(a) whether the Twelfth Finance Commission has recommended Rs.25,000 crores grant for
local bodies between 2005 and 2010;
(b) if so, the details of the grants likely to be received by the Panchayati Raj Ministry;
(c) the details of the schemes likely to be executed with the help of such grant;
(d) whether any action plan has been prepared for this purpose; and
(e) if so, the details thereof?
MINISTER OF THE STATE IN THE MINISTRY OF PANCHAYATI RAJ (SHRI MANI SHANKAR AIYAR)
(a): Yes, Sir. The Twelfth Finance Commission has recommended Rs.25,000 crores payable
during the period 2005-10 for local bodies to augment the Consolidated Funds of the States
to supplement the resources of these bodies. Of this, Rs.20,000 crore is meant for Panchayati
Raj Institutions and Rs.5,000 crore for Urban Local Bodies.
(b): Grants under the 12th Finance Commission are directly released to Panchayati Raj
Institutions, through State Governments, by the Ministry of Finance. No funds have been
placed at the disposal of the Ministry of Panchayati Raj for this purpose.
(c), (d) & (e): The grants recommended by the Central Finance Commissions are untied grants.
However, the recommendations of the Twelfth Finance Commission as contained in the Guidelines
issued by the Ministry of Finance are to be kept in view in the utilization of the grants. To
ensure that the grants are properly used by Panchayats, a three-tier structure is in place. A
High Level Monitoring Committee (HLC) in each State has been constituted, headed by the Chief
Secretary with the Finance Secretary and the Secretaries/heads of Departments as members, for
monitoring the proper utilization of these grants. The HLC meets once every quarter to review
the utilization of grants. Then there is a Review Committee headed by the Secretary, Ministry
of Panchayati Raj, Government of India, which periodically monitors the releases of grant
moneys to the State Governments and further to the Panchayats. At the Apex level, there is a
Central Review Committee headed by Secretary, Ministry of Finance, Department of Expenditure
which reviews the releases and utilization of grants. The Committee includes representatives
from the Ministry of Panchayati Raj, the Ministry of Urban Development and Poverty Alleviation,
the Ministry of Home Affairs and the Ministry of Finance (Department of Expenditure). As per
the mandate of the Twelfth Finance Commission, the Comptroller and Auditor General of India
audits the release and utilization of local bodies grants.