The Twelfth Finance Commission (TFC) has recommended grants amounting to Rs. 25,000 crore ( Rs. 20,000 crore for Panchayats and Rs. 5,000 crore for Municipalities) payable during the period 2005 to 2010 to States for giving to rural and urban local bodies. The grant should be used by PRIs to improve water supply and sanitation through the takeover of water supply assets created under the Swajaldhara Programme. This was stated here today by Shri Wajahat Habibullah, Secretary, Ministry of Panchayati Raj while addressing the third meeting of the Committee of Chief Secretaries and Secretaries of Panchayati Raj. Presentations on Rural Business Hubs, Scheme for strengthening the distribution network of PDS kerosene involving Panchayati Raj Institutions, National Mission of the Youth and Panchayat and Development Radars based on district level planning on participatory basis. The meeting was also attended by senior officials from Finance, Planning Commission and representatives from the Confederation of Indian Industry (CII). The allocation among various Municipalities and Panchayati Raj Institutions and also autonomous councils in excluded areas would be made by the States.
According to the guidelines issued by the Ministry of Finance for release of funds to States and Union Territories as recommended by the Twelfth Finance Commission, funds will be allocated in two equal installments in July and January in every financial year. The pre-condition for the first release is that the States must provide district wise details of the allocation of these funds to Panchayats in prescribed formats. The second installment of 2005-06 onwards will be released on the receipt of break up of the allocation to all PRIs at all levels before October 31, 2005, and a certificate from the State Finance Secretary on the date and amounts of grants released to PRIs.
States have to transfer the grants released by the centre to the PRIs within 15 days of funds being credited to States’ account, failing which they have to transfer to PRIs interest at a rate equal to the RBI bank rate along with the delayed transfer of grants. The State Governments will have to constitute a High Level Committee (HLC) headed by the Chief Secretary with the Finance Secretary and the Secretaries of Departments concerned as members to ensure proper utilization of local body grants. The money will be transferred through the National Panchayat Portal developed by the National Informatics Centre (NIC) which has developed a system for providing data on allocation and expenditure of the funds released to PRIs. The software also provides for adequate safeguard so that the allocation to individual Gram Panchayat could not be tempered with.
Controller and Auditor General of India will be auditing the release and use of local bodies grants. Government of India has the powers to take appropriate decision on withholding grants of a State on recommendation by CAG in case of failure of allocation of funds to PRIs by the State Governments or for utilization of such funds for purposes other than that for which it has been specifically earmarked.
SBK:CP:panchayatiraj(TFC)9.9
(Release ID :11903)