(a) whether the local bodies both in urban and rural areas will get a percentage
share of Union Taxes;
(b) if so, the details thereof;
(c) the guidelines so far worked out area-wise for both urban and rural area in
this regard; and
(d) the involvement of the local panchayats therein?
Minister of State in the Ministry of Finance(SHRI NAMO NARAIN MEENA)
(a)&(b) The 13th Finance Commission (FC-XIII) has recommended a basic grant and a performance
grant for local bodies during its award period, 2010-15. For every year of the award period,
FC-XIII has recommended a basic grant amounting to 1.5% of the size of divisible pool in the
preceding year. Similarly, for 2011-12, FC-XIII has recommended a performance grant of 0.5% of
the divisible pool of the preceding year and 1% for subsequent years of its award period.
FC-XIII has also recommended a separate special areas basic grant of Rs.20 per capita, carved
out of the total basic grant, for Schedule V and Schedule VI areas and areas excluded from Part
IX and IXA of the Constitution. For these areas, it has recommended a special area performance
grant of Rs.lO per capita for 2011-12 and Rs.20 per capita for subsequent years of its award
period. The performance grants are to be released subject to the States meeting conditions
specified in FC-XIII`s report.
FC-XIII has recommended that transfers to local bodies be treated as grants-in-aid under
Article 275 of the Constitution of India.
(c)&(d): Government is framing guidelines on the abovementioned recommendations of FC-XIII.