Chapter V Financial Resource Mobilization of PRIs in Karnataka

Chapter V Financial Resource Mobilization of PRIs in Karnataka

CHAPTER-5 FINANCIAL RESOURCE MOBILIZATION OF PRIs IN KARNATAKA 5.1 Introduction The Panchayat Raj Institutions are granted adequate political powers but not adequate financial resource and functional autonomy to do justice to their role as instruments of integrated rural development. The Princely State of Mysuru made pioneering efforts to mobilize funds for the PRIs in 1862 by establishing Local Fund. The PRIs were given necessary powers to collect revenue through different sources and develop the basic infrastructure in the rural areas. The Mysuru Local Board Act, 1902, the Mysuru Local Board and Gram Panchayat Act, 1918, and several acts were enacted by the then rulers. These initiatives are considered as the land mark developments for strengthening the PRIs in the country. According to the 73 rd amendment to the Constitution of India, the state government and union territories are required to establish the State government Finance Commission for every 5 years to review the economic conditions of the PRIs. It is a mandatory action to facilitate allocation of financial resource to the PRIs. The amendment primarily deals with the three Fs, namely, functions, finance and functionaries, more precisely their devolution to PRIs. The success of decentralization is dependent on whether PRIs have access to adequate financial resource as well as the staff who are required to carry out the functions assigned to each tier in the system. The State Finance Commission is constituted under Article 243(I) which states that these commissions should concern themselves only with the proceeds of taxes which may be divided between the State governments and Panchayats. This results from the fact that Constitution does not provide for taxes which are to be compulsorily shared between the State governments and 127

Panchayats while this is provided for between the Union and the State governments. After the 80 th amendment to the Constitution, 1996 the proceeds of income tax were compulsorily shared between Union and State governments while proceed of Union excise duties were permissively shared. In other words there is a qualitative difference in the scope of the two Finance Commissions. This is notwithstanding the fact that after the 80 th amendment the distinction between compulsorily and permissively shared taxes in the divisible pool has virtually disappeared. In reality, the Constitution does not specify which taxes, tolls, fees etc are to be mandatorily shared by the State governments with Panchayats. It may be noted that the National Commission to review the working of the Constitution has not suggested any major overhaul in financial relations between the Union and the State governments or between the latter and Panchayats. The status of financial resource mobilization in Karnataka state government in general and Mysuru district in particular is furnished in this chapter. 5.2 Financial Resource Mobilization in Karnataka The PRIs enjoy limited financial resource and autonomy due to certain constraints and limitations. From a fiscal decentralization perspective, the under lying aim is to provide a broad idea on the transfers of funds to local bodies that might be helpful to evaluate the different policy reform options. The centre and state government finance commissions have found this fiscal information as a powerful tool in the resources allocation decision process. To the citizens such information can help inform on allocation patterns to PRI at all levels, thereby providing a powerful tool to empower them to hold authorities accountable. The rural local governments - in particular, the district and the intermediate tier as discussed earlier do not enjoy much of fiscal autonomy due to the fact that they are largely dependent on the state government and central government for revenues often referred as inter-governmental transfer. However, the third tier namely the Gram Panchayats do have certain fiscal 128

autonomy in the form of own sources of revenue through taxes and non taxes mobilized locally. The policies on inter-governmental finance can be understood only with the knowledge of the design and implementation of intergovernmental transfer. It is noted that compiling the information on the variables such as revenue, expenditure and transfers is particularly important to estimate fiscal capacities and needs, and to evaluate the equity and efficiency of the transfer system. The PRIs receive the funds from both the consolidated fund of the state government as well as that of the central government to implement district sector and central schemes. As regard the implementation of fiscal transfers, it is known that the transfers are devolved in the form of schemes. In Karnataka, the process of making PRIs accountable for their specific roles is also tied up with the initiative on rationalization of schemes. This has resulted in a reduction from 399 schemes to 221 schemes under plan schemes. There was also reduction of schemes from 255 to 144 under non-plan sector. Thus, the total scheme which was 654 was curtailed to 335 subsequently. The governments justify their actions by saying that it was done with a view to ensure greater flexibility to PRIs to address local priorities. There is an overlapping of functions between two schemes and also adds to complication of accounting and tracking of the fiscal system under the existing circumstances. As a matter of fact, nearly 94% of the own revenues of PRIs comes from Gram Panchayats. This is illustrative of the importance of this tier. Preceding to the place of local bodies, rural as well as urban, in the federal structure of public finance the following factors can be noticed. The total expenditure of local bodies as a percentage of the combined expenditure of Union, State government and Local bodies is a mere 4.7%. Given the differences in performance across state government s it is all too likely that in some laggard state governments the share of local bodies in total expenditure is even less than 4.7%. Further, the tax revenue of local bodies as a percentage of the 129

combined tax revenue of State government s and local bodies is just 1.6% and it is less than the figure for expenditure decentralization. As a percentage of GDP the tax revenue of local bodies is only 0.26%. The existing expenditure pattern of local bodies reveals a pathetic financial condition of PRIs across the country. The Constitution envisages Panchayats as units of self-government. However, it is up to the State government s to devolve upon them the powers required to perform this role. There is an important difference between the Finance Commissions under Article 243(I) and 280. In a somewhat similar fashion the Constitution contains 29 subjects that the state governments may devolve upon Panchayats. However, this is at the discretion of the state governments since the relevant Article employs the expression may. There is no firm commitment enjoining the state governments to devolve powers, more or less the powers specified. In Karnataka state, there was no clear cut demarcation of the spheres of the three tiers in relation to the physical autonomy and financial relations between the state government and PRIs in the absence of relevant decisions and actions. 5.3 Financial Resource of PRIs in Karnataka State The financial resource of the PRIs can be classified into 5types. They are as follows. 1. Own Revenue 2. State government Finance Commission Grants 3. Central Finance Commission Grants 4. Central Sponsored Schemes Grant 5. Central Development Programmes Grant. Own Revenue The sources of own incomes of PRIs are as follows i. The tax levied and collected. 130

ii. Non-tax revenue like fine, fees, etc., iii. Revenue from assets iv. Stamp duties collected behalf of PRIs by Government v. Debt collected by PRIs vi. Contribution funds. Here the important sources of finance of PRIs such as Own revenue, State government Finance Commission Grants and Central Finance Commission Grants are discussed below. Firstly own revenue mobilized by the PRIs are presented as follows. Revenue from Tax Collection of PRIs By utilizing the powers given to the PRIs by the Constitution, PRIs can levy certain tax on public which may be defined as tax revenue to PRIs. Voluntarily provided funds by the donators or by the members is defined as the revenue by the debt. The funds collected through voluntary contributions may be utilized as a capital for creating assets for the public and for the development activities. But, the tax collected from PRIs may be used for the day to day activities and for repayment against loan taken by the PRIs. But the thing is to collect the debt; permission is needed by the State government. The revenue generated from the own sources by the PRIs in form of tax on land, tax on building, tax on advertisement, tax on entertainment, tax on vehicle, water rate, street light charges etc are presented in the below table 5.3.1. 131

Table 5.3.1 Own revenue generated by PRIs during 2013-14 Divisions No of GPs OB (Rs. in 1000) Current Demand (Rs.in 1000) Total Demand (Rs.in 1000) Collection (Rs.in 1000) Balance (Rs.in 1000) Bangalore 1617 3205458 1653600 4859849 994219 3864821 Belgaum 1497 2575190 727683 3303595 448390 2854469 Gulbarga 1000 1323045 299071 1622549 113704 1508506 Mysuru 1518 2016454 1043658 3060836 701675 2358448 Total 5632 9120147 3724012 12846829 2257988 10586244 Source: Panchatantra statistics 2013-14 Table 5.3.1 shows the details of division wise own revenue generated by PRIs which includes tax on land, tax on building, tax on advertisement, tax on entertainment, tax on vehicle, water rate, street light charges etc during 2013-14. The table reveals that 1617 gram panchayats in Bangalore division are having Rs. 4859849 which includes opening balance of Rs. 3205458 and current demand of Rs. 1653600. The collection in the Bangalore division was Rs. 994219 and balance to be collected is Rs. 3864821. The 1497 gram panchayats in Belgaum division are having Rs. 3303595 which includes opening balance of Rs. 2575190 and current demand of Rs. 727683. The collection in the Belgaum division was Rs. 448390 and balance to be collected is Rs. 2854469. The 1000 gram panchayats in Gulbarga division are having Rs. 1622549 which includes opening balance of Rs. 1323045 and current demand of Rs. 299071. The collection in the Gulbarga division was Rs. 113704 and balance to be collected is Rs. 1508506. The 1518 gram panchayats in Mysuru division are having Rs. 3060836 which includes opening balance of Rs. 2016454 and current demand of Rs. 1043658. The collection in the Mysuru division was Rs. 701675 and balance to be collected is Rs. 2358448. From all the division the 5632 GPs are having Rs. 12846829 including opening balance 132

of Rs. 9120147 and current demand of Rs. 3724012. The total collection from all the division is Rs. 2257988 and balance is Rs. 10586244. Among all the division highest mobilized division is Bangalore and Gulbarga division has mobilized lease revenue in Karnataka. Figure 5.3.1 Own revenue generated by PRIs during 2013-14 5000000 4000000 3000000 2000000 1000000 Total Demand (Rs.in 1000) Collection (Rs.in 1000) Balance (Rs.in 1000) 0 Powers of GPs to Mobilize Financial resource Except State government and Central government, only Gram Panchayats have the power to levy and collect the taxes at GP level and also it can only respond to the local dispute or problems immediately, so it is recognized as local government. Tax Leviable Sources The PRIs including the village Panchayats need adequate financial resource to develop the rural areas. The financial background of GPs should be sound enough to independently implement the development programmes and improve the rural infrastructure. Community assets can be created by the GPs on the basis of fiscal autonomy. In the present times, the GPs can levy the taxes as follows. 133

Buildings, houses, sites and other sources which is under the limits of respective GPs. The services provided for the public by GPs. The revenue from the assets created by GPs and annual earnings. Along with the above items of revenue sources the GPs can mobilize revenue as per the provisions made in the Karnataka Panchayat Raj Act, to Gram Panchayats. Table 5.3.2 Revenue Sources of GPs Taxes Sl. No Item Amount in Rupees 1 Non- agricultural place Rs.1/- per sq.mt 2 Buildings Not exceed more than 10% of income from buildings 3 Except Cinema other entertainment programmes 4 Vehicle tax (except motor vehicle) Rs.20/- per programme Rs.5/- to Rs.25/-per year 5 Advertisement Rs.5/-per sq.mt 6 Advertisement on flexes 1. Min.Rs.35/- Max.Rs.45/-( 3sq.ft ) 2. Min.Rs.75/- Max.Rs.85/-(above 3sq.ft below 8sq.ft) User Charges 3. Min.Rs80/- Max.Rs.95/- (above 8sq.ft) 1 General Water Charges Rs.20/- for public tap water supply 2 Special Water Charges Rs.35/- for private tap water supply Grants 1 Statutory Grants Rs.10, 00,000/- having below 8000 population. Rs.12, 00,000/- having more than 8000 population. 134

2 13 th Finance Commission --- Recommendation 3 State government Programmes Piped water supply management Rs.8,000/- Lpcd water management Rs.3,500/- Pumps management Rs.6000/- Ambedkar Vasathi Rs.50, 000/- per house. Basava Vasathi Rs. 1, 20,000/- per house 4 Central Government Programmes MNREGA BRGF-Backward Region Development Grant Indira Awas Yojana Rs.1, 20,000/- Nirmal Bharat Abhiyan Private toilets Rs.9, 200/- School Toilets Rs.35, 000/- Anganwadi Toilets Rs.8,000/- Community Toilets Rs.2,00,000/- Other than the above sources, revenue which comes from the assets belongs to GPs like rent, lease etc., and revenue from the powers of GPs in the form of fees for hats and shandies, license given for private buildings, license fees for establishment of factories, workshops, hotels, restaurants, Bakery, fees from private layouts, fees to send notices, warrant notices, local fines etc., are the finance resource of the Gram Panchayats. State Government Finance Commission Grant According to the 73 rd amendment, Article 243I and Panchayat Raj Act 1993, the state government is required to constitute the State Finance Commissions once in five years to examine the financial functions. Till now, 3 SFCs have been constituted in the state government of Karnataka. According to 3 rd SFC recommendation, State government on its Non Loan Net Own Revenue 135

Receipts 40% grants to be given to Local governments to act on its own. The Panchayats having less than eight thousand population receive Rs 8 lakhs from the state government. The Panchayats having more than eight thousand population receive twelve lakhs rupees per annum as statutory grant. These kinds of statutory grant are released quarterly for the ZPs. By utilizing these grants GPs can pay the electricity (not more than 60%) and the left amount is deposited to GPs account. Not only the above state government d grants, but according to the recommendation by SFC the state government is releasing 1crore to Zilla Panchayat and 2 crore to Taluk Panchayat as development grant. Table 5.3.3 Consolidated Fund released to Gram Panchayat in Karnataka for financial year 2014-15. (Rs. in lakhs) Divisions Plan Non Plan Bangalore Division 115.57 0 Belgaum Division 107.31 0 Gulbarga Division 84.14 0 Mysuru Division 199.42 0 Total 506.44 0 Source:www.kar.nic.in/finance Table 5.3.3 shows the details of division wise consolidated fund released to Gram Panchayats in Karnataka for the year 2014-15. For the non plan expenditure the SFC has not released the fund for all the four divisions. Under plan allocation for Bangalore division Rs. 115.57 lakhs has been released, Rs. 107.31 lakhs has been released to the Belgaum division. Rs. 84.14 lakhs has been released for the Gulbarga division and for Mysuru division Rs. 199.42 lakhs has been released. Totally Rs. 506.44 lakhs has released for all the four divisions. Among all the division Mysuru division received the highest amount from SFC and Gulbarga division received the least amount from SFC. 136

Figure 5.3.2 Consolidated Fund released to Gram Panchayat in Karnataka for financial year 2014-15. Plan Bangalore Division Belgaum Division Gulbarga Division Mysuru Division Table 5.3.4 Allocation and Release of General Basic Grants (Rs. in Lakhs) Years Allocation Release 2010-11 41433.00 41938.00 2011-12 53077.00 52571.00 2012-13 59720.49 59720.49 2013-14 68896.08 68896.00 Total 223126.57 223125.57 Source: Finance.kar.nic.in/ 137

Table 5.3.4 reveals the allocation and release of general basic grants of local bodies for PRIs in Karnataka during the years from 2010-11 to 2014-15. In the year 2010-11 Rs. 41433 lakhs have been allocated and Rs. 41938 lakhs have released. In the year 2011-12 Rs. 53077 lakhs have been allocated and Rs. 52571 has been released. In the year 2012-13 Rs 59720.49 lakhs have been allocated and Rs. 59720.49 lakhs has been released and in the year 2013-14 an amount of Rs. 68896.08 lakhs have been allocated and Rs. 68896 lakhs has been released. For all the years totally Rs. 223126.57 has been allocated and Rs. 223125.57 has been released for the PRIs form general basic grants between the year 2010-11 and 2013-14. Table 5.3.5 Allocation and Release of Performance Grant (Rs. in Lakhs) Years Allocation Release 2011-12 18109.00 24386.64 2012-13 40928.97 20464.48 2013-14 48040.01 86480.61 Total 107077.98 131331.73 Source: Finance.kar.nic.in/ Table 5.3.5 reveals the allocation and release of performance grants of local bodies for PRIs in Karnataka during the years between 2011-12 and 2013-14. In the year 2011-12, Rs. 18109 lakhs was allocated and Rs. 24386.64 lakhs was released which is more than the allocated amount. The allocated amount Rs. 40928.97 lakhs was allocated, but the government has released Rs. 20464.48 lakhs in the year 2012-13 and in the year 2013-14, Rs. 48040.01 lakhs is allocated but Rs. 86480.61 is released which is higher than allocation. During 2012-13 the released amount was less than the half of the allocated amount but during 2013-14 the released amount is almost the double the amount allocated under performance grant for PRIs in Karnataka. This shows the irregularity in the allocation and release of grants to the PRIs in Karnataka. 138

Figure 5.3.3 Allocation and Release of Performance Grant 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 2011-12 2012-13 2013-14 Allocation Release Table 5.3.6 General Basic Grants Released to PRIs in Karnataka (2013-14) (Amount in Rs) Divisions No Of GPs Amount Released No.of GPs amnt. Not Recvd. Bangalore 1617 636933371 65 Belgaum 1493 598559765 37 Gulbarga 999 487893019 64 Mysuru 1518 467564145 94 Total 5627 2190950300 260 Source: Panchatantra statistics 2013-14 Table 5.3.6 shows the details of general basic grants released to PRIs in Karnataka for the year 2013-14. For the 1617 GPs of Bangalore division an amount of Rs. 636933371 has been released and 65 gram panchayats have not received the grant in this year. For the 1493 GPs of Belgaum division an amount of Rs. 598559765 has been released and 37 GPs have not received the 139

grant. For the 999 GPs of Gulbarga division amount of Rs. 487893019 has been released and 64 GPs have not received the grant. For the 1518 GPs of Mysuru division amount of Rs. 467564145 has released and 94 GPs have not received the grant. In total for 5627 GPs of all the four divisions in the state government Rs. 2190950300 has been released and 260 GPs have not received the fund. During 2013-14 GPs of Bangalore division have received the highest amount under basic grant and the GPs of Mysuru division received the lower amount of this grants. Performance Grants 1 st and 2 nd Table 5.3.7 installment to PRIs in Karnataka (2013-14) (in Rs) Divisions No of GPs Amount Released Amount Released Total Released No. of GPs not recvd. 1 st installment 2 nd installment (1 st & 2 nd installment) Bangalore 1617 416447475 416447678 832895153 3 Belgaum 1493 391357579 391357768 782715347 0 Gulbarga 999 319000105 319000263 638000368 1 Mysuru 1518 305708441 305708591 611417032 0 Total 5627 1432513600 1432514300 2865027900 4 Source: Panchatantra statistics 2013-14 Table 5.3.7 exhibits the details of performance grants released in 1 st and 2 nd installment to PRIs in Karnataka for the year 2013-14. Bangalore division has received 1 st installment of Rs. 416447475 and 2 nd installment of Rs. 416447678 for its 1617 GPs and among this 3 GPs have not received the grants. Belgaum division has received 1 st installment of Rs. 391357579 and 2 nd installment of Rs. 391357768 for its 1493 GPs. Gulbarga division has received 1 st installment of Rs. 319000105 and 2 nd installment of Rs. 319000263 for its 999 GPs and among this 1 GP have not received the grants. Mysuru division 140

has received 1 st installment of Rs. 305708441 and 2 nd installment of Rs. 305708591 for its 1518 GPs. Totally for 5627 GPs in Karnataka had received 1 st installment of Rs. 1432513600 and 2 nd installment of Rs. 1432514300 and totally 4 GPs in Karnataka have not received the funds. For all the four division totally Rs. 2865027900 has been provided and Bangalore division has received the highest amount and Mysuru division has received lowest amount in the performance grants for the year 2013-14. Consolidated Fund Released for Gram Panchayats in Karnataka for the Financial Year 14-15 According to the Government order no: FD 207 ZPA 2014, Bangalore, dated: 2 nd April 2014, the state government had released the consolidated fund to GPs for the month of April 2014 to July 2014 for the implementation of Plan schemes of Gram Panchayat programmes. The Chief Account Officer of ZPs will make Taluk Panchayat wise allocation. TPs will prefer bills on the treasury enclosing a Gram Panchayat wise allocation and debit to consolidated fund of the state government. The treasury officer will adjust the funds to the credit of GPs based on the allocation state government mint furnished by Executive Officers of Concerned TPs as per new scheme codes shown in the link document. The district wise allocation of funds to Gram Panchayats is shown in the below table. Central Finance Commission Grant Till now at national level 13 finance commission had submitted reports and at present 14 th finance commission has already started its work. As according to the recommendation of 13 th finance commission for the Panchayat Raj and Urban Local Bodies, Central government is releasing the grants in the ratio of 70:30, and in that grant released to PRIs is divided into the ratio of 70%, 20%, and 10% for the Gram Panchayat, Taluk Panchayat and Zilla Panchayat respectively. For providing drinking water, sanitation, civil services, accounts maintenance and building maintenance Basic Grants are released. In the performance view also Performance Grants are released. 141

5.4 Financial resource of PRIs in Mysuru District Here in this section the financial resource of PRIs in Mysuru district have discussed. Consolidated Fund Released to Zilla Panchayat, Mysuru for the Financial Year 2014-15 The State government had released for Zilla Panchayat, Mysuru, an amount of Rs.1842.18 lakhs under plan section and it had not released any amount for the Non-plan from the consolidated fund of the State government out of Budget Provision for the financial year 2014-15 as per the details in Government Order No: FD 7 ZPA 2014(7), dated: 4 th April 2014. This release is meant for the expenditure of Zilla Panchayat during the period April 2014 to July 2014. Consolidated Fund to Taluk Panchayat in Mysuru District for the financial Year 2014-15 For the Taluk Panchayats which belongs to Mysuru District, a total amount of Rs.2479.31 lakhs under Plan and Rs.13951.15 lakhs under Non-plan is released from the consolidated fund of the state government out of the budget provisions for the financial year 2014-15 as per the details in Government order No: FD 67/68/69/70/71/72/73 ZPA 2014, dated: 2 nd April 2014. This release is meant for expenditure of Taluk Panchayat during the period April 2014 to July 2014. The details of amount released for each taluk is shown in the below table. 142

Table 5.4.1 Consolidated Fund released to Taluk Panchayats in Mysuru District for the financial year 2014-15. (Rs. in lakhs) Taluk Panchayats Plan Non-plan Total Mysuru 580.72 4253.91 4834.63 H.D.Kote 376.78 1522.50 1899.28 Hunsur 340.94 1728.81 2069.75 K.R.Nagar 294.66 1595.82 1890.48 Nanjangud 345.63 2010.60 2356.23 Piryapatna 280.19 1321.27 1601.46 T.Narasipura 260.39 1518.24 1778.63 Total 2479.31 13951.15 16430.46 Source:www.kar.nic.in/finance The table 5.4.1 reveals the consolidated fund released to taluk panchayats in Mysuru district for the year 2014-15. For Mysuru taluk Rs. 580.72 lakhs has been released under plan head and Rs. 4253.91 lakhs under non plan head. For H.D.Kote taluk Rs. 376.78 lakhs has been released under plan head and Rs. 1522.50 lakhs under non plan head. For Hunsur taluk Rs. 340.94 lakhs has been released under plan head and Rs. 1728.81 lakhs under non plan head. For K.R.Nagar taluk Rs. 294.66 lakhs has been released under plan head and Rs. 1595.82 lakhs under non plan head. For Nanjangud taluk Rs. 345.63 lakhs has been released under plan head and Rs. 2010.60 lakhs under non plan head. For Piryapatna taluk Rs. 280.19 lakhs has been released under plan head and Rs. 1321.27 lakhs under non plan head. For T.Narasipura taluk Rs. 260.39 lakhs has been released under plan head and Rs. 1518.24 lakhs under non plan head. Totally for all the 7 taluks of Mysuru district Rs. 2479.31 lakhs under plan head and Rs. 13951.15 lakhs has been released as consolidated fund. In total Piryapatna taluk panchayat has received lowest grants and Mysuru taluk panchayats has received highest grant as consolidate fund for the year 2014-15. 143

Figure 5.4.1 Consolidated Fund released to Taluk Panchayats in Mysuru District 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Plan Non-plan Table 5.4.2 General Basic Grant Released to PRIs in Mysuru District for 2013-14 (in Rs.) Taluk Name Amount Released H.D.Kote 15874796.00 Hunsur 13019617.00 K.R.Nagar 12448581.00 Mysuru 7195052.00 Nanjangud 13133824.00 Piryapatna 11763338.00 T.Narasipura 13133824.00 Total 86569032.00 Source: Panchatantra statistics 2013-14 144

Table 5.4.2 shows the details of fund released as general basic grants for Taluk Panchayats in Mysuru district during 2013-14. For H.D.Kote taluk panchayat Rs. 15874796.00 has been released. For Hunsur taluk panchayat Rs. 13019617.00, for K.R.Nagar taluk panchayat Rs. 12448581.00, for Mysuru taluk panchayat Rs. 7195052.00, for Nanjangud taluk panchayat Rs. 13133824.00, Rs. 11763338.00 has been released to Piryapatna taluk and Rs. 13133824.00 has been released to T.Narasipura taluk. Totally Rs. 86569032.00 has been released to all the 7 taluk panchayats of Mysuru district. During 2013-14 the H.D.Kote taluk panchayat received the highest amount under general basic grant and Mysuru taluk panchayat received the lowest amount under this grant. Figure 5.4.2 General Basic Grant Released to PRIs in Mysuru District 18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 Amount Released Amount Released 145

Table 5.4.3 Performance Grants 1 st and 2 nd installment to PRIs in Mysuru District (2013-14) Taluk Name (in Rs.) Amount Released Amount Released Total 1 st installment 2 nd installment H.D.Kote 10379451.00 10379451.00 20758902 Hunsur 8512643.00 8512643.00 17025286 K.R.Nagar 8139282.00 8139282.00 16278564 Mysuru 4704356.00 4704356.00 9408712 Nanjangud 8587316.00 8587316.00 17174632 Piryapatna 7691248.00 7691248.00 15382496 T.Narasipura 8587316.00 8587316.00 17174632 Total 56601612.00 56601612.00 113203224 Source: Panchatantra statistics 2013-14 Table 5.4.3 shows the details of funds released as performance grants under 1 st and 2 nd installment to the PRIs of Mysuru district for the year 2013-14. For H.D.Kote taluk Rs. 20758902 has been released, for Hunsur taluk Rs. 17025286, for K.R.Nagar taluk Rs. 16278564, for Mysuru taluk Rs. 9408712, for Nanjangud taluk an amount of Rs. 17174632, for Piryapatna taluk an amount of Rs. 15382496 and for T.Narasipura taluk an amount of Rs. 17174632 has been released. Totally for all the 7 taluks Rs. 113203224 has been released and in the total H.D.Kote taluk has received highest grants and Mysuru taluk has received lowest amount of grants which includes the 1 st and 2 nd installment of performance grants during the year 2013-14. 146

Grants of Centrally Sponsored Schemes Even Centrally Sponsored Schemes and development programmes are framed by the central government. The implementation of these programmes under partnership the both State and Central Government. For example MNREGA is implemented on the partnership basis of 90%-10% share of funds, District Administration cost 75%-25%, Rastriya Grameena Jeevanopaya 75%- 25% and in Sarva Shikshana Abhiyan 60%-40% partnership implementation is there. Both the grants released from the Central and State government under centrally sponsored schemes is transferred to Zilla Panchayat and Zilla Panchayat will transfer the amount to respective Taluk Panchayats and Gram Panchayats. Table 5.4.4 Received and Utilization of Grants by Zilla Panchayat, Mysuru District Year Opening Balance Grant Received State Central government Interest and others Total Grant Received Grand Total Utilization 2008-09 262078343 242774800 434617801 22410137 699802738 961881081 433662498 2009-10 537032380 283840500 812607650 44989005 1141437155 1678469535 1195945682 2010-11 511016901 234006000 983641815 203540562 1217647815 1932205278 1293123076 2011-12 639067100 129141000 538117984 26628382 693887366 1332954466 655860948 2012-13 674104574 295069031 407981200 46912881 749963112 1424067686 843813240 Source: Zilla Panchayat, Mysuru Annual Accounts Report-2008-09 to 2012-13 Table 5.4.4 reveals the data about the grants received and grants utilized by the Zilla Panchayat, Mysuru district for the years during 2008-09 and 2012-13. During the year 2008-09 the Mysuru Zilla panchayat received the grant of 147

Rs. 242774800 from the state government and Rs. 434617801 from central government. Totally it received the total grant of Rs. 699802738 including opening balance of Rs. 262078343 and interest and others Rs. 22410137 its grand total revenue Rs. 961881081. But it utilized only Rs. 433662498. In the year 2009-10, Zilla panchayat received the grant of Rs. 283840500 from the state government and Rs. 812607650 from central government. Totally it received the total grant of Rs. 1141437155 including opening balance of Rs. 537032380 and interest and others Rs. 44989005 its grand total revenue was Rs. 1678469535. But it utilized only Rs. 1195945682. In the year 2010-11, Zilla panchayat received the grant of Rs. 234006000 from the state government and Rs. 983641815 from central government. Totally it received the total grant of Rs. 1217647815 including opening balance of Rs. 511016901 and interest and others Rs. 203540562 its grand total revenue was Rs. 1932205278. But it utilized only Rs. 1293123076. For the year 2011-12, Zilla panchayat received the grant of Rs. 129141000 from the state government and Rs. 538117984 from central government. Totally it received the total grant of Rs. 693887366 including opening balance of Rs. 639067100 and interest and others Rs. 26628382 its grand total revenue was Rs. 1332954466. But it utilized only Rs. 655860948. For the year 2012-13, Zilla panchayat received the grant of Rs. 295069031 from the state government and Rs. 407981200 from central government. Totally it received the total grant of Rs. 749963112 including opening balance of Rs. 674104574 and interest and others Rs. 46912881 its grand total revenue was Rs. 1424067686. But it utilized only Rs. 843813240. Even though the state and central governments have granted more funds to Mysuru Zilla panchayat, it has failed to utilize the fund. During 2008-09 the total revenue of Mysuru Zilla panchayat was Rs. 961881081 but utilization is Rs. 433662498. During 2009-10 total revenue was Rs. 1678469535 and the utilization is Rs. 1195945682. In the year 2010-11 the revenue of Zilla panchayat was Rs. 1932205278 the utilization was Rs. 1293123076. For the year 2011-12 the revenue was Rs. 1332954466 and the utilization was Rs. 655860948. In the year 2012-13 the Zilla panchayat had received the total grant 148

of Rs. 142406786 the utilization was Rs. 843813240. During the year 2008-09 more than 50% of the revenue has not been spent by the Mysuru Zilla panchayat. Central Planning Programmes Grants According to the CFC recommendation, central government has been taken full authority to develop the plans and programmes to implement it. Here under this grant there is no partnership with the state government, but entire grant is released from the central government itself. The grant is released to the state government and it is going to transfer the grants for the Zilla Panchayat and thereafter ZPs will transfer the grants to respective Taluk Panchayats and Gram Panchayats. Example:- Social welfare, Children development programmes, Pradhan Manthri Gram Sadak Yojana etc., 5.5 Summary The Constitution of India envisages the Panchayat as units of selfgovernment in the country. The issue of financial devolution to PRIs was examined by the Government of India. Experts have also suggested certain progressive measures for the economic self-sufficiency of PRIs. The State Finance Commissions are constituted periodically to allocate the funds for PRIs in order to undertake various administrative and developmental functions. The state governments are responsible for monitoring the progress of their intergovernmental fiscal system and evaluate the impact of alternative reforms. The PRIs receive funds from both the consolidated fund of the state government as well as central government to implement district sector and central schemes. The Zilla Panchayats and Taluk Panchayats depend on the government funds to implement district level and taluk level development programmes. But, The GPs can generate their own funds apart from the funds given by the government for implementation of various development programmes. The consolidated funds received by the PRIs are not adequate for undertaking various development projects. The release of general basic grant of local bodies 149

is also not adequate according to the latest statistics. Similarly, Mysuru district has been also received inadequate grants under different headings till recently. The PRIs in Karnataka and Mysuru district do not enjoy the benefit of adequate finance resource mobilization due to certain in-built constraints and limitations. Serious efforts are required to improve the status of finance resource mobilization of PRIs in the state government as well as Mysuru district. 150

References 1. Annual Accounts Report, Mysuru Zilla Panchayat, Mysuru- 2008-09 2. Annual Accounts Report, Mysuru Zilla Panchayat, Mysuru- 2009-10 3. Annual Accounts Report, Mysuru Zilla Panchayat, Mysuru- 2010-11 4. Annual Accounts Report, Mysuru Zilla Panchayat, Mysuru- 2011-12 5. Annual Accounts Report, Mysuru Zilla Panchayat, Mysuru- 2012-13 6. Panchatantra Statistics 2013-14. 7. www.kar.nic.in/finance 151