by the state government$ Giving the right to collect the bones of dead animals in the Panchayat Samiti area is also a significant source of income$ The PS has also imposed some kind of agriculture ta)$ 4ut surprisingly it has not collected the education cess like other Panchayat Samitis in the state$ /ooking at e)penditure side of the PS 1odhpur .andor( ma#or e)penditure has &een made on non@plan salary under ma#or head B696( and from the grants recei%ed under 3F0 and SF0 recommendations$ *ational *utrition Programme (P$VO) and non@formal education (8O) ha%e also taken significant share of the total e)penditure$ The high e)penditure on non@formal education might &e a result of the pro#ects like /ok 1um&ish( and Shiksha !armi and DPIP( which ha%e &een introduced in the state$ 0SSs like S+"=( 1"=( IA= and P.+= ha%e also

&een gi%en share in the PSHs e)penditure$ The e)penditure from the own income of the PS has mostly gone on office e)pences( telephone( tra%el allowances to the PS mem&ers( repairing( %ehicle( ad%ertising for contracts and &ids( legal fee etc$ F Z-DPMCDLF!DNDJV Je ha%e data for two +ram Panchayats7 4anad and *adra !alan( &oth from the Panchayat Samiti 1odhpur .andor( in the 1odhpur district( for three consecuti%e years B<<<@<9 to B<<B@<C$ 4ellow we ha%e analysed the income sources and e)penditure pattern of &oth the panchayats$ o Gram Panchayat Banad# Godh.ur ;andor (Godh.ur) The following ta&le presents the income of the panchayat from different sources7 )able D 5$1' Gram Panchayat Banad# ncome (in "s$ 1===) B<<B@<C B<<9@<B B<<<@<9 Items "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total +rant( 0SSs etc$ BC6P$B; 8V$;V B9B6$<P 8P$V8 P:8$CB 88$VB ?wn ncome "eco%ery <$:<;

Photo copy <$BV "ent from shops C$:;6 <$9: B$; <$9C B$6B6 3ducation cess <$<;6 App fee <$<V <$<< 4ank interest B$9:V <$<8 9$6C <$<; 2ouse &uilding permission B$8P <$9B <$B <$<9 4id form fee <$: <$<B <$P6 <$<: Dharohar rashi 9B <$:8 /and re%enue grant 6;$8C B$CP BB$;; 9$<V Total@,wn Income ;P$8C C$B: BP$99 9$C9 C$BV <$CP )otal B:C;$B 9<<$<< B96C$98 9<<$<< P6B$6P 9<<$<< As can &e seen in the ta&le most of the income of the panchayat comes from grant and other fund transferred from the go%ernment$ Panchayats own income is %ery low( &ut has shown an increasing trend$ It has increased from #ust <$: O in B<<<@<9 to 9$CO in B<<9@<B and C$B:O in B<<B@<C$ The increase can largely &e attri&uted to the income from the share in go%ernment ta)es (shown as share in land re%enue in the AFSs of the panchayat)$9B *ow lets take a look at the e)penditure pattern of the +P$ The e)penditure are shown in as actual pro#ects?works in the AFS$ For the purpose of analysis( %arious e)penditure are categorised under three heads7 de%elopment work( office e)penditure and honorarium( salary etc$ (ta&le 6$9:)$ )able D 5$18

Gram Panchayat Banad# +4.enditure Pattern (in "s$ 1===) Item B<<B@<C B<<9@<B B<<<@<9 "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total De%elopment Jork BC6;$;9 8P$86 BB<6$:6 8P$C8 ;C<$; 8:$6; ,ffice( 3sta&lishment 2onorarium etc$ B6$98 9$<V CV 9$V9 :9$8C 6$:C Total BCPB$8 9<<$<9 BB:9$:6 9<<$<< ;;B$VC 9<<$<< 9B 2owe%er( it should &e noted that in the AFSs of the higher le%els P"Is( presented a&o%e this income is not shown as own income$ In the panchayatHs AFS any classification of income has not &een made$ Jhile doing the classification we thought it appropriate to put this income into Down incomeH category$ /ooking the e)penditure side( most of the e)penditure of the panchayat has gone towards the de%elopment acti%ities$ .ost of the de%elopment e)penditure is made on construction work like roads( &ridges( schools etc$ Some e)penditure is also made on indi%idual assistance e$g$ house under IA= etc$ The share of office

e)penses( honerarium etc$ has &een less than BO during B<<B@<C$ 2owe%er( it was 6$:O in B<<<@<9 (ta&le &elow)$ o Nandra 7alan# Godh.ur ;andor (Godh.ur) The following ta&le presents income of the panchayat from %arious sources$ The income for year B<<B@<C is also presented as %arious grant?programme wise$ The programmes include &oth centrally sponsored schemes and the state go%ernment programme (apna gaon apna kaam( A+A!)$ )able D 5$15 Nandra 7alan ;andor ncome Sources (in "s$ 1===) B<<B@<C B<<9@<B "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total 3F0 P:$<6 9B$V6 SF0@II 86$89 9:$:: TF0 9C$6; B$<: A+A! 9B< 9P$<; "+TJS B6 C$;V S+"= 6<$6; ;$V9 **P 996$VC 9;$:9 IA= ;< 9<$6: )otal D Govt$ grants etc$ 5&8$&' 36$5' &32$5& 28$99 "eco%ery <$8: "esidential land sell <$9 0ourt and inspection <$<V

Income ta) C$C8 4ank interest B$VCV B$8< 2ouse &uilding permission 9;$P 9P$: 4id form fee <$<V <$6C Dharohar rashi 8 /and re%enue grant 6P$89 BC$9V )otal ?wn ncome 32$86 1'$8& 83$8' 5$&3 G$ )otal 668$13 1== 3'3$== 1== /ike 4anad panchayat( this panchayat also recei%es most of its income in form of go%ernment grants$ 4ut the share of own income for this panchayat is 'uite high in B<<B@<C (ta&le 6$96)$ )he .anchayat received 1'$5: from its own sources this year$ During the .revious year also the share was >uite high at 5$&3:$ )he ma@or share in this has been of the income from the share in revenue$ For the year B<<B@<C we also ha%e &reak up according the %arious types of grants and for the different schemes?programmes of the central and state go%ernment$ The grants recei%ed &y the panchayat under 3F0 (9B$V6O)( SF0@II (9:$::O) and TF0 (B$<:O) recommended grants make B8$9CO of the panchayatHs income$ The share of 0SSs (which include S+"=( IA=( **P and "+TJS) makes for C8$CBO and state go%ernment scheme called apna gaon apna kaam (A+A!) 9P$<;O$

)able D 5$16 Nandra 7alan ;andor +4.enditure Pattern (in "s$ 1===) B<<B@<C B<<9@<B "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total 3)penditure De%elopment Jork V6V$6 8C$96 9PC8$8; 8V$6B ,ffice e)p$ 3sta&lishment etc$ :P$C9 V$P6 VV$6B C$:P Total ;<:$P9 9<< 98<V$:8 9<< /ooking at the e)penditure side( this panchayat has also spent most of its income on the de%elopment work$ The share of office e)penditure etc$ was less than :O during B<<9@<B( which increased to V$P6O in B<<B@<C (ta&le 6$9V)$ UFF"TLJVMDL+MUT+/J/L1M The "a#asthan Panchayati "a# Act 988: contains the pro%isions related to accounts and audits of P"Is in the section ;6 of the Act$ In the rules framed &y the state go%ernment under Panchayati "a# act( rules B:6 to B6B relates to accounts and audit of P"Is$ According to the "a#asthan Panchayati "a# Act?"ules the P"Is should prepare a 'uarterly statement of account of income

and e)penditure in a prescri&ed form (*o$ TTTV)$ And send it to the ne)t higher authority$ At the end of the year( the +Ps and PSs are re'uired to prepare an a&stract of the accounts in form TTTVI( showing income and e)penditure under each head of the &udget and send it to the state go%ernment and the Aila Parishad &y the first of .ay e%ery year$ This should &e accompanied &y a statement of grant@in@aid recei%ed from the state go%ernment( supported &y the utilisation certificate$ 3ach Panchayat Samiti is also re'uired to su&mit a statement of loans and amount outstanding in a prescri&ed form$ Aila Parishads are also re'uired to su&mit an annual statement of income and e)penditure and send it to the state go%ernment &y 96th of .ay$ The audit of the accounts of P"Is are go%erned &y the "a#asthan /ocal Fund Audit Act( 986:$ A test audit of account may also &e carried out on &ehalf of the 0KA+( according the Panchayati "a# Act$ P"Is should prepare the financial statement prescri&ed &y the "a#asthan /ocal Fund Audit "ules and should make arrangements for the audits$ The auditors (Director( /ocal Fund Audit) send a

copy of the audit report to the P"I and to the concerned immediate higher le%el P"I as well$ Though there are detailed pro%isions related to accounts and audits of the P"Is( they do not seem to &e implementing the same$ Annul Financial Statements are prepared &y the P"Is in different ways$ The accountants in PS and AP offices did not ha%e any idea a&out any prescri&ed forms$ There is no similarity in the AFSs prepared &y the P"Is$ 2owe%er( the financial statements prepared &y Aila Parishad -daipur( Panchayat Samiti 4adgaon and Panchayat samiti .andor were 'uite systematic gi%ing accounts of grants( loans and ad%ances( and own income on separate sheets$ At +P le%el the secretary (+ram Se%ak) is the only staff$ 2e (all of them are men) maintains the accounts and prepares the financial statements( which they call GgoshwaraH$ These are prepared only on the panchayat register$ At GP level two se.arate statements D one for SG"H accounts and the other for all other income and e4.enditure D are .re.ared$ The only prescri&ed format we could see was a &udget performa for the +Ps (Appendi) T)( which is rarely used$ .ost of the secretaries said they do not use

it$ It is used to prepare &udget only in one panchayat( Amod( &ut the secretary was not ready to gi%e us the copies of the same$ The account staff at PS and AP le%els generally said that there was no guideline for preparing the accounts$ The accountant in 1hadol@ Falasia PS office told that a &ooklet on accounting was sent &y the go%ernment sometime ago( &ut was unaware where it was now$ As discussed earlier( there is no uniformity in the A%Ss .re.ared by the P" s$ ;a@or Fead 9515 (which is the code for I?ther "ural Develo.ment .rogrammes0) is ?ther "ural Develo.ment in some statements# and CD (community develo.mentJ) in some other$ 0ommunity De%elopment is one minor head (9<B) under this ma#or head according to the list$ Item 4attis Aila 4attis !aam (4A4!) is shown in Gprogrammes from Aila ParishadH in the satement of 4adgaon PS and under the GD"DA programmesH in 1odhpur@.ondor PS$ In the 1odgpur@.andor PSH statement some items are shown under Gfrom +ram PanchayatH which include SF0( 3F0 grants( and all the centrally sponsored schemes$ .ost of these items are shown under Gfrom D"DAH in the PS 1hadol@ Falasiya statement$

Auditing is done by C%AD every year and AG audit is also conducted once in two years$ !e met the C%AD officer at /dai.ur# who told that auditing of the accounts was done according to the Cocal %und Audit Act$ )hey have audit teams# which visit the P" s and .re.re audit re.orts$ The elected representati%es and the go%ernment employees also told a&out GSocial AuditH &y the gram sa&ha$ The accounts of the +Ps must &e discussed in and appro%ed &y the gram sa&ha$ 2owe%er( this e)ercise is #ust a formality$ The men and women we talked in the %illages generally knew only one thing a&out the gram sa&has that they can gi%e proposals (prasta%) for de%elopment work and can suggest the name of the &eneficiaries of for the programmes like IA=$ C,DLL/L1 The P"Is in "a#asthan do not prepare any plan as such$ The proposals gathered in the gram sa&has and ward sa&has are put together &y the sarpanch and secretary (panchayat mem&ers also gi%e suggestions) and sent to the PS$ An action plan is prepared at all le%el of P"Is for the work to &e done under the S+"= programme (the +P7SP7AP ratio in this programme is 6<O7C<O7B<O)$

The +Ps gi%e a list of works to &e done under this programme( worth 9B6O of the last yearHs e)penditure( and send it to the PS for Gappro%alH$ Je ha%e copy of the S+"=@6<O action plan prepared &y +P Sapetiya for the years B<<C@<: and B<<B@<C$ Fi%e works ha%e &een proposed &oth the year and estimated cost is also gi%en for each work$ The estimated work also includes la&our contri&ution &y the community in the works proposed in B<<C@<:$ For other grants( the work from the proposals gathered in the gram sa&has are done after the appro%al of the PS$ Secretary in one of the +Ps told that for the money recei%ed under 3F0 and SF0 also we need appro%al from PS and sometime the leaders (mem&ers) in the PS and AP may influence the decision regarding which work to &e done where$ A&out IA=( the &eneficiaries are generally decided &y the +P according to the proposals in gram sa&has$ )he District Planning Committees (DPCs) are constituted in "a@sthan$ )he Eila Parisahd Pramu-h is chair.erson of the DPC and District Planning ?fficer is secretary of the DPC$ !e met DP?s in both the districts$ A su&ordinate of the DP, in 1odhpur district told a&out the work done &y the district

panning office$ It prepares a plan document for the district e%ery year gi%ing department wise plan and non@plan e)penditure &ased on the estimates pro%ided &y the line departments in the district$ This is prepared e%ery year and generally it is ready &y the end of the year (in the month of Decem&er it was &eing prepared for the current year B<<C@<:)$ The estimates are made &y increasing the last yearHs e)penditure &y 9<@96O as the instruction may &e$ The DP0 appro%es this plan document$ But what about the .lan to be .re.ared by the P" s# which should be consolidated by the DPCJ )he .erson in the district .anning office had no idea$ The DP, in -daipur district was aware of the concept &ut said this is not happening$ 2e said he was a mem&er of a committee appointed &y the state go%ernment to look into the decentralised planning$ This committee has gi%en its report to the go%ernment and he was hopeful that this should start soon$ C2"S,2[VMC2-F2SJ/"LM To understand the peopleHs %iew a&out the whole process of decentralisation and the panchayat finances we conducted inter%iews with elected representati%es

(generally the president of the panchayat and also some mem&ers in few cases) and the staff (generally panchayat secretary or( in some cases( clerks) with a kind of semi structured schedule$ Also focus group discussions were organised with %illage people in two panchayats$ A summary of what was gathered is presented &elow7 F +lected "e.resentatives and Panchayat Staff( ;ost of the elected re.resentatives were vaguely aware of the .rovisions related to the budget and finance and .lanning$ They had no detailed or minute knowledge$ +enerally the sarpanchs( pradhans and pramukhs( were aware that &udget (for own income and staff@salary and allowances only) is to &e prepared and financial statements should &e made and sent to the immediate higher P"Is$ Accounts are maintained through the cash register$ The core work in this regard is done &y the secretary at +P le%el and account staff at PS and AP le%els$ Auditing is done &y /FAD$ 4esides there is A+ audit and GSocial AuditH at +P le%el$ A&out the .lanning( action plan for S+"= is prepared from the proposals

recei%ed in the gram sa&has at +P le%el$ At PS le%el also the action plan is prepared for S+"= (C<O) from the proposals recei%ed from all the +Ps$ .ost of the elected representati%es and go%ernment employees at PS and AP le%el were aware of the DP0 &ut at +P le%el awareness was 'uite low$ A&out SF0 and 3F0 they said that we recei%e SF0 and 3F0 grants$ The awareness level of sar.anchs in the two districts was e%en lower$ For all finance( accounts and &udget related matters they would refer to their secretaries$ Jomen sarpanchs were e%en less aware and less acti%e( represented &y their hus&and$ In one case (in 1odhpur) we could not meet the sarpanch$ 2er hus&and was introduced as sarpanch$ The other lady( in -daipur( was a literate young woman &ut here also the hus&and was the one who took decisions$ /dai.ur Eila .ramu-h e4.ressed his unha..iness about the decalaring 92 GPs as )SP GPs$ Fe said some of them have no tribal .o.ulation$ Eila .ramu-h also felt that ;CAs and ;Ps do not want P" leaders to get em.owered$ Fe said unless fund and functionary comes with the function#

P" s could not wor- well$ A num&er of staff is now under P"Is$ 2e said the &ureaucrats transfer the staff from district offices or D"DA to AP without consulting us$ 2e also feels that &ureaucrats do not listen to the elected representati%es of the P"Is$ Fe also seemed to be unha..y with the P" s re.resentatives$ According to him# earlier they were closer to .eo.le$ Now# as a lot of money has come to .anchayats# they have gone far from .eo.le$ F Common Peo.le( %indings of %GDs The focus group discussions were conducted in .akrade% (1hadol( -daipur) (with 96 women and : men)( Amod (1hadol( -daipur) (P men) and /olawas (/uni( 1odhpur) (9B men)$ In .akarade%( we met the women in the Adi%asi .ahila 1agriti Samiti (an organisation of local tri&al women) office$ These women were from different %illages of .akrade% +P$ ,ne woman among them was a mem&er of PS 1hadol$ ,ne worker from Astha (-daipur) was also with us$ o Partici.ation in Gram Sabha and the issues raised The women in the .akrade% meeting said that they participate in the gram sa&has and ward sa&has$ 2owe%er( none of the men participants had e%er

attended any ward sa&ha or gram sa&ha$ They said that they .ut their .ro.osals ( .rastava) in the ward sa&ha and gram sa&ha$ "oads( water (deepening of wells( &oth personal and pu&lic)( house( etc$ are the issues raised &y the women in the ward sa&has and gram sa&has$ But the general feeling was that .ro.osals are not .assed$ ?ne woman told that si4 times she has as-ed for a house# but has not got yet$ n one of the villages# there is an aganwadi -endra# but no building for the same$ They said they asked for it in the gram sa&has and ward sa&has many times$ 4ut it has not made yet$ ,n asking a&out the work done &y the panchayat( they said two works( one road and another water related work are completed$ They do not discuss anything a&out &udget or planning in the gram sa&ha or ward sa&ha$ *either the accounts of the panchayat are presented in the gram sa&ha( according to them$ ,ne woman told that they do &ring the registers &ut do not read it out$ Jomen also said that they are not a&le to go to all the ward sa&has and gram sa&has$ They often do not get information a&out the same$ The PS mem&er participating in the meeting was a tri&al woman and an acti%ist of

A.1S$ She also said that in the PS general meetings also the &udget and finances are rarely discussed$ About what should be the .riority areas for .anchayats# water (both drin-ing and for irrigation)# house and em.loyment were the main concerns for these women$ The participants in Amod meeting also e)pressed the same %iews$ Interestingly most of the participants of the Amod meeting were mem&ers of a panchayat awareness committee initiated &y a network of *+,s in -daipur district$ Some of them said they ha%e ne%er participated in any ward sa&ha or gram sa&ha$ The president of the committee( a local youth( said we would now raise the 'uestions related to planning and &udget in the gram sa&ha$ The participants of /olawas meeting( all of them were dalits and do wage work for the li%elihood( said they do not participate in ward sa&ha or gram sa&ha$ They said that no &ody cares for us$ They faced acute shortage of water$ Drinking water was the most important pro&lem for them$ )hey had no idea about the s.ecial com.onent .lan (SCP)# according to which 99$5: of the e4.enditure should be incurred on the .rograames benefiting SC

communities$ )he sar.anch0s husband# who was introduced as sar.anch# did mention about this and said that about one*fourth of the amount is s.ent dalit tolas develo.ment wor-$ o !ard Sabhas and Gram Sabhas were being organised Another round of ward sa&has and then gram sa&has were to &e organised in the %illages during the coming week$ In .akrade% meeting( the Astha worker told women that this ward sa&ha and gram sa&ha are to finalise the 4P/ lists$ The state go%ernment has conducted a sur%ey for identifying the families &elow the po%erty line and on the &asis of the sur%ey the families ha%e &een gi%en num&ers for %arious indicators as( land( house( other assets etc$ In the ward sa&ha and gram sa&ha this list and num&ers gi%en to each family for each of the indicator is to &e read out and if any&ody ha%e any o&#ection( he or she could ask for a change$ Then the num&ers gi%en will &e finalised and a cut@ off line will &e announced( &elow which the families would &e declared 4P/ family$ In 1odhpur( one ward sa&ha in 4and gram panchayat was attended$ There were 96 people in the primary school of the %illage$ Secretary was reading out the

name of the family head and was telling the num&ers gi%en to the family &y the sur%eyors$ +enerally people agreed with the results$ In few cases they said it was wrong and asked the secretary to make the changes$ In a ward of B6< families( only 96 people decided the list$ B3V2-=DJ/"LVMM The P"Is in "a#asthan are working under many impediments$ This is their second term after the ;Crd Amendment Act was passed$ The P"Is( whose income and e)penditure ha%e &een analysed a&o%e( ha%e %ery less own income$ The second SF0 report has come and de%olution according to the recommendations of the same is &eing made$ )he P" s also have grants according to the first S%C and the +%C recommendations$ But there is a need to give the .anchayats a .ractical autonomy over the grants being devolved and introduce the conce.t of .lanning# instead of @ust ta-ing .ro.osals in every meeting of ward sabha and gram sabha$ The proposals gathered in the ward sa&ha and gram sa&ha are not prioritised in the open meetings and the elected representati%es and panchayat secretaries only decide

upon which pro#ect?work to take up$ The DP0s are constituted &ut ha%e no role in anykind of planning as such( &ecause planning is not done &y any le%el of P"Is$ The &ureaucracy is still considered the Greal go%ernmentH e%en &y the elected representati%es$ The elected representati%es lack the awareness( skill( capacity and moti%ations to work as the mem&ers of institutions of self@go%ernance$ The gram panchayats only ha%e a secretary as staff$ Some of the secretaries look after more than one +P$ Participation le%el in the ward sa&has and gram sa&has are %ery low( and these meetings are considered #ust a platform to gather the proposals %ery few of which are to &e actually implemented$ The *+,s and peopleHs organisations are making their efforts to increase the participation le%els in the meetings of ward sa&ha and gram sa&ha$ Though( the increase in participation people is certainly a %ery important( &ut it will also increase the e)pectations of people from the P"Is( which may not &e fulfilled gi%en their present financial situation$ The state go%ernment( recently( has taken some %ery important decisions( which certainly will promote the process of democratic decentralisation in the state$ 4ut

it has also initiated the programmes like DPIP( with the assistance from the Jorld 4ank$ The work done under the programmes comes under the functional domain of the P"Is &ut the P"Is ha%e no role in planning or implementation of the programme$ The "a#asthan Panchayat (3)tension to the Scheduled Areas) Act gi%es the P"Is in the scheduled areas the right to the .FPs &ut no rules ha%e &een framed in this regard and so the P"Is (+ram Sa&has as the Act suggests) cannot ha%e the income from .FPs$ In an order issued &y the 0hief Secretary( now all the P"Is ha%e &een gi%en full right o%er the .FPs and fodder from forest and non@forest lands$ 4ut the corresponding order issued &y the Forest Department does not incorporate the same$ ItHs not yet clear how this pro%ision would &e implemented$ ;eanwhile the .revious government# which issued some very .rogressive orders# have been voted out of .ower$ ?ne also has to see that how the new government fares# as far as decentralisation .rocess is concerned$ )able D 5$1& Panchayat Samiti Badgaon ncome and +4.enditure# "s$ 1=== B<<B@<C B<<9@<B

Income 3)penditure Income 3)penditure .a#or 2ead ? Items "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total "s$ 9<<< Percent to Total BB<B 3ducation CV<P$; 9P$B P868$P8 B6$P V;C6$VP 98$: BB96 drinking water 699$9 B$C V<;$C C$9 9:9;$VC :$9 668$P6 9$V B:<9 Agriculture :$B <$< B6<6 *ational employment prog <9 *ational Prog ;<B 1"= ;B <$C <$: <$< 9BV <$: V9$:; <$B C:6: Population sur%ey and statistics <$C <$< CV<: assistance to /ocal go%ernance and P"Is Assistance to P"Is against land re%enue BB$89 <$9 :$<: <$< +rants in aid to P"Is :6P$B B$C :6P$B 9$C <$< '6=8 total 853$9 9$' 831$1 9$: 8$=8 =$= 9515 other "ural Develo.ment Prog 1=1 P" Assistance to Panchayat Samiti Assistance to Pradhan ,ffice @non plan BP9C$< 9B$P 9888$B 9<$9 BP9< P$9 9V<B$B9 :$V Plan?0SS @89$: @<$6 99<; C$B ;6<$9B9 B$B S%C grant * staff B8$8 <$9 B<<$P 9$< 69$66 <$9 C;P$P< 9$9

Allowance to Pradhans (non Plan) B: <$9 B: <$9 C< <$9 B: <$9 +eneral assistance to PS non@plan 9$9 <$< <$< Free@fund small sa%ing award P$< <$< <$< S%C grant for construction wor-s %or Panchayat Samiti +eneral assistance 998$B; <$C %or Gram Panchayats +eneral assistance (maintenance) B8$PV <$9 "epairing V<$< <$C B9< <$V .atching share +rants @ TF0 6;P$C B$8 9B<< C$6 :8::$V6 9:$B 9nd S%S grant for construction wor-s %or Panchayat Samiti +eneral grants C6:$B 9$V 96V$C <$P %or Gram Panchayats +eneral assistance B:<C$C 9<$8 VVP$P C$: +rants @ 3F0 :68B$< B<$8 9V<P$P P$9 )otal "ural Develo.ment 9515 1=916$8 86$5 591'$3 96$' 5993$8 15$1 3=92$1 9'$1 Grants received from other De.artments %rom D"DA IA=@ through panchayats V< <$C Article B;6 (9) .ADA BP$C <$9 89V$99 B$V ;9:$8B B$9 Drought relief B<6V 9<P9 C$9 9<P9 C$9 Drought relief reco%ery B<6; ;V$8 <$C

I"DF V CC$6 <$B 1"= B<O 9C6 <$V <$< P< <$B :<$:< <$9 1"= 96O B< <$9 :9$PB <$9 .P/ADS B9BV$9 8$; 9B6;$6 V$C BV<:$V< ;$6 9;VV$V8 6$9 ./A fund 98<6$P P$; B9P;$9 99$< 9VB:$C; :$; B989$;9 V$C I30 9< <$< 9< <$9 S+S= 9:6 <$; 9B< <$V V <$< B< <$9 S+S=@training 9< <$< 9B$C <$9 Shilpshala@ shop construction 9B <$9 B: <$9 :B <$9 9<B <$C P.+=@infrastructure 96$: <$9 6;$P <$C 8:$6 <$C 9C$C: <$< 3+S@old B6:$: 9$C <$< :C8$9; 9$C 3+S@new@;<O C<O 98:$8 <$8 ::V$V B$C :968$<B 9B$< CP;C$:P 99$9 3+S@new@C<O 9:P$6 <$; CVC$P 9$P S+"=@C<O 9:BB$6 V$6 8:B$: :$P S+"=@transport B6 <$9 BC$< <$9 Drought relief B<68 B9$8 <$9 9P$B <$9 )otal D"DA 6'=2$= 93$& 5&&2$= 92$1 1=69&$6 '=$6 1=938$5 92$6 %rom Eila Parishad *ational family assistance V< <$C 8< <$6 96< <$: 9B$9B <$< *ational pregnancy assistance VP <$C <$< :8 <$9 4alika Samridhi =o#na 6< <$B VP$6 <$C -ntied fund 98$6C <$9 Apna +aon Apna !aam <$V <$< @99$< @<$9 C<9$BB <$8 4attis Aila 4attis !aam 9< <$< "ural De%$ 4asic =o#na "+0?."+0 6;$9 <$C PB$P <$: 8<$9B <$C *ational *utrition Programme@ Transport CV$P <$B <$<

4io@gas plants B$P <$< *ational *utrition Prog$ (.id day meal) 98VB$8 P$8 B<:C$< 9<$C C69$B; 9$< B6:$C9 <$; "ural housing scheme :V$P <$B :C$VP <$9 "+S1P 68: 9$; 68: 9$; "+ drinking water source BB8$< 9$< 6< <$C VC8$86 9$P 6P9$;6 9$; S+"=@B<O ;V<$9 C$6 C69$< 9$P "02@complicated dele%ery 6 <$< 6 <$< SF0 @ Aila Parishad 9B<< C$: )otal Eila Parishad '992$8 18$& 9&96$9 1'$& 1&'5$9 5$= '153$5 2$1 PS /oan Ad%ance etc$ 9C:;$8 V$9 9C6<$9 V$P V<CP$; 9;$: 6;V:$; 9V$V ?wn ncome 92'$5 1$' 35$2 =$8 61$1 =$9 133$9 =$5 Grand )otal 912&2$' 1==$= 123''$3 1==$= '86&5$6 1==$= '8&36$8 1==$= )able D 5$13 Ghadol Panchayat Samiti# ncome and +4.enditure Pattern# 9==9*='# "s$ 1=== Income Percent to Total 3)penditure Percent to Total BB<B 3ducation 6;<: 96$P P$9: <$< Jater supply 99P;$9P C$C 9<B;$;9 :$; CV<: Panchayat Asst$ ;C6$BB C$C B696 0D *on Plan salary 989:$;6 6$C BVC6$;P 99$8 SF0 salary ;;;$VV C$6

TA :V$B6 <$9 P6$BB <$: .edical 9;$;6 <$< 9;$:6 <$9 ,ffice 3)penses CV$B6 <$9 96$9: <$9 1"= salary P9 <$B 9B8$;; <$V Pradhan hon$ B: <$9 B: <$9 TF0?SF0 ;< <$B :<P$:B 9$P SF0 repairing 9< SF0 B<<<( PS 6::$:9C 9$6 PP$:P <$: 3F0 ;<9C$;P 98$6 CV:8$B 9V$6 SF0 CP6V$BV 9<$; V9B B$P 3F0 @ drought B6$PV <$9 S+S= 9$CV9 <$< 1"= 96O 88$PB <$6 1"= B<O 1"= II !athaodi B: <$9 C::$C; 9$V .P/ADS PP8$V8 B$6 9<C9$:V :$; ./A/ADS 9:<9$B; C$8 9:P9$:C V$; IJ= B: <$9 9P <$9 S+"= B8C8$8P P$B 9;6V$<B P$< S+"= B<O PB6 B$C :CV B$< S+"= Transport B6 <$9 S+"=@Training V$<C <$< "IDF 9$PC <$< A+A! B;$PB <$9 3AS B;;$8P <$P 9<98$8C :$V *utrition 86$8< <$C Jorkshop 9<: <$C B6$B <$9 "+DJS C<B$CV <$P 9:B$V8 <$V Family Asst$ B6< <$; C:< 9$6 .aternity &enefit CB$6 <$9 BP$C6 <$9 4alika Samridhi :< <$9

TF0 AP <$< BP$B6 <$9 P.+= ;P$: <$B 9B$PB <$9 +rain 4ank B;$;9 <$9 "eproducti%e K child health 6 <$< Jomen representati%es training C< <$9 .id day meal :CBP$B9 9B$< B;8;$<; 9B$; TAD 6:< 9$6 :B:$8C 9$8 S2+ 9$P8 <$< Drought@photography CP <$9 TADA@.ansi%akal 9B<< C$C Drought relief 9$PC <$< Impro%ed sto%es 6$; <$< 99$;: <$9 4P/ 0ensus 88$PB <$C /oan etc$ 9:V<$B< :$9 9:;:$P8 V$; ,wn Income 6<P$CB 9$: BPB$PP 9$C CV<96$<: 9<<$< BB<P<$CC 9<<$< )able D 5$12 Godh.ur ;andor Panchayat Samiti ncome and +4.enditure Pattern# 9==9*='# "s$ 1=== Grant from state govt$ Income Percent to Total 3)penditure Percent to Total BB<B 3ducation C$P: <$< BB$;V <$9 *on@formal ed$ B<86$96 8$< B696 0D *on Plan salary CB<< 9B$9 BVP;$P8 99$V SF0 salary TA :<< 9$6 ;6$;8 <$C .edical 8$996 <$< CB$VC <$9

,$3 ::: 9$; 6P$9; <$C Pradhan hon$ B: <$9 B:$V9 <$9 PS general grant 6P <$B SF0?TF0 V9B$;C9 B$C 9BC;$V 6$C CV<: land re%enue grant Ta) share to P"Is PS 9V;$P8 <$; )otal 9515 8&8&$35 1&$2 8938$53 13$8 ncome from other De.artments$ Dist$ Collector Ad$ Collector (Dev$) IA=@+eneral 99C6 :$C V9;$6 B$; IA=@ CVV$CPV 9$: 96< <$V -ntied 89$V8 <$C ;6 <$C S+S"=@Training 96 <$9 P$C< <$< Tools to rural artisan 8$PP <$< 1S= P8$C8 <$: 3AS VC$P88 <$B B9:$<P <$8 .P/ADS BP$6BP <$9 C< <$9 1"= B<O 96O 6<6$:: B$B dharohar ;9 <$C 6; <$B S0D0 workshop CC6 9$C B9V <$8 4A4! 8;P$96 C$; 98:$:9 <$P "ural growth scheme 96<$; <$V :<$99 <$B PS /uni 6$6 <$< ./A fund ;V$P <$C )otal ''9&$5' 19$6 912&$'' 2$5 Collector Assistance# Godh.ur Drought relief B<6B@6V P,/ CB$P; <$9 Angan&adi @ drought C;9$CP 9$: :9B$<; 9$P )otal '&1$'3 1$8 888$28 1$2

Eila Parishad Drought relief B<68 9;$;B <$9 Impro%ed sto%es 96$B <$9 .aternity assistance 6B$P <$B 9: <$9 Family assistance P9$P <$C P< <$C &alika samridhi yo#na ;B <$C B:$6 <$9 *utrition@&idding fee 9$B <$< 6$;9 <$< *ational nutrition programme@transport B6B$P; 9$9 "+ Pathshala@ honorarium :$P <$< Traditional water sources 99B<$8< :$B 8;P$:; :$B "+Pathshala@&uilding 9$C <$< )otal 1'85$9 5$1 1'&3$=1 5$2 ncome from GPs apna gaon apna kam C<P$6: 9$B 69;$:P B$B Audit fees 96:$B <$V B;B$V 9$B Shikshakarmi BPP$PB 9$9 /iteracy CB$:B <$9 P.+=@+eneral B9< <$P 9<6 <$6 P.+=@ V6 <$B C< <$9 I30 9$<9 <$< Income ta) 9<$V< <$< 9<$V< <$< PV;:@security deposited &y go%t$ B<C$66 <$P BC8$;: 9$< S+"= C<< 9$9 BV<$6P 9$9 Jomen panch training B6 <$9 3F0 6C6P$C9 B<$C CB6;$9 9:$< Bnd SF0 +P C<:C$9B 99$6 BC9;$;B 9<$< Bnd SF0 PS :9P$B6 9$V B:$89V <$9 *ational nutrition programme@ +hughury BP;8$:< 9<$8 B<<<$P; P$V Food for work@transport :8$:V <$B 9P:$BB <$P Small sa%ing B:< <$8 B:< 9$<

S+"= C<O 9VB<$PP V$9 9C<9$B 6$V S+"=@Training V$9P <$< S+"= P,/ 9< <$< 9< <$< S+"= Awareness 9< <$< :$99 <$< S+"= B<O :PP$6 9$P :6V B$< Fodder grant 9<$C <$< CV;$<P 9$V )otal 15&=9$8' 52$8 116'1$' 5= Coan Advances etc VC:$<B B$: ;6V$8 C$C ?wn ncome BP6$;8 9$9 :6;$C9 B$< G$ )otal 96813$=5 9<<$< 9'96&$&5 1==$= 0oncluding "emarks The study was conducted with a %iew to understand the system of panchayat finances in the country( taking !erala and "a#asthan as case studies$ The pro%isions related to the finances of Panchayati "a# Institutions (P"Is) as well as the degree of decentralisation( including fiscal processes( present differing pictures in the two states$ In !erala the P"Is en#oy a greater le%el of functional and financial autonomy$ Their annual &udget is much higher (though the si>e of gram panchayats are also higher in the state) and the gram panchayats ha%e significant share of own income in their total income$ The plan grant pro%ided to the P"Is &y the state is much higher and almost all of it is untied grant$ The District Planning 0ommittee

is the final &ody( which appro%es the pro#ects and P"Is( are independent in terms of planning and implementing the pro#ects$ The PeopleHs Planning 0ampaign initiated in the state ensured greater participation in the whole planning process$ In "a#asthan( on the other hand( the P"Is lack funds and ha%e no financial autonomy$ The P"Is seem to &e handicapped &ecause of &ureaucratic procedures in the states$ The District Planning 0ommittees are constituted &ut P"Is do not prepare any plan as such$ Attendance in the gram sa&has and ward sa&has is low and most of the people do not participate in the discussions there$ Apart from the efforts made &y the state go%ernment towards the decentralisation process( !erala with hundred percent literacy and &etter social indicators( pro&a&ly( has a condusi%e en%ironment for ensuring greater participation$ The e)cellent trend of social and political mo%ements in state has certainly &een a factor &ehind the success of the PeopleHs Planning 0ampaign$ Isaac (B<<<7 6C@ ;;) pro%ides a sur%ey of such campaigns and local le%el micro e)periments( which pro%ided the &ackground for a successful decentralisation campaign$

+roup farming started in the late 98P<s( &idi cooperati%e (Dinesh 4idi) started in 98V8( se%eral mass education programmes led &y !SSP and a successful total literacy campaign are &ut some of the e)amples of mass mo%ements which pro%ided the &ase for the PeopleHs Planning 0ampaign$ ,n the other hand in "a#asthan( a feudal society and higher le%el of po%erty pose a challenge for participation$ The drought situation during last fi%e years in the state( when the P"Is started their work after the ;Crd Amendment( is also responsi&le for less participation in gram sa&has (Singh( B<<C)$ 4ut the most important difference o&ser%ed was that in "a#asthan( no &ody( neither the elected representati%es nor the go%ernment officials at district le%el and &elow( nor the people( had confidence that the P"Is could indeed work$ This reflects the way the whole system has &een functioning$ This lack of confidence is certainly a result of the way the whole system has &een working so far$ In !erala also there was dissatisfaction e)pressed with P"Is and their functioning$ 4ut this discontent was result of an enhanced e)pectation of people from the panchayats$ Budget ULD,NV/V

The P"Is &udget has &een studied in detail to understand the income and e)penditure patterns$ An action research methodology is suita&le to study and analyse &udget at P"I le%el$ There are no &udget documents a%aila&le at the P"I le%els in "a#asthan$ 3lected representati%es and panchayat staffs were %ery apprehensi%e a&out sharing &udget documents or Annual Financial Statements$ Annual financial Statements do not pro%ide sufficient data to map the &udgeting process$ Inconsistency of documents and data( lack of regular format ? pattern etc$ hinder comparison from year to year$ In !erala the panchayats do prepare their annual &udgets( &ut the AFSs were not ready in some cases$ The &udget documents ? AFSs of the P"Is in !erala also ha%e same kind of pro&lems( as there is no standard format for the P"I &udget in !erala either$ 2owe%er( the elected representati%es and panchayat staff in the state were %ery cooperati%e and willing to share all the documents related to &udget and accounts$ The findings of the analysis of the selected .anchayats0 budgets are as follow7

F The .anchayats0 own income is %ery low (< @ :O) in "a#asthan$ The gram panchayats in !erala ha%e a significant share of own income in their total income( though it is also on decline( as the grants from the state go%ernment had increased$ .ost of the own income of +Ps is ta) income$ The &lock and district panchayats ha%e no ta) income in !erala$ F The share of grants recei%ed from the state go%ernment is 'uite high in !erala$ 2owe%er( in the last two years the state go%ernment has curtailed the grants to panchayats due to the fiscal crisis$ F ,n the e4.enditure side( much of the e)penditure has gone towards construction works in &oth !erala and "a#asthan$ The share of administrati%e and office e)penditure is 'uite low in &oth the states particularly in !erala$ F The share of untied fund( on which the panchayat &ody has full autonomy( is higher in !erala( as much of the grants the P"Is recei%ed from the state go%ernment are in form of untied fund$ F The auditing is done &y the /FAD$ In !erala( a 'uarterly Gperformance auditingH is a uni'ue pro%ision$ The social auditing &y the gram sa&ha is done in &oth the states$ 2owe%er( with low participation and less awareness( this may not

turn out to &e %ery effecti%e$ F !erala P"Is follow the decentralised .lanning to a great e)tent$ Jhile in "a#asthan( this is still an alien concept$ Though issue of &ureaucratisation of planning process( curtailing the plan fund to P"Is and introduction of user charges etc$ need to &e addressed in !erala$ 62F"PP2L+DJ/"LVMM F The P"Is should &e gi%en full autonomy on the resources a%aila&le with them( regardless of the sources of the fund$ F The P"Is should &e asked to plan and implement the works to &e done from the funds a%aila&le under 0entrally Sponsored Schemes and other schemes like .P/ADS and ./A fund$ F The funds and functionary must &e transferred to the P"Is along with each and e%ery function transferred to them$ F There is a need to prepare a separate list for the P"Is in the 0onstitution of the su&#ects coming under the P"IsH domain$ The inter@tier distri&ution of the su&#ects (or su&@su&#ects) can &e left to the states$ F P"IsH own income should &e increased$ 2owe%er( it should not &ecome an e)cuse to impose e)tra ta) &urden on the rural population and ? or agriculture sector$ Some of the ta)es &eing collected &y the state go%ernments can &e

transferred to the P"Is$ Jhile assigning the new ta)es to the P"Is( the elected representati%es of panchayats should also &e in%ol%ed$ This will ensure the proper ta)ation as well as &etter collection$ F There should &e a mechanism to consult and take ad%ises from the elected panchayat representati%es &efore introducing new ta)es( user charges or &eneficiary contri&utions$ In !erala there are associations of panchayat presidents of all three le%els$ 0onsultation with these associations &efore introducing new ta)es or user charges?&eneficiary contri&utions could &e a way out$ F 0apacity &uilding?training of the P"Is staff and elected representati%es( particularly on the themes like( accounting( micro planning( technical appraisals etc$( is necessary$ Facilities and support to P"Is is necessary at each district( as regards such training$ F It should &e mandatory for the P"Is to prepare their annual &udget and annual plans$ The preparation of an integrated plan for the district &y the DP0 should also &e mandatory$ F The amount of estimated money to &e de%ol%ed to the P"Is( through %arious

pro%isions should &e told to the P"Is in ad%ance (say in the month of 1anuary e%ery year) so that they could plan for the ne)t year according to the a%aila&le resources$ F There should &e a pro%ision at the state le%el to incorporate the district plans prepared &y the DP0s in the state plans$ This can &e done &y the agencies like state planning &oards or the planning departments of the state go%ernment$ F In !erala( the DP0s are responsi&le for final appro%al of the plans and the pro#ects prepared &y the P"Is$ The district planning officer (DP,) acts as secretary to the DP0 and the secretariat has sufficient staff to undertake the #o& of e%aluation and appraisal of the pro#ect proposals$ This seems to &e a fairly good pro%ision$ ,ther states could adopt this pattern$ F The accounting system of the P"Is needs to &e upgraded and aligned with the accounting pattern at state and central le%els$ It is necessary to ha%e symmetry in accounting pattern across the states$ The in%ol%ement of 0KA+ &ecomes a necessity in this regard and this could &e done with appropriate consent of the state go%ernments$ F There is no pro&lem with the pro%ision of the auditing of the P"Is accounts &y

the /FADs$ The focus is not on the auditing agency( &ut the process and manner that audit is done$ /FADs are state le%el organisations and thus can do the #o& &etter$ To function effecti%ely( /FADs need sufficient staff and infrastructure$ This is specially a concern in "a#asthan$ The study highlights the fact that it is not sufficient to ha%e the ;Crd Amendment Act that is gi%ing political decentralisation( &ut decentralisation of finance is also e'ually important for effecti%e go%ernance mechanisms$ This is particularly %isi&le when we compare the situations in !erala and "a#asthan$ The !erala P"Is ha%e &een a&le to act as the institutions of self@ go%ernance and deli%er the ser%ices &etter &ecause of the financial and functional autonomy gi%en to them &y the state go%ernment$ "a#asthan presents a %ery different picture with low financial autonomy( resource strain and &ureaucratic procedures hampering the functioning of P"Is$ This along with low peopleHs participation further impedes the system$ This only ser%es to strengthen the point that unless fiscal and political decentralisation go hand in hand( self go%ernance at the Panchayat Institutions le%el( in its true sense( will remain more of a concept$

APP+ND C+S A..endi4 Article 98' of )he Constitution PA") K1' )F+ PANCFAHA)S Article 98'$ Definitions$* In this Part( unless the conte)t otherwise re'uires(@ (a) ]district] means a district in a StateS (&) ]+ram Sa&ha] means a &ody consisting of persons registered in the electoral rolls relating to a %illage comprised within the area of Panchayat at the %illage le%elS (c) ]intermediate le%el] means a le%el &etween the %illage and district le%els specified &y the +o%ernor of a State &y pu&lic notification to &e the intermediate le%el for the purposes of this PartS (d) ]Panchayat] means an institution (&y whate%er name called) of self@go%ernment constituted under article B:C4( for the rural areasS (e) ]Panchayat area] means the territorial area of a PanchayatS (f) ]population] means the population as ascertained at the last preceding census of which the rele%ant figures ha%e &een pu&lishedS (g) ]%illage] means a %illage specified &y the +o%ernor &y pu&lic notification to &e a %illage for the purposes of this Part and includes a group of %illages so specified$ 98'A$ Gram Sabha$* A +ram Sa&ha may e)ercise such powers and perform such functions at the %illage le%el as the

/egislature of a State may( &y law( pro%ide$ 98'B$ Constitution of Panchayats$* (9) There shall &e constituted in e%ery State( Panchayats at the %illage( intermediate and district le%els in accordance with the pro%isions of this Part$ (B) *otwithstanding anything in clause (9)( Panchayats at the intermediate le%el may not &e constituted in a State ha%ing a population not e)ceeding twenty lakhs$ 98'C$ Com.osition of Panchayats$* (9) Su&#ect to the pro%isions of this Part( the /egislature of a State may( &y law( make pro%isions with respect to the composition of Panchayats7 Pro%ided that the ratio &etween the population of the territorial area of a Panchayat at any le%el and the num&er of seats in such Panchayat to &e filled &y election shall( so far as practica&le( &e the same throughout the State$ (B) All the seats in a Panchayat shall &e filled &y persons chosen &y direct election from territorial constituencies in the Panchayat area and( for this purpose( each Panchayat area shall &e di%ided into territorial constituencies in such manner that the ratio &etween the population of each constituency and the num&er of seats allotted to it shall( so far as practica&le( &e the same throughout the Panchayat area$ (C) The /egislature of a State may( &y law( pro%ide for the representation@ 9C Inserted &y the 0onstitution (Se%enty@third Amendment) Act( 988B( s$ B (w$e$f$ B:@:@988C)$

(a) of the 0hairpersons of the Panchayats at the %illage le%el( in the Panchayats at the intermediate le%el or( in the case of a State not ha%ing Panchayats at the intermediate le%el( in the Panchayats at the district le%elS (&) of the 0hairpersons of the Panchayats at the intermediate le%el( in the Panchayats at the district le%elS (c) of the mem&ers of the 2ouse of the People and the mem&ers of the /egislati%e Assem&ly of the State representing constituencies which comprise wholly or partly a Panchayat area at a le%el other than the %illage le%el( in such PanchayatS (d) of the mem&ers of the 0ouncil of States and the mem&ers of the /egislati%e 0ouncil of the State( where they are registered as electors within@ (i) a Panchayat area at the intermediate le%el( in Panchayat at the intermediate le%elS (ii) a Panchayat area at the district le%el( in Panchayat at the district le%el$ (:) The 0hairperson of a Panchayat and other mem&ers of a Panchayat whether or not chosen &y direct election from territorial constituencies in the Panchayat area shall ha%e the right to %ote in the meetings of the Panchayats$ (6) The 0hairperson of@ (a) a Panchayat at the %illage le%el shall &e elected in such manner as the /egislature of a State may( &y law( pro%ideS and (&) a Panchayat at the intermediate le%el or district le%el shall &e elected &y( and from amongst(

the elected mem&ers thereof$ 98'D$ "eservation of seats$* (9) Seats shall &e reser%ed for@ (a) the Scheduled 0astesS and (&) the Scheduled Tri&es( in e%ery Panchayat and the num&er of seats so reser%ed shall &ear( as nearly as may &e( the same proportion to the total num&er of seats to &e filled &y direct election in that Panchayat as the population of the Scheduled 0astes in that Panchayat area or of the Scheduled Tri&es in that Panchayat area &ears to the total population of that area and such seats may &e allotted &y rotation to different constituencies in a Panchayat$ (B) *ot less than one@third of the total num&er of seats reser%ed under clause (9) shall &e reser%ed for women &elonging to the Scheduled 0astes or( as the case may &e( the Scheduled Tri&es$ (C) *ot less than one@third (including the num&er of seats reser%ed for women &elonging to the Scheduled 0astes and the Scheduled Tri&es) of the total num&er of seats to &e filled &y direct election in e%ery Panchayat shall &e reser%ed for women and such seats may &e allotted &y rotation to different constituencies in a Panchayat$ (:) The offices of the 0hairpersons in the Panchayats at the %illage or any other le%el shall &e reser%ed for the Scheduled 0astes( the Scheduled Tri&es and women in such manner as the /egislature of a State may( &y law( pro%ide7

Pro%ided that the num&er of offices of 0hairpersons reser%ed for the Scheduled 0astes and the Scheduled Tri&es in the Panchayats at each le%el in any State shall &ear( as nearly as may &e( the same proportion to the total num&er of such offices in the Panchayats at each le%el as the population of the Scheduled 0astes in the State or of the Scheduled Tri&es in the State &ears to the total population of the State7 Pro%ided further that not less than one@third of the total num&er of offices of 0hairpersons in the Panchayats at each le%el shall &e reser%ed for women7 Pro%ided also that the num&er of offices reser%ed under this clause shall &e allotted &y rotation to different Panchayats at each le%el$ (6) The reser%ation of seats under clauses (9) and (B) and the reser%ation of offices of 0hairpersons (other than the reser%ation for women) under clause (:) shall cease to ha%e effect on the e)piration of the period specified in article CC:$ (V) *othing in this Part shall pre%ent the /egislature of a State from making any pro%ision for reser%ation of seats in any Panchayat or offices of 0hairpersons in the Panchayats at any le%el in fa%our of &ackward class of citi>ens$ 98'+$ Duration of Panchayats# etc$* (9) 3%ery Panchayat( unless sooner dissol%ed under any law for the time &eing in force( shall continue for fi%e years from the date appointed for its first meeting and no longer$

(B) *o amendment of any law for the time &eing in force shall ha%e the effect of causing dissolution of a Panchayat at any le%el( which is functioning immediately &efore such amendment( till the e)piration of its duration specified in clause (9)$ (C) An election to constitute a Panchayat shall &e completed@ (a) &efore the e)piry of its duration specified in clause (9)S (&) &efore the e)piration of a period of si) months from the date of its dissolution7 Pro%ided that where the remainder of the period for which the dissol%ed Panchayat would ha%e continued is less than si) months( it shall not &e necessary to hold any election under this clause for constituting the Panchayat for such period$ (:) A Panchayat constituted upon the dissolution of a Panchayat &efore the e)piration of its duration shall continue only for the remainder of the period for which the dissol%ed Panchayat would ha%e continued under clause (9) had it not &een so dissol%ed$ 98'%$ Dis>ualifications for membershi.$* (9) A person shall &e dis'ualified for &eing chosen as( and for &eing( a mem&er of a Panchayat@ (a) if he is so dis'ualified &y or under any law for the time &eing in force for the purposes of elections to the /egislature of the State concerned7 Pro%ided that no person shall &e dis'ualified on the ground that he is less than twenty@fi%e years of age( if he has attained the age of twenty@one yearsS

(&) if he is so dis'ualified &y or under any law made &y the /egislature of the State$ (B) If any 'uestion arises as to whether a mem&er of a Panchayat has &ecome su&#ect to any of the dis'ualifications mentioned in clause (9)( the 'uestion shall &e referred for the decision of such authority and in such manner as the /egislature of a State may( &y law( pro%ide$ 98'G$ Powers# authority and res.onsibilities of Panchayats$* Su&#ect to the pro%isions of this 0onstitution( the /egislature of a State may( &y law( endow the Panchayats with such powers and authority as may &e necessary to ena&le them to function as institutions of self@go%ernment and such law may contain pro%isions for the de%olution of powers and responsi&ilities upon Panchayats at the appropriate le%el( su&#ect to such conditions as may &e specified therein( with respect to@ (a) the preparation of plans for economic de%elopment and social #usticeS (&) the implementation of schemes for economic de%elopment and social #ustice as may &e entrusted to them including those in relation to the matters listed in the 3le%enth Schedule$ 98'F$ Powers to im.ose ta4es by# and %unds of# the Panchayats$* The /egislature of a State may( &y law(@ (a) authorise a Panchayat to le%y( collect and appropriate such ta)es( duties( tolls and fees in accordance with such procedure and su&#ect to such limitsS

(&) assign to a Panchayat such ta)es( duties( tolls and fees le%ied and collected &y the State +o%ernment for such purposes and su&#ect to such conditions and limitsS (c) pro%ide for making such grants@in@aid to the Panchayats from the 0onsolidated Fund of the StateS and (d) pro%ide for constitution of such Funds for crediting all moneys recei%ed( respecti%ely( &y or on &ehalf of the Panchayats and also for the withdrawal of such moneys therefrom( as may &e specified in the law$ 98'* $ Constitution of %inance Commission to review financial .osition$* (9) The +o%ernor of a State shall( as soon as may &e within one year from the commencement of the 0onstitution (Se%enty@third Amendment) Act( 988B( and thereafter at the e)piration of e%ery fifth year( constitute a Finance 0ommission to re%iew the financial position of the Panchayats and to make recommendations to the +o%ernor as to@ (a) the principles which should go%ern@ (i) the distri&ution &etween the State and the Panchayats of the net proceeds of the ta)es( duties( tolls and fees le%ia&le &y the State( which may &e di%ided &etween them under this Part and the allocation &etween the Panchayats at all le%els of their respecti%e shares of such proceedsS (ii) the determination of the ta)es( duties( tolls and fees which may &e assigned to( or appropriated &y( the PanchayatsS

(iii) the grants@in@aid to the Panchayats from the 0onsolidated Fund of the StateS (&) the measures needed to impro%e the financial position of the PanchayatsS (c) any other matter referred to the Finance 0ommission &y the +o%ernor in the interests of sound finance of the Panchayats$ (B) The /egislature of a State may( &y law( pro%ide for the composition of the 0ommission( the 'ualifications which shall &e re'uisite for appointment as mem&ers thereof and the manner in which they shall &e selected$ (C) The 0ommission shall determine their procedure and shall ha%e such powers in the performance of their functions as the /egislature of the State may( &y law( confer on them$ (:) The +o%ernor shall cause e%ery recommendation made &y the 0ommission under this article together with an e)planatory memorandum as to the action taken thereon to &e laid &efore the /egislature of the State$ 98'G$ Audit of accounts of Panchayats$* The /egislature of a State may( &y law( make pro%isions with respect to the maintenance of accounts &y the Panchayats and the auditing of such accounts$ 98'7$ +lections to the Panchayats$* (9) The superintendence( direction and control of the preparation of electoral rolls for( and the conduct of( all elections to the Panchayats shall &e %ested in a State 3lection 0ommission

consisting of a State 3lection 0ommissioner to &e appointed &y the +o%ernor$ (B) Su&#ect to the pro%isions of any law made &y the /egislature of a State( the conditions of ser%ice and tenure of office of the State 3lection 0ommissioner shall &e such as the +o%ernor may &y rule determine7 Pro%ided that the State 3lection 0ommissioner shall not &e remo%ed from his office e)cept in like manner and on the like grounds as a 1udge of a 2igh 0ourt and the conditions of ser%ice of the State 3lection 0ommissioner shall not &e %aried to his disad%antage after his appointment$ (C) The +o%ernor of a State shall( when so re'uested &y the State 3lection 0ommission( make a%aila&le to the State 3lection 0ommission such staff as may &e necessary for the discharge of the functions conferred on the State 3lection 0ommission &y clause (9)$ (:) Su&#ect to the pro%isions of this 0onstitution( the /egislature of a State may( &y law( make pro%ision with respect to all matters relating to( or in connection with( elections to the Panchayats$ 98'C$ A..lication to /nion territories$* The pro%isions of this Part shall apply to the -nion territories and shall( in their application to a -nion territory( ha%e effect as if the references to the +o%ernor of a State were references to the Administrator of the -nion territory appointed under article BC8 and references to the /egislature

or the /egislati%e Assem&ly of a State were references( in relation to a -nion territory ha%ing a /egislati%e Assem&ly( to that /egislati%e Assem&ly7 Pro%ided that the President may( &y pu&lic notification( direct that the pro%isions of this Part shall apply to any -nion territory or part thereof su&#ect to such e)ceptions and modifications as he may specify in the notification$ 98';$ Part not to a..ly to certain areas$* (9) *othing in this Part shall apply to the Scheduled Areas referred to in clause (9)( and the tri&al areas referred to in clause (B)( of article B::$ (B) *othing in this Part shall apply to@ (a) the States of *agaland( .eghalaya and .i>oramS (&) the hill areas in the State of .anipur for which District 0ouncils e)ist under any law for the time &eing in force$ (C) *othing in this Part@ (a) relating to Panchayats at the district le%el shall apply to the hill areas of the District of Dar#eeling in the State of Jest 4engal for which Dar#eeling +orkha 2ill 0ouncil e)ists under any law for the time &eing in forceS (&) shall &e construed to affect the functions and powers of the Dar#eeling +orkha 2ill 0ouncil constituted under such law$ X(CA) *othing in article B:CD( relating to reser%ation of seats for the Scheduled 0astes( shall apply to the State of Arunachal PradeshR$ (:) *otwithstanding anything in this 0onstitution(@

(a) the /egislature of a State referred to in su&@clause (a) of clause (B) may( &y law( e)tend this Part to that State( e)cept the areas( if any( referred to in clause (9)( if the /egislati%e Assem&ly of that State passes a resolution to that effect &y a ma#ority of the total mem&ership of that 2ouse and &y a ma#ority of not less than two@thirds of the mem&ers of that 2ouse present and %otingS (&) Parliament may( &y law( e)tend the pro%isions of this Part to the Scheduled Areas and the tri&al areas referred to in clause (9) su&#ect to such e)ceptions and modifications as may &e specified in such law( and no such law shall &e deemed to &e an amendment of this 0onstitution for the purposes of article CVP$ 98'N$ Continuance of e4isting laws and Panchayats$* *otwithstanding anything in this Part( any pro%ision of any law relating to Panchayats in force in a State immediately &efore the commencement of the 0onstitution (Se%enty@third Amendment) Act( 988B( which is inconsistent with the pro%isions of this Part( shall continue to &e in force until amended or repealed &y a competent /egislature or other competent authority or until the e)piration of one year from such commencement( whiche%er is earlier7 Pro%ided that all the Panchayats e)isting immediately &efore such commencement shall continue till the e)piration of their duration( unless sooner dissol%ed &y a resolution passed to that effect &y

the /egislati%e Assem&ly of that State or( in the case of a State ha%ing a /egislati%e 0ouncil( &y each 2ouse of the /egislature of that State$ 98'*?$ Bar to interference by courts in electoral matters$* *otwithstanding anything in this 0onstitution(@ (a) the %alidity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies( made or purporting to &e made under article B:C!( shall not &e called in 'uestion in any courtS (&) no election to any Panchayat shall &e called in 'uestion e)cept &y an election petition presented to such authority and in such manner as is pro%ided for &y or under any law made &y the /egislature of a State$R A..endi4 Article B:C of The 0onstitution PA") KA18 )F+ ;/N C PAC ) +S 98'P$ Definitions$* In this Part( unless the conte)t otherwise re'uires(@ (a) ]0ommittee] means a 0ommittee constituted under article B:CSS (&) ]district] means a district in a StateS (c) ].etropolitan area] means an area ha%ing a population of ten lakhs or more( comprised in one or more districts and consisting of two or more .unicipalities or Panchayats or other contiguous areas( specified &y the +o%ernor &y pu&lic notification to &e a .etropolitan area for the purposes

of this PartS (d) ].unicipal area] means the territorial area of a .unicipality as is notified &y the +o%ernorS (e) ].unicipality] means an institution of self@go%ernment constituted under article B:CLS (f) ]Panchayat] means a Panchayat constituted under article B:C4S (g) ]population] means the population as ascertained at the last preceding census of which the rele%ant figures ha%e &een pu&lished$ 98'L$ Constitution of ;unici.alities$* (9) There shall &e constituted in e%ery State(@ (a) a *agar Panchayat (&y whate%er name callled) for a transitional area( that is to say( an area in transition from a rural area to an ur&an areaS (&) a .unicipal 0ouncil for a smaller ur&an areaS and (c) a .unicipal 0orporation for a larger ur&an area( in accordance with the pro%isions of this Part7 Pro%ided that a .unicipality under this clause may not &e constituted in such ur&an area or part thereof as the +o%ernor may( ha%ing regard to the si>e of the area and the municipal ser%ices &eing pro%ided or proposed to &e pro%ided &y an industrial esta&lishment in that area and such other factors as he may deem fit( &y pu&lic notification( specify to &e an industrial township$ (B) In this article( ]a transitional area]( ]a smaller ur&an area] or ]a larger ur&an area] means such area as the +o%ernor may( ha%ing regard to the population of the area( the density of the

population therein( the re%enue generated for local administration( the percentage of employment in non@agricultural acti%ities( the economic importance or such other factors as he may deem fit( specify &y pu&lic notification for the purposes of this Part$ 98'"$ Com.osition of ;unici.alities$* (9) Sa%e as pro%ided in clause (B)( all the seats in a .unicipality shall &e filled &y persons chosen &y direct election from the territorial constituencies in the .unicipal area and for this purpose each .unicipal area shall &e di%ided into territorial constituencies to &e known as wards$ (B) The /egislature of a State may( &y law( pro%ide@ (a) for the representation in a .unicipality of@ (i) persons ha%ing special knowledge or e)perience in .unicipal administrationS (ii) the mem&ers of the 2ouse of the People and the mem&ers of the /egislati%e Assem&ly of the State representing constituencies which comprise wholly or partly the .unicipal areaS (iii) the mem&ers of the 0ouncil of States and the mem&ers of the /egislati%e 0ouncil of the State registered as electors within the .unicipal areaS (i%) the 0hairpersons of the 0ommittees constituted under clause (6) of article B:CS7 Pro%ided that the persons referred to in paragraph (i) shall not ha%e the right to %ote in the meetings of the .unicipalityS (&) the manner of election of the 0hairperson of a .unicipality$

98'S$ Constitution and com.osition of !ards Committees# etc$* 9: Inserted &y the 0onstitution (Se%enty@fourth Amendment) Act( 988B( s$ B (w$e$f$ 9@V@988C)$ (9) There shall &e constituted Jards 0ommittees( consisting of one or more wards( within the territorial area of a .unicipality ha%ing a population of three lakhs or more$ (B) The /egislature of a State may( &y law( make pro%ision with respect to@ (a) the composition and the territorial area of a Jards 0ommitteeS (&) the manner in which the seats in a Jards 0ommittee shall &e filled$ (C) A mem&er of a .unicipality representing a ward within the territorial area of the Jards 0ommittee shall &e a mem&er of that 0ommittee$ (:) Jhere a Jards 0ommittee consists of@ (a) one ward( the mem&er representing that ward in the .unicipalityS or (&) two or more wards( one of the mem&ers representing such wards in the .unicipality elected &y the mem&ers of the Jards 0ommittee( shall &e the 0hairperson of that 0ommittee$ (6) *othing in this article shall &e deemed to pre%ent the /egislature of a State from making any pro%ision for the constitution of 0ommittees in addition to the Jards 0ommittees$ 98')$ "eservation of seats$* (9) Seats shall &e reser%ed for the Scheduled 0astes and the Scheduled Tri&es in e%ery

.unicipality and the num&er of seats so reser%ed shall &ear( as nearly as may &e( the same proportion to the total num&er of seats to &e filled &y direct election in that .unicipality as the population of the Scheduled 0astes in the .unicipal area or of the Scheduled Tri&es in the .unicipal area &ears to the total population of that area and such seats may &e allotted &y rotation to different constituencies in a .unicipality$ (B) *ot less than one@third of the total num&er of seats reser%ed under clause (9) shall &e reser%ed for women &elonging to the Scheduled 0astes or( as the case may &e( the Scheduled Tri&es$ (C) *ot less than one@third (including the num&er of seats reser%ed for women &elonging to the Scheduled 0astes and the Scheduled Tri&es) of the total num&er of seats to &e filled &y direct election in e%ery .unicipality shall &e reser%ed for women and such seats may &e allotted &y rotation to different constituencies in a .unicipality$ (:) The offices of 0hairpersons in the .unicipalities shall &e reser%ed for the Scheduled 0astes( the Scheduled Tri&es and women in such manner as the /egislature of a State may( &y law( pro%ide$ (6) The reser%ation of seats under clauses (9) and (B) and the reser%ation of offices of 0hairpersons (other than the reser%ation for women) under clause (:) shall cease to ha%e effect on the e)piration of the period specified in article CC:$

(V) *othing in this Part shall pre%ent the /egislature of a State from making any pro%ision for reser%ation of seats in any .unicipality or offices of 0hairpersons in the .unicipalities in fa%our of ward class of citi>ens$ 98'/$ Duration of ;unici.alities# etc$* (9) 3%ery .unicipality( unless sooner dissol%ed under any law for the time &eing in force( shall continue for fi%e years from the date appointed for its first meeting and no longer7 Pro%ided that a .unicipality( shall &e gi%en a reasona&le opportunity of &eing heard &efore its dissolution$ (B) *o amendment of any law for the time &eing in force shall ha%e the effect of causing dissolution of a .unicipality at any le%el( which is functioning immediately &efore such amendment( till the e)piration of its duration specified in clause (9)$ (C) An election to constitute a .unicipality shall &e completed(@ (a) &efore the e)piry of its duration specified in clause (9)S (&) &efore the e)piration of a period of si) months from the date of its dissolution7 Pro%ided that where the remainder of the period for which the dissol%ed .unicipality would ha%e continued is less than si) months( it shall not &e necessary to hold any election under this clause for constituting the .unicipality for such period$ (:) A .unicipality constituted upon the dissolution of a .unicipality &efore the e)piration of its

duration shall continue only for the remainder of the period for which the dissol%ed .unicipality would ha%e continued under clause (9) had it not &een so dissol%ed$ 98' <$ Duration of ;unici.alities# etc$* (9) 3%ery .unicipality( unless sooner dissol%ed under any law for the time &eing in force( shall continue for fi%e years from the date appointed for its first meeting and no longer7 Pro%ided that a .unicipality( shall &e gi%en a reasona&le opportunity of &eing heard &efore its dissolution$ (B) *o amendment of any law for the time &eing in force shall ha%e the effect of causing dissolution of a .unicipality at any le%el( which is functioning immediately &efore such amendment( till the e)piration of its duration specified in clause (9)$ (C) An election to constitute a .unicipality shall &e completed(@ (a) &efore the e)piry of its duration specified in clause (9)S (&) &efore the e)piration of a period of si) months from the date of its dissolution7 Pro%ided that where the remainder of the period for which the dissol%ed .unicipality would ha%e continued is less than si) months( it shall not &e necessary to hold any election under this clause for constituting the .unicipality for such period$ (:) A .unicipality constituted upon the dissolution of a .unicipality &efore the e)piration of its

duration shall continue only for the remainder of the period for which the dissol%ed .unicipality would ha%e continued under clause (9) had it not &een so dissol%ed$ 98'!$ Powers# authority and res.onsibilities of ;unici.alities# etc$* Su&#ect to the pro%isions of this 0onstitution( the /egislature of a State may( &y law( endow@ (a) the .unicipalities with such powers and authority as may &e necessary to ena&le them to function as institutions of self@go%ernment and such law may contain pro%isions for the de%olution of powers and responsi&ilities upon .unicipalities( su&#ect to such conditions as may &e specified therein( with respect to@ (i) the preparation of plans for economic de%elopment and social #usticeS (ii) the performance of functions and the implementation of schemes as may &e entrusted to them including those in relation to the matters listed in the Twelfth ScheduleS (&) the 0ommittees with such powers and authority as may &e necessary to ena&le them to carry out the responsi&ilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule( 98'K$ Power to im.ose ta4es by# and %unds of# the ;unici.ilities$* The /egislature of a State may( &y law(@ (a) authorise a .unicipality to le%y( collect and appropriate such ta)es( duties( tolls and fees in

accordance with such procedure and su&#ect to such limitsS (&) assign to a .unicipality such ta)es( duties( tolls and fees le%ied and collected &y the State +o%ernment for such purposes and su&#ect to such conditions and limitsS (c) pro%ide for making such grants@in@aid to the .unicipalities from the 0onsolidated Fund of the StateS and (d) pro%ide for constitution of such Funds for crediting all moneys recei%ed( respecti%ely( &y or on &ehalf of the .unicipalities and also for the withdrawal of such moneys therefrom( as may &e specified in the /aw$ 98'H$ %inance Commission$* (9) The Finance 0ommission constituted under article B:C@ I shall also re%iew the financial position of the .unicipalities and make recommendations to the +o%ernor as to@ (a) the principles which should go%ern@ (i) the distri&ution &etween the State and the .unicipalities of the net proceeds of the ta)es( duties( tolls and fees le%ia&le &y the State( which may &e di%ided &etween them under this Part and the allocation &etween the .unicipalities at all le%els of their respecti%e shares of such proceedsS (ii) the determination of the ta)es( duties( tools and fees which may &e assigned to( or appropriated &y( the .unicipalitiesS (iii) the grants@in@aid to the .unicipalities from the 0onsolidated Fund of the StateS

(&) the measures needed to impro%e the financial position of the .unicipalitiesS (c) any other matter referred to the Finance 0ommission &y the +o%ernor in the interests of sound finance of the .unicipalities$ (B) The +o%ernor shall cause e%ery recommendation made &y the 0ommission under this article together with an e)planatory memorandum as to the action taken theron to &e laid &efore the /egislature of the State$ 98'E$ Audit of accounts of ;unici.alities$* The /egislature of a State may( &y law( make pro%isions with respct to the maintenance of accounts &y the .unicipalities and the auditing of such accounts$ 98'EA$ +lections to the ;unici.alities$* (9) The superintendence( direction and control of the preparation of electoral rolls for( and the conduct of( all elections to the .unicipalities shall &e %ested in the State 3lection 0ommission referred to in article B:C!$ (B) Su&#ect to the pro%isions of this 0onstitution( the /egislature of a State may( &y law( make pro%ision with respect to all matters relating to( or in connection with( elections to the .unicipalities$ 98'EB$ A..lication to /nion territories$* The pro%isions of this Part shall apply to the -nion territories and shall( in their application to a -nion territory( ha%e effect as if the references to the +o%ernor of a State were references to the

Administrator of the -nion territory appointed under article BC8 and references to the /egislature or the /egislati%e Assem&ly of a State were references in relation to a -nion territory ha%ing a /egislati%e Assem&ly( to that /egislati%e Assem&ly7 Pro%ided that the President may( &y pu&lic notification( direct that the pro%isions of this Part shall apply to any -nion territory or part thereof su&#ect to such e)ceptions and modifications as he may specify in the notification$ 98'EC$ Part not to a..ly to certain areas$* (9) *othing in this Part shall apply to the Scheduled Areas referred to in clause (9)( and the tri&al areas referred to in clause (B)( of article B::$ (B) *othing in this Part shall &e construed to affect the functions and powers of the Dar#eeling +orkha 2ill 0ouncil constituted under any law for the time &eing in force for the 2ill areas of the district of Dar#eeling in the State of Jest 4engal$ (C) *otwithstanding anything in this 0onstitution( Parliament may( &y law( e)tend the pro%isions of this Part to the Scheduled Areas and the tri&al areas referred to in clause (9) su&#ect to such e)ceptions and modifications as may &e specified in such law( and no such law shall &e deemed to &e an amendment of this 0onstitution for the purposes of article CVP$ 98'ED$ Committee for district .lanning$* (9) There shall &e constituted in e%ery State at the district le%el a District Planning 0ommittee to

consolidate the plans prepared &y the Panchayats and the .unicipalities in the district and to prepare a draft de%elopment plan for the district as a whole$ (B) The /egislature of a State may( &y law( make pro%ision with respect to@ (a) the composition of the District Planning 0ommitteesS (&) the manner in which the seats in such 0ommittees shall &e filled7 Pro%ided that not less than four@fifths of the total num&er of mem&ers of such 0ommittee shall &e elected &y( and from amongst( the elected mem&ers of the Panchayat at the district le%el and of the .unicipalities in the district in proportion to the ratio &etween the population of the rural areas and of the ur&an areas in the districtS (c) the functions relating to district planning which may &e assigned to such 0ommitteesS (d) the manner in which the 0hairpersons of such 0ommittees shall &e chosen$ (C) 3%ery District Planning 0ommittee shall( in preparing the draft de%elopment plan(@ (a) ha%e regard to@ (i) matters of common interest &etween the Panchayats and the .unicipalities including spatial planning( sharing of water and other physical and natural resources( the integrated de%elopment of infrastructure and en%ironmental conser%ationS (ii) the e)tent and type of a%aila&le resources whether financial or otherwiseS (&) consult such institutions and organisations as the +o%ernor may( &y order( specify$

(:) The 0hairperson of e%ery District Planning 0ommittee shall forward the de%elopment plan( as recommended &y such 0ommittee( to the +o%ernment of the State$ 98'E+$ Committee for ;etro.olitan .lanning$* (9) There shall &e constituted in e%ery .etropolitan area a .etropolitan Planning 0ommittee to prepare a draft de%elopment plan for the .etropolitan area as a whole$ (B) The /egislature of a State may( &y law( make pro%ision with respect to@ (a) the composition of the .etropolitan Planning 0ommitteesS (&) the manner in which the seats in such 0ommittees shall &e filled7 Pro%ided that not less than two@thirds of the mem&ers of such 0ommittee shall &e elected &y( and from amongst( the elected mem&ers of the .unicipalities and 0hairpersons of the Panchayats in the .etropolitan area in proportion to the ratio &etween the population of the .unicipalities and of the Panchayats in that areaS (c) the representation in such 0ommittees of the +o%ernment of India and the +o%ernment of the State and of such organisations and institutions as may &e deemed necessary for carrying out the functions assigned to such 0ommitteesS (d) the functions relating to planning and coordination for the .etropolitan area which may &e assigned to such 0ommitteesS

(e) the manner in which the 0hairpersons of such 0ommittees shall &e chosen$ (C) 3%ery .etropolitan Planning 0ommittee shall( in preparing the draft de%elopment plan(@ (a) ha%e regard to@ (i) the plans prepared &y the .unicipalities and the Panchayats in the .etropolitan areaS (ii) matters of common interest &etween the .unicipalities and the Panchayats( including coordinated spatial planning of the area( sharing of water and other physical and natural resources( the integrated de%elopment of infrastructure and en%ironmental conser%ationS (iii) the o%erall o&#ecti%es and priorities set &y the +o%ernment of India and the +o%ernment of the StateS (i%) the e)tent and nature of in%estments likely to &e made in the .etropolitan area &y agencies of the +o%ernment of India and of the +o%ernment of the State and other a%aila&le resources whether financial or otherwiseS (&) consult such institutions and organisations as the +o%ernor may( &y order( specify$ (:) The 0hairperson of e%ery .etropolitan Planning 0ommittee shall forward the de%elopment plan( as recommended &y such 0ommittee( to the +o%ernment of the State$ 98'E%$ Continuance of e4isting laws and ;unici.alities$* *otwithstanding anything in this Part( any pro%ision of any law relating to .unicipalities in force in

a State immediately &efore the commencement of the 0onstitution (Se%enty@fourth Amendment) Act( 988B( which is inconsistent with the pro%isions of this Part( shall continue to &e in force until amended or repealed &y a competent /egislature or other competent authority or until the e)piration of one year from such commencement( whiche%er is earlier7 Pro%ided that all the .unicipalities e)isting immediately &efore such commencement shall continue till the e)piration of their duration( unless sooner dissol%ed &y a resolution passed to that effect &y the /egislati%e Assem&ly of that State or( in the case of a State ha%ing a /egislati%e 0ouncil( &y each 2ouse of the /egislature of that State$ 98'EG$ Bar to interference by courts in electoral matters$* *otwithstanding anything in this 0onstitution(@ (a) the %alidity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies( made or purporting to &e made under article B:CAA shall not &e called in 'uestion in any courtS (&) no election to any .unicipality shall &e called in 'uestion e)cept &y an election petition presented to such authority and in such manner as is pro%ided for &y or under any law made &y the /egislature of a State$R A..endi4 Status of De%olution of Departments ? Su&#ects with Funds( Functions and

Functionaries to Panchayati "a# Institutions @ State wise Sl States?-Ts *o$ of Departments?Su&#ects Transferred to Panchayats with *o$of Departments?Su&#ects =et to &e Transferred to Panchayats with Funds Functions Functionarie s Funds Functions Functionarie s 9 Andhra Prd <6 9C <B B: 9V B; B Arunachal Prd$ @ @ @ B8 B8 B8 C Assam @ @ @ B8 B8 B8 : 4ihar @ @ @ B8 B8 B8 6 1harkhand @ @ @ B8 B8 B8 V +oa @ @ @ B8 B8 B8 ; +u#arat @ @ @ B8 B8 B8 P 2aryana @ 9V @ B8 9C B8 8 2imachal Prd$ <B BC <; B; <V BB 9< !arnataka B8 B8 B8 @ @ @ 99 !erala 96 B8 96 9: @ 9: 9B .adhya Prd$ 9< BC <8 98 <V B< 9C 0hattisgarh 9< BC <8 98 <V B< 9: .aharashtra 9P 9P 9P 99 99 99 96 .anipur @ BB <: B8 <; B6 9V ,rissa <6 B6 <C B: <: BV 9; Pun#a& @ <; @ B8 BB B8

9P "a#asthan @ B8 @ B8 @ B8 98 Sikkim B8 B8 B8 @ @ @ B< Tamil *adu @ B8 @ B8 @ B8 B9 Tripura @ 9B @ B8 9; B8 BB -ttar Prd$ 9B 9C <8 9; 9V B< BC -ttranchal 9B 9C <8 9; 9V B< B: J$4engal 9B B8 9B 9; @ 9; B6 AK* Islands @ @ @ B8 B8 B8 BV 0handigarh @ @ @ B8 B8 B8 B; DK* 2a%eli @ <C <C B8 BV BV BP DamanKDiu @ B8 @ B8 @ B8 B8 *0T Delhi Panchayati "a# System is yet to &e re%i%ed C< /akshadwee p @ <V @ B8 BC B8 C9 Pondicherry @ @ @ B8 B8 B8 The pro%isions of the ;Crd 0onstitution Amendment Act 988B are not applica&le to the States of 1ammu K !ashmir( .eghalaya( .i>oram and *agaland Source( ;inistry of "ural Develo.ment# )a-en from "e.ort of !or-ing Grou. on Decentralised Planning M Panchayti "a@ nstitutions for )he )enth %ive Hear Plan A..endi4 < Status of Second Set of State Finance 0ommissions (As on Decem&er B<<C) States?-Ts First State Finance 0ommission "emarks Sl$ *o$ 0onstituted on

"eport Su&mitted Jhether Accepted Second SF0 0onstituted on 9$ Andhra Pradesh BB$V$988: C9$6$988; Accepted P$9B$988P Third SF0 also setup on 9V$9$B<<C B$ Arunachal Pradesh B9$6$B<<C =et to &e su&mitted @@@ @@@ C$ Assam BC$V$988V B8$B$988; Partially 0onstituted :$ 4ihar April 988: @@@ @@@ 1une 9888 The State +o%t$ informed that the 9st SF0 could not make any recommendation due to %arious reasons$ The Bnd SF0 was constituted in 1une 9888 and reconstituted in Sept$ B<<B

6$ 0hhattisgarh Accepted recommendations of SF0 of .adhya Pradesh Fe&ruary B<<< V$ +oa BB$:$988: 6$V$9888 Partially accepted ;$ +u#arat 96$8$988: 9C$;$988P Accepted 98$99$B<<C P$ 2aryana C9$6$988: C9$C$988; Accepted V$8$B<<< 8$ 2imachal Pradesh B8$:$988: C<$99$988V Accepted B6$6$988P 9<$ 1harkhand The State +o%t$ has already cleared the proposal for setting up of SF0( &ut due some litigation pending in the 2igh 0ourt( it is held up$ The State +o%t$ has sought permission from the 2igh 0ourt to allow it to function properly$ As soon as the permission is granted &y the 0ourt the SF0 will come into e)istence$ 99$ 1ammu K

!ashmir Part IT@A is not applica&le to the State 9B$ !arnataka 9<$V$988: C<$;$988V Accepted B6$9<$B<<< 9C$ !erala BC$:$988: B8$B$988V Accepted BC$V$9888 9:$ .adhya Pradesh 9;$V$988: B<$V$988V Accepted 9;$V$9888 96$ .aharashtra BC$:$988: C9$V$988; Accepted BB$V$9888 9V$ .nipur 988V Su&mitted (date not indicated) Accepted with certain conditions B<<C The State +o%t$ has informed that the Bnd SF0 is preparing its report$ 9; .eghalaya 3)empted 9P$ .i>oram 3)empted 98$ *agaland 3)empted ;Crd Amendment Act under which SF0 is to &e set up( is not applica&le to *agaland$ 2owe%er( to implement ;:th 0AA the State has enacted *agaland

.unicipal Act( B<<9 which is under implementation$ The SF0 will &e set up only after the municipalities are constituted (which is likely &y .arch B<<:)$ B<$ ,rissa B9$99$988V C<$9B$988P Accepted 6$V$B<<C B9$ Pun#a& BB$:$988: C9$9B$9886 Accepted B9$8$B<<< BB$ "a#asthan BC$:$988: C<$9B$9886 Accepted ;$6$9888 BC$ Sikkim BB$;$988P 9V$P$9888 Accepted @@@ B:$ Tamil *adu BC$:$988: BV$99$988V Accepted 9$9B$9888 B6$ Tripura BC$:$988P Su&mitted Accepted B8$9<$9888 BV$ -ttar Pradesh BB$9<$988: BV$9B$988V Accepted B6$B$B<<< B;$ -ttaranchal C9$C$B<<9 Su&mitted in B<<B -nder consideration @@@ BP$ Jest 4engal C<$6$988: B;$99$9886 Accepted 1uly B<<< B8$ A K * Islands P$8$9886 BP$P$988P Accepted Decem&er B<<9 C<$ 0handigarh C$:$9886 C9$9B$988; @@@ 8$9$B<<9 C9$ Daman K Diu P$8$9886 BP$P$988P Accepted Decem&er B<<9 CB$ Dadra K *agar 2a%eli

P$8$9886 BP$P$988P Accepted Decem&er B<<9 CC$ Delhi April 9886 Decem&er 988P Accepted with some modifications 8$9$B<<9 C:$ /akshadweep P$8$9886 BP$P$988P Accepted Decem&er B<<9 C6$ Pondicherry 9B$C$988; Su&mitted -nder consideration -nder e)amination Bnd SF0 has &een set up7 B6 States Bnd SF0 not due7 B States (AP K -ttaranchal) 3)empted from setting up of SF07 C States (1K!( .eghalaya( .i>oram K *agaland) -nder e)amination for Bnd SF0 set up7 9 (Pondicherry) Bnd SF0 has not &een set up7 C States (+oa( 1harkhand and Sikkim) Source7 Taken from rural$nic$in( the .inistry of "ural De%elopmentHs we&site$ A..endi4 < "ecommendations of S%Cs State Sharing "e%enue +rants in Aids and other fiscal assistance Assigning Ta)es( fees( le%is Assam BO of state ta)es to &e transferred to local &odies

Transfer of 9<O of motor %ehicle ta) to local &odies AP (988;@B<<9) 9<$8CO of the ta) and non ta) re%enue of the state to panchayats Increase in per capita grants from "s$ 9 to : for +PsS "s$ 6 to for .Ps and "s$ B to : for DPs Ta) on telephones( Ta) on all %illage (+Ps) 2ouse ta) (+Ps) 2aryana /and con%ersion charges( stamp duty "oyalty on minor minerals Ta) on irrigated land( pump sets( tractors (DPs) 2ouse ta) (+Ps) !arnataka (988V@B<<9) CVO of non@loan gross re%enue receipts to &e shared with local &odies (P6O to P"Is and 96O to -/4s) 3armarked grant +Ps7 2ouse ta)( %acant land ta)( ta) on animal dri%en %ehicles !erala

(988V@B<<9) B6O of net collection of .otor Vehicle ta) proportion of the income from sell of court fee De%olution of plan grant to &e continued as followed &y the State Planning 4oard 9O of the state re%enue assigned for general purpose grants Various ta)es to +Ps "ationalisation of the e)isting ta)es (assigned &y the conformity act) of +Ps *o ta)es to .Ps or APs .P (988V@B<<9) :$B:O of state re%enue Forest "e%enue +rants to +Ps to discharge &asic functionsS tied and untied grantsS a lumsum non recurring grantS and agency fee for pro%iding agency function Agriculture produce sale( .aharashtra (988;@B<<9) 9< of profession ta) Ta) &y APs on non

agriculture land ,rissa (988P@B<<C) Surcharge on stamp duty for transfer of properties in rural areas 2ouse Ta) Pun#a& (988V@B<<9) B<O net proceed of stamp duty( motor %ehicle ta)( electricity duty( and entertainment ta) +Ps7 land re%enue (2owe%er( the ta) itself was repelled later)S mandatory ta) on professions( indi%iduals( 9<O of auction money on Pun#a& medium li'uor %end to .Ps B<O e)cise duty on Indian made foreign li'uor should &e share of +Ps and .Ps traders( commission and agents( and shopkeepers &ased on income sla&sS ta) on &rick kilns( rice shellers( stone crushers( petrol pumps( poultry farms dairy units( stud farms( fish farms( and small and large scale industries in

rural areaS BO of the %alue of goods sold from sellersS purchi fee from &uses "s$ 6 to 9<S house ta) on pucca houseS APs can le%y a ta) o on the sale of immo%a&le properties within the district at the rate of 9O of the sale price "a#asthan (9886@B<<9) B$9PO of the net proceed of the ta)es raised &y the state 6<O .atching grantS +o%t grant in aid to &e raised from "s$ 6 to "s$ 99 per head (9886@8V) .aintenance grant ("s$ 6<<< per annum to +Ps( "s$ 9<(<<< for .Ps and "s$ B<<<< for APsS 3sta&lishment grant A Financial 0orporation to pro%ide loan to P"Is (not esta&lished yet) 9< to 6<O ta) on land rent could &e imposed &y .Ps /and re%enue on &arani land to APs which can &e shared &y P"Is APs should le%y 9O

surcharge on the sale of land in rural areas and <$6O surcharge on market fee *ominal ta) on ha%elis( &ig houses@not mentioned whether +P or AP should le%y this ta) Ta) on dha&as( hotel( automo&il ser%icing shops( petrol?diesal pumps( on the highways in their areas Tamil *adu (988;@B<<B) PO of total states re%enue collection during 988;@8P 9BO during B<<9@<B 96O of resource de%olution as Ge'ualisation and incenti%eH fund /ocal 0ess surcharge on stamp duty to panchayatsS 8<O of entertainment ta)S Jater ta)( social forestry Tripura 9<O of state share of central ta) to Aila Panchayat (AP)( PO to Panchayat Samiti (PS) and BO to +ram Panchayats (+Ps) 6<O of the re%enue earned

from sales ta)( additional ta)( purchase ta)( and lu)ury ta) to panchayats CBO of state agri@income to intermediate tier -ttar Pradesh (988V@B<<9) CO of re%enue receipts of state go%ernment Ta) on pump sets( Ta) on tractors Jest 4engal 9VO of net process of all the ta)es collected &y the state 3ntertainment ta)( Ag$ Produce sale fee for DPs( Irrigation rates Sources( Com.iled from "a@araman (9===)# ?ommen (1223) and Chandreshe-har (ed$) (1222) *otes7 9$ DPs District Panchayat (also known as Aila Parishad or Aila panchayat) B$ .Ps .iddle le%el Panchayat (known as 4lock Panchayat( Panchayat Samiti and Taluka Panchayat in %arious states) C$ +Ps +ram Panchayats :$ .Ps ha%e not &een assigned any ta) e)cept for "a#asthan$

6$ The period for which the SF0s made recommendations is mentioned in the &rackets (9st column)$ A..endi4 < ;a@or recommendations of +%C (i) Amending Article B:C(I) in order to synchronise the a%aila&ility of the SF0s reports to the 3F0( focusing on specific chapters in the SF0s reports keeping in %iew the terms listed in Article B:C(I) and B:C(=) of the 0onstitution so as to make findings of the SF0s more useful to the 3F0$ Ta&ling of SF0s findings and action taken report (AT") on the floor of the state legislature within si) months$ (ii) Deletion of words Don the &asis of the recommendations made &y the Finance 0ommission of the state appearing in su&@clauses (&&) of the Article BP<(C) of the 0onstitution in order to pro%ide freedom for Finance 0ommission to recommend financial de%olution to those states where either SF0s ha%e not &een constituted or ha%e not su&mitted their reports$ (iii) Imposition of ta)es on land?farm income in suita&le form to strengthen the resource &ase of the local &odiesS le%y?cess on land@&ased ta)es and other ta)es?duties and de%olution of the same to local &odies for augmentation of specific ci%ic ser%icesS and

imposition of professional ta) either &y state go%ernment or local &odies$ 3)ploitation of full potential of property ta)?house ta)$ (i%) Periodical re%ision of the rate structure of the user charges le%ied &y the panchayats$ (%) "e%iewing the e)isting accounting heads( etc( prefera&ly in consultation with comptroller and auditor general (0KA+) of accounts for ensuing uniformity among the states( %esting control and super%ision o%er the maintenance of accounts in 0KA+ and contracting out the upkeep of accounts to outside agencies?persons where the panchayats do not ha%e trained staff$ (%i) 3armarking an amount of half percent of total e)penditure incurred &y the panchayats for 0KA+ for audit purpose and earmarking of "s :(<<< per panchayat per annum on an a%erage to meet the e)penditure on maintenance of accounts on contract &asis$ (%ii) 4uilding data &ase on the finances of the panchayats with the help of V SAT (the satellite &ased information network) at district( state and central le%els and in%ol%ement of 0KA+ at all stages$ (%iii) A total grant of "s 9(V<< crore for the panchayats for each of the year starting from the financial year B<<<@<9( inter se distri&ution of grants among the states for the

panchayats &ased on the rural?ur&an population of the state (:< per cent)( inde) of decentralisation (B< per cent)( distance from the highest per capita income (B< per cent)( re%enue efforts of the local &odies (9< per cent) and geographical area (9< per cent)$ (i)) Transfer of functions and power in accordance with B:C(+) read with TI Schedule( specifically mentioning in the state panchayat acts as well as clear@cut demarcation of the functions of all tiers of the panchayats$ ()) In order to award panchayats functional( financial and administrati%e freedom in their operations and ministry of rural de%elopment should remo%e all impediments and take initiati%es for transferring the schemes to the panchayats$ ()i) 4ringing out suita&le legislations in order to impro%e user charges for go%ernment properties of the central as well as state go%ernments$ A..endi4 < Status of District Planning Committees (/.dated on December 11# 9==') S l States?-Ts Jhether the DP0 setup If not the Status 9 Andhra Pradesh

=es B Arunachal Pradesh The constitution of DP0s shall &e after appro%al of Town and 0ountry Planning Act of the State( which is under consideration$ C Assam 0onstitution of DP0s is under progress : 4ihar 0onstitution of DP0s is under progress 6 +oa =es V +u#arat State go%ernment has informed that the District Panning 4oards set up in each district are functioning as per the re'uirements laid in article B:C AD relating to DP0s ; 2aryana =es P 2imachal Pradesh =es 8 1 K ! State go%t$ has informed that there is no pro%ision of DP0s in the State$ District De%elopment 4oards in each district under single line administration has &een under operation since 98;V$ (*ot applica&le) 1harkhand DP0s will &e formed as soon as elections of the P"Is are held$ 9< !arnataka =es 99 !erala =es 9B .adhya Pradesh =es 9C .aharashtra =es 9: .anipur =es

96 .eghalaya *ot applica&le 9V .i>oram *ot applica&le 9; *agaland District Planning and De%elopment 4oards in f ti function 9P ,rissa =es 98 Pun#a& Action initiated to constitute DP0s B< "a#asthan =es B9 Sikkim BB Tamil *adu =es BC Tripura 4ill for DP0s is pending in the State assem&ly B: -ttar Pradesh =es =es$ .inisters are 0hairpersons$ B6 Jest 4engal =es BV AK* Islands =es B; 0handigarh 0handigarh administration has informed that they are considering the to set DP0 BP DK* 2a%eli =es B8 Daman K Diu =es @@ C< *0T Delhi 3)empted C9 /akshadweep =es CB Pondicherry 3lections not held DP0 set up 98 States?-Ts -nder consideration V States?-Ts *ot set up due to non@election B States (1harkhand and Pondicherry) District Planning 4oards working as DPs B States (+u#rat and *agaland) Source7 .inistry of "ural De%elopment( taken from the .inistryHs we&site (www$rural$nic$in)

A..endi4 < %/NC) ?NS ASS GN+D )? )F+ PANCFAHA) "AG NS) )/) ?NS N 7+"ACA $ <illage Panchayats A$ ;andatory functions of <illage Panchayats 9$ "egulation of &uilding construction B$ Protection of pu&lic land from encroachment C$ Protection of traditional drinking water sources$ :$ Presentation of ponds and other water &odies 6$ .aintenance of water@ways and canals under their charge V$ 0ollection and disposal of solid waste and control of li'uid waste disposal ;$ Strom water drainage P$ .aintenance of en%ironmental hygiene 8$ .anagement of markets 9<$ Vector control 99$ "egulation of slaughtering of animals and sale of meat( fish and other perisha&le food items 9B$ "egulation of eating esta&lishments 9C$ Pre%ention of food adulteration 9:$ .aintenance of roads and other pu&lic assets 96$ Street lighting and their maintenance 9V$ Immunisation 9;$ 0arrying into effect national and State le%el strategies and programmes for disease pre%ention and control 9P$ ,pening and maintenance of &urial and &urning grounds 98$ /icensing of dangerous and offensi%e trades

B<$ "egistration of &irths and deaths B9$ Pro%ide &athing and washing ghats BB$ Pro%ide of ferries BC$ Pro%ide parking space for %ehicles B:$ Pro%ide waiting@shed for tra%ellers B6$ Pro%ide toilet facilities in pu&lic places BV$ "egulate conduct of fairs and festi%als B;$ /icensing of pet dogs and destroying stray dogs B$ General %unction 9$ 0ollection and updating of essential statistics B$ ,rganising %oluntary la&our and contri&ution for community works C$ 0arrying out campaigns for thrift :$ Awareness &uilding on control of social e%ils like drinking( consumption of narcotics( dowry and a&use of women and children 6$ 3nsuring ma)imum peopleHs participation in all stages of de%elopment V$ ,rganising relief during natural calamities ;$ Inculcating en%ironmental awareness and moti%ating local action for en%ironmental upgradation P$ Promoting 0o@operati%es 8$ 3nhancing communal harmony 9<$ .o&ilising local resources in cash and in kind( including free surrender of land for de%elopmental purposes 99$ Spreading legal awareness among the weaker sections 9B$ 0ampaigning against economic crimes 9C$ ,rganising neigh&ourhood groups and self@help groups with focus on the poor

9:$ Awareness &uilding on ci%ic duties C$ Sector*wise distribution of res.onsibilities (i) Agriculture 9$ 4ring into culti%ation waste lands and marginal lands B$ 4ring a&out an optimum utilisation of land C$ Soil conser%ation :$ Production of organic manure 6$ 3sta&lishment of nurseries V$ Promotion of co@operati%e and group farming ;$ ,rganising self@help groups among culti%ators P$ Promotion of horticulture and %egeta&le culti%ation 8$ Fodder de%elopment 9<$ Plant protection 99$ Seed production 9B$ Farm mechanisation 9C$ .anagement of !rishi 4ha%ans (ii) Animal Fusbandry and Dairy 9$ 0attle impro%ement programmes B$ Dairy farming C$ Poultry farming$ 4ee keeping( piggery de%elopment( goat rearing( ra&&it rearing :$ "unning of %eterinary dispensaries 6$ "unning of I0DP su&@centres V$ Pre%enti%e health programmes for animals ;$ Pre%ention of cruelty to animals P$ Fertility impro%ement programmes 8$ 0ontrol of diseases of animal origin (iii) ;inor rrigation All minor irrigation schemes within the area of Village Panchayat 9$ All micro irrigation schemes

B$ Jater conser%ation (iv) %isheries 9$ De%elopment of fisheries in ponds and fresh water and &rackish water fish culture( mari culture B$ Fish seed production and distri&ution C$ Distri&ution of fishing implements :$ Fish marketing assistance 6$ Pro%ision of &asic ser%ices for the families of fishermen V$ Jelfare schemes for fishermen (v) Social %orestry 9$ "aising of fodder( fuel and fruit trees B$ ,rganising campaigns for tree planting and en%ironmental awareness C$ Afforestation of waste lands (vi) Small Scale ndustries 9$ Promotion of cottage and %illage industries B$ Promotion of handicrafts C$ Promotion of traditional and mini industries (vii) Fousing 9$ Identification of homeless people and poram&oke dwellers and pro%ide house sites and houses$ B$ Implementation of rural housing programmes$ C$ Implementation of shelter upgradation programmes$ (viii) !ater Su..ly 9$ "unning of water supply schemes co%ering one %illage panchayat B$ Setting up of water supply schemes co%ering one %illage panchayat (i4) +lectricity and +nergy

9$ Street lighting B$ Promotion of 4io@gas (4) +ducation 9$ .anagement of +o%ernment pre@primary schools and +o%ernment primary schools B$ /iteracy programmes (4i) Public !or-s 9$ 0onstruction and maintenance of %illage roads within the %illage panchayat$ B$ 0onstruction of &uildings for institutions transferred (4ii) Public Fealth and Sanitation 9$ .anagement of dispensaries and primary health centres and su&@centres (in all systems of medicine)$ B$ .anagement of child welfare centres and maternity homes C$ Immuni>ation and other pre%enti%e measures :$ Family Jelfare 6$ Sanitation (4iii) Social !elfare 9$ "unning of anganwadies B$ Sanctioning and distri&ution of pensions of destitute( widows( handicapped and agricultural la&ourers$ C$ Sanctioning and distri&ution of unemployment assistance$ :$ Sanctioning and assistance for marriage of the daughters of widows$ 6$ .anagement of group insurance scheme for the poor$ (4iv) Poverty Alleviation 9$ Identification of the poor

B$ Self employment and group employment schemes for the poor especially women C$ Pro%iding community assets of continuing &enefit to the poor$ (4v) Scheduled Castes and Scheduled )ribes Develo.ment 9$ 4eneficiary oriented schemes under S0P and TSP$ B$ .anagement of nursery school for Scheduled 0astes and Scheduled Tri&es$ C$ Pro%ision of &asic amenities in Scheduled 0astes and Scheduled Tri&es ha&itats$ :$ Assistance to Scheduled 0astes and Scheduled Tri&es students$ 6$ Discretionary assistance to Scheduled 0astes and Scheduled Tri&es in need$ (4vi) S.orts and Cultural Affairs 9$ 0onstruction of play grounds (4vii) Public Distribution System 9$ 3)amination of complaints against the pu&lic distri&ution system and taking of remedial measures$ B$ ,rganisation of campaigns against weights and measures offences$ C$ +eneral super%ision and guidance of ration shops and ma%eli stores and other pu&lic distri&ution centres and if necessary starting new pu&lic distri&ution centres$ (4viii) Natural Calamities "elief 9$ .anagement of relief centres B$ ,rganisation of relief works

("epair works to assets will &e di%ided and carried out &y the Panchayat in charge of the assets) (4i4) Co*o.eratives 9$ ,rganisation of co@operati%es within the #urisdiction of the Panchayat$ B$ Payment of +o%ernment grants and su&sidies within the #urisdiction$ $ Bloc- Panchayats A$ General %unctions 9$ Pool technical e)pertise &oth +o%ernment and non@ go%ernment at the 4lock le%el$ B$ Pro%ide technical ser%ices to Village Panchayats$ C$ Prepare plans after taking into account the plans of Village Panchayat to a%oid duplication and pro%ide the &ackward and forward linkages$ B$ Sector*wise distribution of res.onsibilities (i) Agriculture 9$ FramersH training for the programmes implemented at the %illage le%el$ B$ Arrangements of agricultural inputs re'uired for schemes at the %illage le%el$ C$ 0onduct of agricultural e)hi&itions$ :$ Integrated watershed management in watersheds falling within 4lock Panchayat area$ 6$ .o&ilise agricultural credit$ V$ Sericulture$ (ii) Animal Fusbandry and Dairy 9$ "unning of Veterinary Polyclinics and "egional Artificial Insemination 0entres$

B$ Pro%ide speciality ser%ices in Animal 2us&andry$ C$ 0onduct cattle and poultry shows$ (iii) ;inor rrigation All lift irrigation schemes and minor irrigation schemes co%ering more than one %illage Panchayat (iv) %isheries De%elopment of traditional landing centres$ (v) Small Scale ndustries 9$ Setting up of minor industrial estates$ B$ Promotion of industries with in%estment of one@third of SSI$ C$ Self employment schemes in industrial sector$ (vi) Fousing 9$ Popularisation of low cost housing B$ Promotion of housing co@operati%e societies (vii) +lectricity and +nergy Promotion of non@con%entional energy sources (viii) +ducation .anagement of Industrial Training Institutes (i4) Public !or-s 9$ 0onstruction and maintenance of all %illage roads connecting more than one Village Panchayat and other District "oads within the 4lock Panchayat$ B$ 0onstruction of &uildings for institutions preferred$ (4) Public Fealth and Sanitation .anagement of community health centres and taluk hospitals within the 4lock Panchayat area in all systems of medicine (4i) Social !elfare .anagement of I0DS

(4ii) Poverty Alleviation 9$ Planning and implementation of 3mployment Assurance Schemes in co@ordination with the Village Panchayats B$ Skill upgradation of the poor for self employment and wage employment for people &elow po%erty line (4iii) Scheduled Castes and Scheduled )ribes Develo.ment 9$ .anagement of pre@matric hostels B$ Promoting Scheduled 0astes and Scheduled Tri&es 0o@ operati%es (4iv) Co*o.eratives 9$ ,rganisation of co@operati%es within the #urisdiction of 4lock Panchayat B$ Payment of +o%ernment grants and su&sidies within the #urisdiction $ District Panchayats A$ General %unctions 9$ .o&ilise the technical e)pertise a%aila&le from +o%ernment and non@go%ernment institutions B$ Pro%ide technical ser%ice to the 4lock Panchayats and Village Panchayats and the .unicipalities C$ Prepare plans after taking into account the plans of the Village Panchayats and 4lock Panchayats to a%oid duplication and to pro%ide &ackward and forward linkage B$ Sector*wise distribution of res.onsibilities (i) Agriculture

9$ "unning of agricultural farms other than regional farms and research centres and esta&lishment of new farms B$ Integrated watershed management in watersheds co%ering more than one 4lock Panchayat area C$ Pro%ision of agricultural inputs :$ Soil testing 6$ Pest control V$ .arketing of agricultural produce ;$ 0ulti%ation of ornamental plants P$ Promotion of agricultural co@operati%es 8$ Promotion of commercial crops 9<$ 4iotechnology applications 99$ Field trails and pilot pro#ects to popularise inno%ation 9B$ /ocally appropriate research and de%elopment (ii) Animal Fusbandry and Dairy 9$ .anagement of district le%el %eterinary hospitals and la&oratories B$ .anagement of dairy e)tension ser%ice units C$ Promotion of milk co@operati%es :$ .anagement of farms other than regional farms( &reeding farms and research centres 6$ District le%el training V$ Implementation of disease pre%ention programmes ;$ Field trails and pilot pro#ects on inno%ati%e practices P$ /ocally rele%ant research and de%elopment (iii) ;inor rrigation 9$ De%elopment of ground water resources B$ 0onstruction and maintenance of minor irrigation schemes co%ering more than one 4lock

Panchayat C$ 0ommand area de%elopment (iv) %isheries 9$ Arrangements for marketing of fish B$ .anagement of Fish Farm De%elopment Agency C$ .anagement of district le%el hatcheries( net making units( fish markets( feed mills( ice plants and cold storages :$ .anagement of fisheries schools 6$ Introduction of new technologies V$ Pro%ide inputs re'uired for fishermen ;$ Promotion of fishermenHs co@operati%es (v) Small Scale ndustries 9$ .anagement of District Industries 0entre B$ Promotion of small scale industries C$ Setting up of industrial estates :$ Arranging e)hi&itions for sale of products 6$ 3ntrepreneur de%elopment programmes V$ .arketing of products ;$ Training P$ Input ser%ice and common facility centres 8$ Industrial de%elopment credit planning (vi) Fousing 9$ 2ousing comple) and infrastructure de%elopment B$ .o&ilising housing finance (vii) !ater Su..ly 9$ "unning of water supply schemes co%ering more than one Village Panchayat B$ Taking up of water supply schemes co%ering more than one Village Panchayat (viii) +lectricity and +nergy

9$ Taking up micro@hydel pro#ects B$ Determining priority areas for e)tension of electricity (i4) +ducation 9$ .anagement of +o%ernment high schools (including /P section and -P section attached to high schools) B$ .anagement of +o%ernment higher secondary schools C$ .anagement of +o%ernment technical schools :$ .anagement of %ocational training centres and polytechnics 6$ .anagement of %ocational 2igher Secondary Schools V$ .anagement of District Institute for 3ducation and Training ;$ 0o@ordinate centrally and State sponsored programmes related to education (4) Public !or-s 9$ 0onstruction and maintenance of all district roads other than State 2ighways( *ational 2ighways and .a#or District "oads B$ 0onstruction of &uildings for institutions transferred (4i) Public Fealth and Sanitation 9$ .anagement of district hospital in all systems of medicine B$ Setting up of centres for care of special categories of disa&led and mentally ill people C$ 0o@ordination of centrally and State Sponsored programme at the district le%el (4ii) Social !elfare 9$ Payment of grants to orphanages B$ Starting of welfare institutions for the disa&led( destitute etc$

(4iii) Poverty Alleviation Pro%iding infrastructure for self@employed programmes (4iv) Scheduled Castes and Scheduled )ribes Develo.ment 9$ .anagement of post matric hostels B$ .anagement of %ocational training centres for Scheduled 0astes and Scheduled Tri&es (4v) S.orts and Cultural Affairs 0onstruction of stadiums (4vi) Co*o.eratives 9$ ,rganisation of co@operati%es within the #urisdiction of District Panchayats$ Payment of +o%ernment grants and su&sidies to co@operati%es within the #urisdiction A..endi4 K %unctions and Powers of P" s under the "a@asthan Panchayati "a@ Act# 1228 Sections 6< to 6B of the "a#asthan Panchayati "a# Act lay down the functions and powers of the three tiers of P"Is$ These sections mention that su&#ect to such conditions as may &e prescri&ed &y the state go%ernment from time to time these institutions shall perform the functions and e)ercise the powers gi%en in First( Second and the Third Schedule$ 4elow is the list of the functions in the three Schedules7 The First Schedule7 Functions and Powers of +ram Panchayats

a$ +eneral Functions &$ Administrati%e Functions c$ Agriculture including Agriculture 3)tension d$ Animal 2us&andry( Dairying and Poltry e$ Fisheries f$ Social and Farm Forestry g$ .inor Irrigation h$ !hadi( Village and 0otton Industry i$ "ural 2ousing #$ Drinking Jater k$ "oads( 4uildings( 0ul%erts( 4ridges( Ferries( Jaterways( and other .eans of 0ommunications l$ "ural 3lectrification including Pro%iding for the maintenance of /ighting of Pu&lic Streets and other Places m$ *on@0on%entional 3nergy Sources n$ Po%erty Alle%iation Programme o$ 3ducation (Primary) p$ Adult and *on@Formal 3ducation '$ /i&raries r$ 0ultural Acti%ities s$ .arkets and Fairs t$ "ural Sanitation u$ Pu&lic 2ealth and Family welfare %$ Jomen and 0hild De%elopment w$ Social Jelfare including Jelfare of the 2andicapped and .entally "etarded )$ Jelfare of the Jeaker Sections and in particular the Schedule

0astes and Schedule Tri&es y$ Pu&lic Distri&ution System >$ .aintenance of 0ommunity Assets aa$ 0onstructions and .aintenance of Dhramshalas and similar Institutions &&$ 0onstruction and .aintenance of 0attle Shades( Ponds( and 0art Stands cc$ 0onstruction and .aintenance of Slaughter 2ouses dd$ .aintenance of Pu&lic Parks( Playgrounds etc$ ee$ "egulation of .anure Pits and Pu&lic Places ff$ "egulation of /i'uor Shops gg$ +eneral Powers of the Panchayats The Second Schedule7 Functions and Powers of panchayat Samitis 9$ +eneral Functions B$ Agriculture including Agriculture 3)tension C$ /and Impro%ement and Soil 0onser%ation :$ .inor Irrigation( Jater .anagement and Jatershed De%elopment 6$ Po%erty Alle%iation Programmes V$ Animal 2us&andry( Dairying and Poultry ;$ Fisheries P$ !hadi( Village and 0otton Industries 8$ "ural 2ousing 9<$ Drinking Jater 99$ Social and farm Forestry( Fuel and Fodder 9B$ "oads( 4uildings( 0ul%erts( 4ridges( Ferries( Jaterways( and other .eans of 0ommunications

9C$ *on@0on%entional 3nergy Sources 9:$ 3ducation including Primary Schools 96$ Technical Training and Vocational Training 9V$ Adult and *on@Formal 3ducation 9;$ 0ultural Acti%ities 9P$ .arkets and Fairs 98$ 2ealth and Family Jelfare B<$ Jomen and 0hild De%elopment B9$ Social Jelfare including Jelfare of the 2andicapped and .entally "etarded BB$ Jelfare of the Jeaker Sections and in particular the Schedule 0astes and Schedule Tri&es BC$ .aintenance of 0ommunity Assets B:$ Statistics B6$ 3mergency "elief BV$ 0o@operation B;$ /i&raries BP$ Super%ision of and +uidance to the Panchayats in all their Acti%ities and Formulation of Village and Panchayat Plans B8$ .iscellaneous C<$ +eneral Powers of the Panchayat Samiti The Third Schedule7 Functions and Powers of Aila Parishads 9$ +eneral Functions B$ Agriculture C$ .inor Irrigation( +round Jater "esources and Jatershed De%elopment :$ 2orticulture

6$ Statistics V$ "ural 3lectrification ;$ Soil 0onser%ation P$ Social Forestry 8$ Animal 2us&andry and Dairying 9<$ Fisheries 99$ 2ousehold and 0ottage Industries 9B$ "ural "oads and 4uildings 9C$ 2ealth and 2ygiene 9:$ "ural 2ousing 96$ 3ducation 9V$ Social Jelfare and Jelfare of Jeaker Sections 9;$ Po%erty Alle%iation Programmes 9P$ Social "eform Acti%ities 98$ +eneral Powers of the Ailla Parishad "eferences( Astha( B<<:( +aon +anra##ya Torna 0ase Study( -npu&lished paper (2indi)( -daipur 4andypadhyay( D( B<<<( Planning From 4elow7 Is Planning 0ommission "eady 0handreshekhar( 4 !( (ed$)( 9888( Panchayati "a# in India( Status "eport 9888( "a#i% +andhi Foundation( *ew Delhi 0hathukulam +oI( 3le%enth Finance 0ommission "eport( a%aila&le on http7??fincomindia$nic$in +o!( Planning K 3conomic Affairs Department( The 3conomic "e%iew http7??www$kerala$go%$in?deptMplanning?ecnomicr%wM9B$ht m

+o!( B<<C( /ocal +o%ernments in !erala( "eforms( Decentralised De%elopment and /ocal +o%ernment Finances( +o!( Thiru%ananatpuram +oI( .o"D( B<<9( "eport of Jorking +roup on Decentralised Planning and Panchayati "a# Institutions( *ew Delhi +oI( .o"D( .o"DHs we&site7 rural$nic$in +o!( B<<Ca( Appendi) IV7 Details of Pro%isions( 3armarked to Panchayat "a# ? *agarpalika Institutions( in the 4udget B<<C@<: +o"( B<<9( "eport of the II State Finance 0ommission( +o"( 1aipur +upta( D *( B<<C( "eforms K e)penditure efficiency( in the 3conomic Times( dated ,cto&er C9( B<<C I+IP"K"D( B<<C( Panchayati "a# sansthaon ka sashakttikaran (a collection of go%ernment orders etc$)( Indira +andhi Institute of Panchayati "a# and "ural De%elopment( 1aipur Isaac( Thomas T$ .$( B<<<( /ocal Democracy and De%elopment( /eftJord( Delhi 1ohnson( 0raig( B<<C( Decentralisation in India7 Po%erty( Politics and Panchayati "a#( ,%erseas De%elopment Institute( a%aila&le on www$li%elihoodinfo$net !erala Panchayat "a# Act( 0entre for /egal 3ducation K De%elopment Studies( Thiru%anathapuram .ahi Pal( B<<<( 99th Finance 0ommission7 Transforming Panchayats( 3PJ

dated Decem&er 8( B<<< .ohankumar( S( B<<B MMMMMMMMMM( B<<C( Decentralisation in !erala7 PeopleHs Plan( 3PJ( dated 1uly BV( B<<C ,ommen( .$ A$( 988P( De%olution of "esources to "ural 4odies7 A comparati%e study of select State Finance 0ommission "eports( Institute of Social Sciences( *ew Delhi MMMMMMMMM( B<<<( 3le%enth Finance 0ommissionHs Transfer System and /ocal 4odies7 A 0riti'ue( Institute of Social Sciences( *ew Delhi Pandey( 1( B<<C( Fiscal Federalism in India7 An insight into 0oncept and Structure of Sales Ta)ation( a%aila&le on( http7??www$legalser%iceindia$com?articles?fiscal$htm Parker( Andrew *$( 9886( Decentrali>ation7 The Jay Forward for "ural De%elopment^( Jorld 4ank Patnaiak( Pra&hat( B<<:( A Theoretical *ote on !erala@ style Decentralised Planning( unpu&lished paper "aghuram( Sho&ha( B<<<( !eralaHs Democratic Decentralisation7 2istory in the .aking( 3PJ( dated 1une 9;( B<<C "a#araman( Indira( B<<B( +rowth Accelerating Fiscal De%olution to the Third Tier( *IPFP( *ew Delhi "a#araman( Indira( , P 4ohra( and V S "engthatan( 988V Augmentation of

Panchayat "esources( 3PJ( dated .ay <:( 988V Singh( Virendra( /og( Akal aur Jard Sa&hayen (2indi)( in Astha (undated)( Aamini Pra#atantra7 Vichar aur Prayas( Astha( -daipur -*DP( undated( Decentralisation in India 0hallenges and ,pportunities( -*DP( a%aila&le on http7??hdrc$undp$org$in -nnati( B<<<( Status of Pachayati "a# Institutions in "a#asthan (988:@88)( -nnati( 1odhpur Vyasulu( B<<<( Introduction( in Decentralisation from A&o%e( 04PS( 4anglore Vyasulu( B<<<( Panchayat Finances( in Decentralisation from A&o%e( 04PS( 4anglore Documents collected from the selected P" s 7erala( Annual 4udget B<<C@<:( !ollam District Panchayat Annual 4udget B<<C@<:( Thrikko%ali%attam +ram Panchayat Annual 4udget B<<C@<:( ,achira 4lock Panchayat Annual Financial Statement ,achira +ram Panchayat Annual Financial Statement B<<B@<C( Palakkad District Panchayat Annual 4udget B<<C@<:( *agalessary +ram Panchayat Annual 4udget B<<C@<:( .alampu>ha 4lock Panchayat "a@asthan( Annual %inancial Statements -daipur Aila Parishad @ B<<B@<C( B<<9@<B( B<<<@<9 1hadol Panchayat Samiti @ B<<B@<C( B<<9@<B( B<<<@<9 4adgaon Panchayat Samiti @ B<<B@<C( B<<9@<B( B<<<@<9

1odhpur Aila Parishad @ B<<B@<C( B<<9@<B( B<<<@<9 .andor Panchayat Samiti @ B<<B@<C( B<<9@<B( B<<<@<9 *anda !alan +ram Panchayat @ B<<B@<C( B<<9@<B( B<<<@<9 4anad +ram Panchayat @ B<<B@<C( B<<9@<B( B<<<@<9 Annual "eport of Aila Parishad -daipur( for the =ear B<<B@ <C