The financial position of Panchayat Raj institutions (PRIs), more so Zilla Parishads in Telangana is quite dismal, given the findings of the pilot study done by the Centre for Economic and Social Studies (CESS).
Telangana’s first State Finance Commission headed by Chairman Rajesham Goud engaged the CESS for a status report on Panchayat Raj Institutions in the State and give suggestions to improve their revenue resources and make them self-reliant.
The two-month pilot study done by CESS in five erstwhile districts of Adilabad, Karimnagar, Warangal, Nalgonda and Ranga Reddy after interacting with ZP chairpersons, chief executive officers, mandal and gram panchayat (GP) representatives and cross section of citizens came out with data from the audited accounts of State that the own sources of revenue (tax and fees) of Zilla Parishads was quite meagre in the last four years from 2014-15 to 2017-18.
The CESS team covered 10 mandals, 20 gram panchayats and eight thandas in the five districts. The team would take about two more months to submit final report including the data sought by Finance Commission if the GPs are able to meet the expenditure on salaries, operation and maintenance of basic services and capital works from their own source of revenue.
The cross section of stakeholders suggested to the CESS team that zilla, mandal parishads should get adequate funds from the State government. Health, education, agriculture and irrigation, among others, should be directly managed by the PRIs and the per capita grant that was fixed 30 years ago should be revised.
No tax revenue
ZPs have no tax revenue. Non-tax revenue and fee constitute their own source of revenue. The assigned revenue i.e transfer of funds from Centre and State in the last four years for Ranga Reddy was about ₹117 crore — ₹29 crore a year — and about ₹18 crore a year to Adilabad ZP.
Only Adilabad, thanks to sand seigniorage, has own revenue share of 5.1% of its total grants. The own source of revenue of ZPs should at least be 10% of assigned income, said Gopinath Reddy, professor in CESS, at a workshop on making rural local bodies finanically sound in Telangana. The GPs earn revenue through levy of house tax, water fees, birth and death certificate fees, income from leasing assets etc. But it is less than ₹1 lakh per year in 65% of the GPs in the five districts including NREGS funds. The house tax is the main source of tax revenue for GPs. The percentage of own revenue to total revenue of GPs accounts for 26% in Ranga Reddy, 28% in Warangal, 17% in Adilabad, 14% in Karimnagar and 8% in Nalgonda.
Mr.Rajesham Goud, Chairman of SFC said their endeavour was to make gram panchayats self-reliant even as State government made a budget allocation of ₹1,500 crore to rural local bodies and ₹1,000 crore to urban local bodies.
Member Secretary Suresh Chanda said that at present ZPs and mandal parishads have no source of income or responsibilities as all as the line departments were executing the works. The local bodies would become self governing units when 29 functions prescribed under Article 243 of Constitution were delegated to them. It was when local bodies have their own tax revenue and mandate to execute works with their functionaries, they would become accountable to people.