The Fourth State Finance Commission, Haryana on Friday recommended a financial devolution of Rs. 3,573.12 crore for local bodies for five years that is from 2011-12 to 2015-16.
The Commission recommended Rs. 2,322.52 crore for Panchayati Raj Institutions and Rs. 1,250.60 crore for Urban Local Bodies through the mechanism of global sharing of state own tax revenues.
This devolution is over and above the funds already being transferred to these bodies through state budget and other transfers, Chairman of the Commission LSM Salins said after presenting the final Report for the period from 2011-12 to 2015-16 to Haryana Governor Jagannath Pahadia here today.
Salins apprised Pahadia that resource base of local bodies is inadequate as compared to the vast responsibilities cast on them. Therefore, these bodies need larger funds for discharging their constitutional duties of providing minimum acceptable levels of civic amenities, he said.
The 4th State Finance Commission was constituted by the State Government to recommend sharing of state revenues with the rural and urban local bodies and also to suggest measures of augmentation of their internal resources.
The Chairman said that while framing its scheme of fiscal transfers, the Commission scrutinised the overall fiscal capacities and status of core civic services of local bodies as also financial position of the State.
He hoped that this financial devolution would be sufficient to meet the expenditure needs of local bodies on establishment and Operation and Maintenance (O&M) cost of basic public services.
But at the same time, he also cautioned that local bodies would need to fully utilize their enabling taxation powers and raising internal resources through their own efforts in order to be able to work as viable and effective units of local governance.