Urban local bodies (ULBs) in Uttarakhand will receive 55% of total fund allocated for civic bodies from this year while remaining 45% will go to rural local bodies.
The ratio was finalised by the government in accordance with recommendations of the 4th State Finance Commission (SFC).
The SFC had assessed finances of the state government and that of local bodies, besides studying specific circumstances and problems faced by the civic bodies.
Based on the assessment, the SFC chalked out a formula governing distribution of the state’s total revenue between the state government and local bodies. It also fixed norms for sharing of revenue among local bodies.
The SFC recommended that 11% of the state’s total tax revenue to be allocated to local bodies.
“Among the ULBs, municipal corporations will get 40%, municipal boards 45% and town panchayats 15% of the total grants. Similarly, district, area and village panchayats among Panchayati Raj Institutions will get 35%, 30% and 35% grants respectively,” commission chairperson BK Joshi told HT.
Notably, the 4th SFC had been constituted by the government in February 2015 and its recommendations had to be implemented from April 1, 2016 for a period of next five years.
However, sources said the report – which had been submitted in May last year - could not be tabled in the state assembly following political upheaval that rocked the hill state last year.
“The report was tabled in the state assembly recently, after which we have released guidelines based on the recommendations of the SFC,” a senior official with the finance department told HT.
The SFC report has also recommended provision of a separate sum of ₹1 crore for the first year and ₹75 lakh for the remaining four years for newly created local bodies, whose data was not available with the SFC at the time of the study period. The sum will be required to be spent on development works.
“We have also suggested that a special grant be given to local bodies to clear all their pending arrears of salaries or pensions at one go,” Joshi told HT.