BHUBANESWAR: The Odisha State Finance Commission has recommended Rs 20,771.64 crore for local bodies during the five-year period from 2020 to 2025 against a fund requirement projected at Rs 50,282.50 crore.
The report of the Fifth Finance Commission along with the action taken report was placed in the Assembly by Finance Minister Niranjan Pujhari on Monday. The Commission has recommended that the 15th Finance Commission should consider augmentation of the State’s consolidated fund by Rs 29,510.86 crore to supplement the resources of local bodies over and above the fund recommended for transfer from the State’s resources.
According to the recommendations, devolution of funds to panchayat raj institutions (PRIs) and urban local bodies (ULBs) will be Rs 4575.45 crore and Rs 1525.25 crore respectively out of the total devolution of Rs 6100.7 crore. Devolution recommended for Gram Panchayats is Rs 3202.40 crore, Rs 917.75 crore for Panchayat Samitis and Rs 455.3 crore for Zilla Parishads.
Similarly, the Commission has recommended Rs 619.75 crore, Rs 650 crore and Rs 255.5 crore for municipal corporations, municipalities and Notified Area Councils (NACs) respectively out of the total devolution of Rs 1525.25 crore for the ULBs. Since entry tax, advertisement tax and entertainment tax have been subsumed under GST, the Commission has recommended 7.46 per cent of the State GST (SGST) revenue to be assigned to local bodies in lieu of these taxes. The panel further maintained that 8.03 pc net proceeds of Motor Vehicle Tax should be assigned to PRIs and ULBs for maintenance and improvement of road infrastructure.
The panel has also recommended allocation of Rs 3075.26 crore towards salary and establishment cost of PRIs. Besides, the Commission has recommended Rs 576.03 crore towards enhanced sitting fee, honorarium, travel allowance and daily allowance of elected representatives of the PRIs.
The Commission maintained that Rs 546.46 crore should be allocated for maintenance and improvement of road infrastructure in rural areas out of MV Tax during the award period. It has also set aside Rs 3225.20 crore for salary and establishment cost and Rs 12.8 crore for revised sitting fee and honorarium of the elected representatives of the ULBs. Besides, Rs 386.18 crore has been assigned from the proceeds of the MV Tax towards maintenance and improvement of road infrastructure.
The Commission has recommended Rs 1,000 crore for meeting drinking water needs of PRIs with special emphasis on water stressed pockets.