State finance commissions a big setback, not of much help: report

Jharkhand has not even established a state finance commission while two other states have its finance commission in its first term, notes citizens' report

trithesh

Trithesh Nandan | December 18, 2013



The state finance commissions (SFCs) have been considered important institutions in strengthening and financing local governing bodies (LGBs). Yet, even 20 years after the 73rd and 74th amendments to the constitution the SFCs are rudimentary bodies in many states, and some have not even formed them, a new release by New Delhi-based policy think-tank National Social Watch highlights.

Jharkhand, the report points out, has not constituted its first SFC even 14 years after the state was carved out.

"As the SFCs retain primary responsibility to distribute the funds among LGBs, their absence directly affects financial strength of the local bodies," says the citizens' report, titled 'Governance and Development 2013', released on Tuesday.

According to the report, each state should have constituted its fourth SFC by this year but only seven have done it so far. Two states – Jammu and Kashmir and Nagaland – have formed their first SFCs, while 11 states have formed their third SFCs.

The report notes that the 13th finance commission came down heavily on SFCs that are functional in these states.

In states where SFCs are functional the report says the commissions delay releasing funds to local bodies. "There is a huge gap between the promises f democratic institution and the real performance," said John Samuel, founding-member, NSW.

According to the report, state governments have failed in devolution of funds: "In terms of the 73rd constitution amendment act, the state governments have to transfer funds, functions and functionaries (3Fs) with respect to 29 subjects. But no state has transferred the 3Fs in all identified subjects."

The study is the seventh citizens’ report and evaluated all four apex institutions of governance: parliament, executive, judiciary and local governing bodies.

Pointing out the government's “neglect” towards allocation to local governing bodies, the report says, "The amount of Rs 5,699 crore in 2010-11 and Rs 9,9963 crore in 2011-12 allocated for about 2.5 lakh LGBs looks peanuts compared to about Rs 4,000 crore per annum allotted to about 800 MPs under the local development programme."

To stem the rot of local governing bodies, the government introduced panchayat empowerment and accountability incentive scheme (PEAIS) in 2005-06 but efforts of different states are not successful on this front, the study says. Under PEAIS, states are ranked on two categories – cumulative devolution index (CDI) and incremental devolution index (IDI). "Only 10 states have initiatives worth considering in the IDI preparation while two states have scored more than 60 percent in CDI," it says.

"The government of India rejected the important recommendations of the Second Administrative Reforms Commission, which are meant for strengthening the LGBs and tilting the power balance from the bureaucracy to the elected representatives," said Amitabh Behar, spokesman of National Social Watch.
The report also mentions that the local bodies suffer due to four factors - elite capture (village elites holding the key posts in local bodies), regressive politics, invisible institutions and sarpanch raj. The report was released by supreme court justice Ananga Patnaik and Satyanand Mishra, the former chief information commissioner.

Comments

 

Other News

El Niño threatens India’s Rabi crops

India’s southwest monsoon ended with a 13% rainfall deficit in 2026, its weakest performance in a decade, raising concerns over agricultural production, water security and the upcoming rabi season. With El Niño expected to persist into early 2027, experts warn that declining soil moisture, dep

Regulating the data advantage: India’s new e-Commerce framework

For over a decade, India’s e-commerce story has rested on a simple premise: platforms connect buyers and sellers, while data fuels efficiency, personalisation, and scale. However, as the market matured, its structure has revealed a growing imbalance. E-commerce platforms, especially marketplace ent

Changing weather patterns, climate change responsible for Nepal floods

The interaction between active Western Disturbances, increased atmospheric moisture and the region’s complex topography aswell as global warming are important factors behind intense rainfall in the Himalayas, leading to flash floods in Nepal, according to meteorologists. Nepal

A right she cannot reach

Last summer, the two of us spent several weeks in rural Madhya Pradesh with a non-profit that works on gender justice through women’s self-help groups. We went in with a notebook full of laws. The Protection of Women from Domestic Violence Act. The Dowry Prohibition Act. Free legal aid for every wo

Tier-2 cities lead India’s digital credit push

Digital payments have become a reflex for urban India, but the confidence earned in paying has not yet carried over to borrowing. That is the central finding of `How Urban India Pays Report 2026`, released by Pahlé India Foundation in collaboration with Amazon Pay. Based on a survey of 5,149 consu

India calls for doubling bilateral trade with UK by 2030

Commerce and industry minister Piyush Goyal has called upon businesses in India and the United Kingdom to translate the opportunities created by the India-UK Comprehensive Economic and Trade Agreement (CETA) into expanded trade, investment, partnerships and job creation. Addressing the Bu

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter