Press Information Bureau
Government of India
Ministry of Rural Development
23-April-2015 16:52 IST
14th Finance Commission awards more than 3 times grant to Panchayats

The Prime Minister Shri Narendra Modi will address a Conference on National Panchayati Raj Day tomorrow to highlight the steps taken by the Government for real devolution of administrative and financial powers. It is to be noted that the 14th Finance Commission has awarded Rs. 200,292.2 crores to Panchayats for 2015-2020, which is more than three times the grant of the 13th Finance Commission, FC. This amount is fixed. The 13th FC had recommended a percentage of the divisible pool for local bodies, and the estimated grant for Panchayats was Rs. 63,051 crores. While the 13th FC grant was for all three tiers of Panchayats: district, block and Gram Panchayat, the 14th FC grant is for Gram Panchayats only. The fund availability at the GP level will now be Rs. 2,404 per capita over five years, and Rs. 17 lakh per year (Rs.85 lakh for five years) for an average GP. The Fourteenth FC grant is to be spent on basic services such as sanitation, drinking water, maintenance of community assets etc. For this, Panchayats will have to prepare local plans, to ensure that these basic services reach everyone, including the most marginalized sections of society. Panchayats can especially focus on sanitation.

The Prime Minister will also release the Devolution Index Report 2014-15 on the occasion. The Study on ‘How effective is devolution across Indian States? –Insights from the field’ was undertaken by the Tata Institute of Social Sciences (TISS), Mumbai for the year 2014-15. Previous studies had focused on the initiatives taken by States to comply with the Constitutional mandate by way of legislation and enabling policy, coupled with policy initiatives for governance, accountability and capability development, and ranked States accordingly.

The present study attempts to match functional devolution in each domain listed in the Eleventh Schedule with devolution of resources both financial and human, and to validate the extent of devolution undertaken by the State by the effectiveness of devolution on the ground- ie, in the three tier Panchayats.

This year about 1000 delegates consisting of State Ministers for Panchayati Raj, Senior officials from State Government Panchayati Raj Dept, elected representatives for all three tiers of Panchayati Raj Institutions (PRIs), including from the national award winning Panchayats will attend the National Conference.