1. F INANCIAL D EVOLUTION IN O DISHA : C URRENT SCENARIO & R ESOURCE ENHANCEMENT FOR DECENTRALISED PLANNING P.K.Biswal, I.A.S Additional Secretary to Government P&C Department

2. D EVOLUTION : M EANING The transfer or delegation to a lower level especially from central government to local or regional administration. Inter se allocation of resources amongst different tiers of government or amongst the governments at the same level. The underlying principle is equitable distribution of resources and to empower the lower levels of government.

3. Types of Devolution Vertical From central government to state governments and local governments Horizontal Amongst state governments or local governments

4. C ONSTITUTIONAL A RRANGEMENT Article 280 – The distribution between the Union and the states of the net proceeds of taxes which are to be or may be, divided between them Ariticle 280 (3)(bb) & (c ) – Measures to augment the Consolidated Fund of a State to supplement the resources of panchayats and municipalities based on the recommendations of the respective State Finance Commissions. Article 243(I) – The distribution between State and PRIs and the Municipalities of the net proceeds of taxes, duties, tolls and fees leviable by the State and the allocation between the Panchayats at all levels and the Municipalities of their respective shares of such proceeds.

5. R OLE OF F INANCE C OMMISSION Under article 280 the President constitutes a finance commission every 5 years to recommend devolution of resources between the center & the states and among the states. Under article 243 (I) read with article 243 (Y) the Governor appoints a finance commission at the state level every five years to recommend devolution of resources between the state government and the PRIs and the ULBs. While the central finance commission is mandated to recommend supplementary resources for the rural & urban local bodies in addition to transfer the state resources recommended by state finance commission, the SFC is required to recommend to the central finance commission, the volume of such supplementary resources for the state from the Union. The 73 rd & 74 th amendments bestowed constitutional status to the PRIs & ULBs and also provided transfer of resources from the Union & the State governments on the basis of respective finance commissions.

6. DEVOLUTION BY 13 TH & 14 TH F INANCE C OMMISSION The Finance commission grants : General basic grant General performance grant Performance grant on : 6 conditions by 13 th FC for PRIs

7. C OMPARATIVE S TUDY Basic Grant – Rs 1694.09 cr. Performance Grant – Rs 896.89 cr. TOTAL: Rs. 2590.98 cr Basic Grant – Rs 7965.28 cr. Performance Grant – Rs 885.03 cr. TOTAL: Rs. 8850.31 cr 13 th Finance Commission 14 th Finance Commission

8. C OMPARATIVE S TUDY 3 rd SFC Recommendation for PRIs Action Taken by Govt. i)Devolution – Rs. 3360.64 crore ii)Compensation & Assignment – Rs 0.00 cr iii)Grant in Aid – Rs 2224.45 cr TOTAL : Rs. 5585.09 cr State Govt. met the devolution amount out of 13 th FC award and treated the differential amount as SFC award.

9. C OMPARATIVE S TUDY 4 th SFC Recommendation for PRIs Action Taken by Govt. i)Devolution – Rs. 2468.85 cr ii)Compensation & Assignment – Rs 3001.70 cr i)Grant in Aid – Rs 2234.52 cr TOTAL : Rs. 7705.07 cr -- Rs 3291.85 cr -- Rs 2675.93 cr -- Rs 2234.52 cr -- Rs7379.30 cr

10. COMPARATIVE POSITION OF TRANSFER TO PRI S 13 FC – Rs. 2590.98 cr. 3 rd SFC – Rs. 5585.09 cr. TOTAL – Rs. 8176.07 cr. 14 FC – Rs. 8850.31 cr. 4 th SFC – Rs. 7705.07 cr. TOTAL – Rs. 16555.38 cr. Total transfer recommended for 2010-15 Total transfer recommended for 2015 -20

11. WAY FORWARD The enhanced transfer to the PRIs has opened the avenue for decentralised planning. It needs capacity building at the PRI level for formulation and execution of plans. A standard template for GP Planning can be designed. Hand-holding support is required for grass-root planning. The available resource envelope can be increased by convergence with other schemes like MGNREGS.

12. T HANK YOU