Acknowledging the key role played by the Local Self Government Institutions (LSGIs) in the fight against COVID-19, Finance Minister K.N. Balagopal has said local governments will get an annual health grant for the next five years, as per the allocation provided by the 15th Finance Commission.
The commission has set aside ₹70,051 crore across India as a health grant for five years. The allocation for Kerala is ₹2,968 crore. Of this, ₹559 crore will be allocated this financial year.
This amount will be utilised for strengthening family health sub-centres, family health centres, community health centres, urban primary health centres, etc. Measures shall be taken for further strengthening of the health institutions by combining the health grants, State government share, and local government share.
“Against the backdrop of the COVID-19 pandemic, it has been generally recognised that the decentralisation implemented in Kerala has played a significant role towards strengthening the health sector. The 15th Finance Commission has appreciated this intervention of the State and has commented that other States shall strengthen their health systems in Kerala model under the leadership of local government institutions. This is a matter of pride for Kerala,” said Mr. Balagopal in his budget speech.
Another allocation for local bodies is for the scheme to reduce extreme poverty as announced by Chief Minister Pinarayi Vijayan soon after taking charge. An amount of ₹10 crore has been initially earmarked for the scheme.
Mr. Balagopal has said local governments have enormous potential in increasing their tax and non-tax revenue, but efforts to mobilise additional revenue by harnessing this potential through rate revision and rule amendments have not taken off for the past few years.
Local government leadership have generally taken a favourable stance in adopting revenue enhancement measures. Once the COVID-19 crisis is over and the economy returns to growth, reforms will be implemented in tax and non-tax revenue matters after considering the recommendations of the State Finance Commission. He has said the government is starting the necessary groundwork needed for that now itself.
