A Gist of Major Recommendations of Third State Finance Commissions and Their Implementation Status
| Author | V.N. Alok |
| Published date | 01 January 2016 |
| Date | 01 January 2016 |
| DOI | http://doi.org/10.1177/0019556120160110 |
| Subject Matter | Article |
DOCUMENT2
A GIST OF
MAJOR
RECOMMENDATIONS
OF
THIRD STATE FINANCE COMMISSIONS AND
THEIR
IMPLEMENTATION STATUS
V.N.ALOK
With
the passage of73"' and
74
1h Constitutional Amendments
in 1993, the process
of
decentralisation got momentum with
greater devolution and delegation
of
powers
to
panchayats at
various rungs
in
rural areas and municipalities
of
different
levels in urban areas. The state legislature is responsible
to devolve functions, finances
and
functionaries to local
governments enabling them
to
function as 'institutions
of
self-government'. New fiscal arrangements necessitate every
state under Article 243 I and 243 Y to constitute, at regular
intervals of.five years, a.finance commission and assign it the
task
of
reviewing the financial position
of
local governments
and make recommendations
on
the sharing and assignments
of
various taxes and non-taxes and grants-in-aid
to
be given
to panchayats and municipalities from the consolidated funds
of
states (Alok, 2008).
AFTER about a quarter century
of
its inception, many State Finance
Commissions
(SFCs)
have
submitted their
reports
to
their
respective
Governor
of
States.
Similar
to
other
government
publications,
reports
of
the
SFCs
are
also
difficult
to
obtain.
An attempt
was
made
to
compile
the
key
recommendations
of
the first and second generations
SFCs
(Alok,
2004).
In
that
order,
the
present compilation attempts to present the major recommendations
of
the
third
SFCs.
In
addition, actions taken by states
on
these recommendations
have
also
been
presented
along
with
each
recommendation.
Despite
significant
inter-state variations noticed in the approach and principles adopted
by
the
SFCs,
attempt
has
been made here
to
categorise the major recommendations
of
SFCs
into
the
following six categories.
1.
Global sharing -Recommendations related
to
global sharing
have
found place
in
this category.
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2. Assignment
of
revenues -Recommendations regarding
truces
fully or partly assigned to local governments and proceeds
of
individual tax( es) transferred to local governments both
panchayats and municipalities are placed in this head.
3.
Horizontal distribution -Recommendations regarding inter-se
distribution between Panchayats and Municipalities and among
different levels oflocal governments are listed under this heading.
4. Grants-in-aid -Major recommendations regarding specific
purpose grants and general purpose grants to fill the revenue
gaps
of
the local governments are listed here.
5.
Functions & functionaries -Recommendations related to the
transfer
of
functions to local governments and concomitant
powers including functionaries are mentioned in this category.
6.
Others measures -Recommendations which are administrative
in nature and other guidelines for the efficient functioning
of
the
system are listed under this head.
Though care has been taken, it is difficult to strictly classify the
recommendations as per the above classification. Hence, some overlapping
has occurred at few places.
Third Finance Commissions in States
at
a Glance
SI.
State
Constitution
Report
ATR
Award
Period
No.
Submission
Submission
1 Andhra Pradesh Jan-03/
Jan-08
Dec-14 2005-06
to
2009-1
O
Reconstituted
Dec-04
2 Arunachal Pradesh Not Constituted
3
Assam
Feb-06
Mar-08
Sep-09
2006-07
to
2010-11
4 Bihar
Jul-04
Nov-07
Mar-07
2003-04
to
2007-08
5 Chhattisgarh Not Constituted
7 Goa Not Constituted
8 Gujarat
Feb-11
Feb-14
NA
2010-ll
to
2013-14
9 Haryana
Dec-05 Dec-08
Sep-10*
2006-07
to
2010-
ll
10
Himachal Pradesh
May-05
Nov-07
Jun-08*
2007-08
to
20ll-12
11
Jammu & Kashmir Not Constituted
12
Jharkhand
NA NA
NA NA
13
Karnataka Aug-06
Dec-08
Oct-09*
2011-12
to
2015-16
14
Kerala Sep-04 .
Nov-05
Feb-06 2006-07
to
2010-11
15
Madhya
Pradesh
Jul-05
Oct-08
Mar-09
2006-07 to
2010-11
16
Maharashtra Jan-05 Jun-06
Dec-13
2006-07 to
2010-11
17
Manipur
May-13
NA NA NA
18
Meghalaya Exempted under Article
243
M
19
Mizoram
Exempted under Article
243
M
DOCUMENT 2
/1
S l
20 Nagai and Exempted under Article 243 M
21
Odisha Sep-08 Jan-10
NA
2010-11 to 2014-15
22 Punjab Sep-04 Dec-06 Jun-07* 2006-07
to
2010-1 l
23
Rajasthan
Scp-05 Feb-08 Mar-08 2005-06 to 2009-10
24 Sikkim Mar-09 Nov-09 Mar-10 2010-11 to 2014-15
25 Tamil Nadu Dec-04 Sep-06 May-07 2007-08 to 2011-12
27 Tripura Mar-08
NA
Mar-10 2005-06 to 2009-10
28
Uttar Pradesh Dec-04 Aug-08 Feb-10 2006-07
to
20
l 0-11
29 Uttarakhand Dec-09
NA
NA
NA
30
West Bengal Feb-06 Oct-08 Jul-09 2008-09 to 2012-13
• ATR (Action Taken Report). though submitted. is
not
available.
Andhra Pradesh
Third
State Finance Commission
Award Period: 2005-06 to 2009-10
Global Sharing
Constitution: December 2004*
Report
Submission: January 2009
ATR Submission: January 2014
• 6. 7 %
of
the total tax and non-tax revenue
of
the state Government
including the share
of
Central Taxes for the year 2004-05 would
be devolved
to
the Panchayats and Municipalities, the share
would
be
as
72:25
% to the Panchayats
and
27.25% to the
Municipalities.
[Not
Considered]
Assignment
of
Revenues
• Necessary instructions may be issued to levy maximum house-
tax, as per the rules, to enhance revenue under this item.
[Accepted]
• Necessary instructions may
be
issued to Gram Panchayats (GPs)
to levy and collect taxes on advertisements, drainage, and lighting
to augment their resources.
[Accepted]
• GPs may levy vehicle tax
on
all vehicles kept/used
in
the village
(except motor vehicles -being taxed
by
transport authorities).
[Accepted]
*The
Commission was initially constituted
on
16.1
·.2003
but
was
not functional
and
could
not collect required statistical data from local governments and
the
concerned departments
and
was
reconstituted with entirely
new
team
on
29.12.2004.
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