The Panchayati Raj Ministry has recently requested a fivefold funding increase for rural local bodies from the 15th Finance Commission. The Ministry is seeking an allocation of INR 10 lakh crore for the 2020-2021 to 2025-2026 period, compared to the INR 2 lakh crore allocated under the 14th Finance Commission.
History of Allocations and Utilisation
The allocations had tripled between the 13th and 14th Commissions. The utilisation rate for FC grants between 2015 and 2019 stands at 78%. Currently, there are 2.63 lakh panchayats across India that are responsible for 29 functions, according to the 11th Schedule of the Constitution. These functions primarily include road construction and maintenance, as well as drinking water supply.
The Seventy-Third Amendment Act, 1992
The Seventy-Third Amendment Act, granted constitutional status and protection to the Panchayati Raj institutions in 1992. As part of this act, a new ‘Part-IX’ called ‘the panchayats’ was added, along with a new 11th Schedule containing 29 functional items for the panchayats.
Role of Panchayats During Covid-19
During the Covid-19 pandemic, the significance of panchayats increased manifold as they managed isolation centres, medical camps, and contact tracing. However, one of the major challenges faced during the pandemic and lockdown was the inability of most panchayats to provide cooked food at short notice. In response to this challenge, the Ministry has proposed the establishment of community kitchens in each panchayat, to be operated by local self-help groups (SHGs).
Employment Opportunities through Panchayats
The role of panchayats has also expanded with the introduction of the Garib Kalyan Rojgar Abhiyan. This initiative will rely on panchayats to generate employment opportunities for migrant workers returning home due to the pandemic.
About the Finance Commission
The Finance Commission is a constitutional body responsible for determining the method and formula for tax distribution between the Centre and states, and among the states, based on the constitutional arrangement and current requirements. Article 280 of the Constitution mandates the President of India to constitute a Finance Commission every five years. Since 1951, fifteen Finance Commissions have been set up in India.
The 15th Finance Commission
The 15th Finance Commission was established by the President of India on 27th November 2017, following the dissolution of the Planning Commission and the introduction of the Goods and Services Tax (GST). The commission is led by N.K. Singh. In November 2019, the Union Cabinet approved the 15th Finance Commission’s submission of its initial report covering Financial Years 2020-21 and extended its tenure to present the final report covering Financial Years 2021-22 to 2025-26 by 30th October, 2020.
