BENGALURU: The Karnataka government is keeping its fingers crossed for the announcements made in the Union Budget on February 1, particularly clauses pertaining to the 16th Finance Commission, in sanctioning
funds to panchayats and urban local bodies.
The State does not want to lose its share of around Rs 3,000 crore under the 15th Finance Commission, which is yet to be cleared and released. One of the important clauses of the 15th Finance Commission recommendations reads that the amount must be utilised by elected representatives in zilla and taluk panchayats and urban local bodies for executing listed works. Simply put, with panchayat and corporation elections not being held, the money will not be released.
“The funds have been withheld because the state government has not held panchayat and Bengaluru urban local body elections. The term of the 15th Finance Commission ends on March 31, 2026. By that time if elections are not held, the money will be not released by the Centre. The State will then stand to lose around Rs 3,000 crore permanently,” explained a finance expert from the State government.
Dr C Narayanswamy, chairman of the 5th Karnataka State Finance Commission, said discussions with the Central Finance Commission have been held thrice so far.
Many suggestions and recommendations have been made for constitution of the 16th Finance Commission, one of them highlighting the amendment of this clause, Dr Narayanswamy said.
“We are now hoping that this recommendation is included in the Union Budget on February 1, failing which corporations and panchayats will lose out on their share of funds. It is not fair to penalise panchayats and urban local bodies.
Conducting elections is the duty of the State Election Commission and State government. Development work in panchayat and corporation limits should not be affected,” he said.
Sources in the state finance commission added that other methods of penalising the State government for delaying elections were also recommended. One was to cut grants or funds given to the State government under various Central schemes, or
reduce the share of Central government funds to state projects like Metro, Suburban Rail and others.
The State government is also hoping for additional funds for panchayats and Bengaluru in particular, keeping in mind the growth of Bengaluru city and support the panchayats are offering in it.