ANNEXURES · 2020. 11. 12. · Annexures Fifth State Finance Commission (c) Government of TamilNadu...

ANNEXURES

Contents

Chapter Annexure Page

Chapter - I Introduction (1) – (4) 275

Chapter - II Approach and Methodology (1) – (4) 300

Chapter - III Status of Implementation of Fourth SFC’s Recommendations (1) – (3) 321

Chapter - IV Assessment of Finances of Rural Local Bodies (1) – (4) 329

Chapter - V Assessment of Finances of Urban Local Bodies (1) – (5) 342

Chapter - VIII Assessment of State’s Finances (1) – (3) 345

Chapter - X Scheme of Devolution (1) – (6) 355

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Fifth State Finance Commission Annexures

Annexure - I (1)

Constitution of State Finance Commissions

Sl.No. Details

First State Finance

Commission

Second State Finance

Commission

Third State Finance

Commission

Fourth State Finance

Commission 1. Date of Constitution 23.04.1994 01.12.1999 01.12.2004 01.12.2009

2. a) G.O. in which Constituted.

G.O.Ms.No.350, Fin(Res) Dept., Dt: 23.04.1994 &G.O.Ms.No.161, RD Dept., Dt: 06.09.1994

G.O.Ms.No.518, Fin (Res) Dept., Dt: 01.12.1999

G.O.Ms.No.573, Fin (FC.IV)Dept., Dt: 01.12.2004

G.O.Ms.No.549, Fin (FC.IV)Dept., Dt: 01.12.2009

b) G.O. in which ToR were issued.



G.O.Ms.No.584, Fin(FC.IV)Dept., Dt: 14.12.2004

G.O.Ms.No.549, Fin(FC.IV)Dept., Dt: 01.12.2009

3. a) Due date for submission of Report. 31.10.1995 31.10.2001

31.05.2006. Term extended further till 30.09.2006

31.05.2011. Term extended further till 30.09.2011

b) Actual date of submission of Report to the Government.

29.11.1996 21.05.2001 30.09.2006 30.09.2011

4.

Action Taken Report placed in the Legislative Assembly on

28.04.1997 08.05.2002 10.05.2007 14.05.2013

5. Award Period 1997-98 to 2001-02

2002-03 to 2006-07

2007-08 to 2011-12

2012-13 to 2016-17

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Annexure - I (2)

© GOVERNMENT OF TAMIL NADU MANUSCRIPT SERIES

2014

FINANCE (FINANCE COMMISSION-IV) DEPARTMENT

G.O.No.281, DATED 1stDecember, 2014

(Karthigai 15, Jaya, Thiruvalluvar Aandu 2045)

COMMISSION – Fifth State Finance Commission – To study the financial position of Village Panchayats, Panchayat Union Councils, District Panchayats, Town Panchayats, Municipalities and Municipal Corporations – Constitution of the Fifth State Finance Commission and Terms of Reference – Orders issued-Notified.

ORDER:

The appended Notification constituting the Fifth State Finance Commission with a Chairman and five other Members to study the financial position of Village Panchayats, Panchayat Union Councils, District Panchayats, Town Panchayats, Municipalities and Municipal Corporations and containing the Terms of Reference to the Commission shall be published in an Extra-ordinary issue of Tamil Nadu Government Gazette, dated: 01.12.2014.

(By Order of the Governor)

MOHAN VERGHESE CHUNKATH,

CHIEF SECRETARY TO GOVERNMENT

To The Works Manager, Government Central Press, Chennai – 600079. (for publication of the Notification) Thiru S. Krishnan, I.A.S., Chairman, Fifth State Finance Commission. Chennai. Thiru B. Senguttuvan, M.A., M.L., Member of Parliament, Vellore, Non – offical Member, Fifth State Finance Commission, Chennai. The Director of Municipal Administration, Chepauk, Chennai - 5. The Director of Town Panchayats, Kuralagam Buildings, Chennai -108. The Director of Rural Development and Panchayat Raj, Panagal Buildings, No.1, Jeenis Road, Saidapet, Chennai - 15. All Secretaries to Government, Chennai - 9. All Departments of Secretariat, Chennai - 9. The Commissioner of Municipal Corporation of Chennai, Madurai, Coimbatore, Tiruchirapalli, Tirunelveli, Salem, Tiruppur, Erode, Vellore and Thoothukudi. The Principal Accountant General (Audit-1), Chennai - 18. The Accountant General (A&E), Chennai – 18.

/p.t.o./

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-:2:- The Director of Local Fund Audit, Chennai - 108. All Heads of Departments. All District Collectors (Except Chennai). All Assistant Directors of Panchayats. All Assistant Directors of Town Panchayats. All Regional Directors of Municipal Administration. The Secretary to Governor, Raj Bhavan, Chennai - 25. The Secretary to Chief Minister, Chennai - 9. The Director of Information and Public Relations, Chennai - 9. The Registrar of High Court, Chennai – 104. Public (Special–A) Department, Chennai - 9. The Legislative Assembly Secretariat, Chennai - 9. Law Department, Chennai - 9. Stock File / Spare Copies.

/Forwarded by order/

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APPENDIX

NOTIFICATION

In exercise of the powers conferred by clause (1) of Article 243–I and clause (1) of Article 243–Y of the Constitution of India and sub-section (1) of section 198 of the Tamil Nadu Panchayats Act, 1994 (Tamil Nadu Act 21 of 1994) read with the Tamil Nadu State Finance Commission, Chairman and other Members (Conditions of Service) Rules, 1994, sub-section (1) of section 162–A of the Chennai City Municipal Corporation Act, 1919 (Tamil Nadu Act IV of 1919), sub-section (1) of section 124–B of the Tamil Nadu District Municipalities Act, 1920 (Tamil Nadu Act V of 1920), sub-section (1) of section 193 –A of the Madurai City Municipal Corporation Act, 1971 (Tamil Nadu Act 15 of 1971), sub-section (1) of section 193–A of the Coimbatore City Municipal Corporation Act, 1981 (TamilNadu Act 25 of 1981) read with section 8 of the Tiruchirappalli City Municipal Corporation Act, 1994 (Tamil Nadu Act 27 of 1994), section 8 of the Tirunelveli City Municipal Corporation Act, 1994 (Tamil Nadu Act 28 of 1994), section 8 of the Salem City Municipal Corporation Act, 1994 (Tamil Nadu Act 29 of 1994), section 8 of the Tiruppur City Municipal Corporation Act, 2008 (Tamil Nadu Act 7 of 2008), section 8 of the Erode City Municipal Corporation Act, 2008 (Tamil Nadu Act 8 of 2008), section 8 of the Vellore City Municipal Corporation Act, 2008 (Tamil Nadu Act 26 of 2008) and section 8 of the Thoothukudi City Municipal Corporation Act, 2008 (Tamil Nadu Act 27 of 2008), the Governor of Tamil Nadu here by constitutes the Fifth State Finance Commission with a Chairman and five other Members. They are as follows:-

(1) Chairman : Thiru S. Krishnan, I.A.S.,

(2) Non-official Member : Thiru B. Senguttuvan, M.A.,M.L., Member of Parliament, Vellore

(3) Ex-officio Member : Director of Municipal Administration

(4) Ex-officio Member : Director of Town Panchayats

(5) Ex-officio Member : Director of Rural Development and Panchayat Raj

The Orders for appointing the Member –Secretary will be issued separately later.

2. The period of office of the Chairman and other Members of the Fifth State Finance Commission shall be upto 31

st

May 2016, from the date on which they respectively assume charges.

3. The Commission shall review the financial position of the rural and urban local bodies namely Village Panchayats, Panchayat Union Councils, District Panchayats, Town Panchayats, Municipalities and

/p.t.o./

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Municipal Corporations and make recommendations as to–

(a) the principles which should govern–

(i) the distribution between the State and the said local bodies of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them and the allocation between the said local bodies of their respective shares of such proceeds;

(ii) the determination of taxes, duties, tolls and fees which may be assigned to, or appropriated by, the said local bodies;

(iii) the grants-in-aid to the said local bodies from the Consolidated Fund of the State;

(b) the measures needed to improve the financial position of the local bodies and to suggest possible new avenues for tapping resources in rural and urban local bodies keeping in mind the local body tax structure in other States.

4. The Commission shall review the financial position of the local bodies as on 31st March 2015 based on the present re-organized status of local bodies.

5. In making its recommendations, the Commission shall have regard to the resources of the State Government, the demands there on, in particular the expenditure of the State on pension and debt servicing, including the debt servicing on behalf of local bodies or other committed expenditure or liabilities of the State Government and the need to generate adequate surplus on revenue account for State’s commitments on capital account and other commitments of the State Government.

6. The commission shall make its report available by 31st

May2016 covering the period of five years commencing on 1

st

April 2017.

December 1, 2014, K.ROSAIAH Chennai. Governor of TamilNadu

/True Copy/

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(c) Government of TamilNadu Manuscript Series

2016

FINANCE (FINANCE COMMISSION-IV) DEPARTMENT

G.O.Ms.No.164,Dated 01st

June 2016 (Thunmugi, Vaikasi 19– Thiruvalluvar Aandu – 2047)

ABSTRACT

Commission – Fifth State Finance Commission– To study the financial position of Village Panchayats, Panchayat Union Councils, District Panchayats, Town Panchayats, Municipalities and Municipal Corporations – Constitution of the Fifth State Finance Commission – Constituted by the Governor of Tamil Nadu – Extension of the tenure of the Commission by five months i.e., upto 31.10.2016 beyond 31.05.2016 – Orders – Issued – Further Amendment - Issued.

Read the following: 1. G.O.Ms.No.281/Finance (FC-IV) Department, Dated: 01.12.2014.

2. G.O.Ms.No.282/Finance (FC-IV) Department, Dated: 03.12.2014.

3. Chairman, Fifth State Finance Commission D.O.

Letter No.10/ 5thSFC/A/2015, Dated:25.03.2016.

-o0o-

ORDER:

The appended Notification shall be published in an Extra ordinary issue of Tamil Nadu Government Gazette, dated: 1stJune2016.

(BY ORDER OF THE GOVERNOR)

K.GNANADESIKAN CHIEF SECRETARY TO GOVERNMENT

To The Works Manager, Government Central Press, Chennai–79. (for publication of the Notification) The Chairman, Fifth State Finance Commission, E.V.R Periyaar Maaligai, Nandanam, Chennai - 35. The Member Secretary, Fifth State Finance Commission, E.V.R Periyaar Maaligai, Nandanam, Chennai-35. The Non-official Member, Fifth State Finance Commission,

E.V.R Periyaar Maaligai, Nandanam, Chennai-35.

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The Director of Rural Development and Panchayat Raj, Panagal Buildings, No.1 Jeenis Road, Saidapet, Chennai - 15. The Commissioner of Municipal Administration, Chepauk, Chennai - 5. The Director of Town Panchayats, Kuralagam Buildings, Chennai – 600 108. All Secretaries to Government, Chennai - 9. All Departments of Secretariat, Chennai - 9. The Commissioner, Corporation of Chennai, Madurai, Coimbatore, Tiruchirappalli, Tirunelveli, Salem, Tiruppur, Erode, Vellore, Thoothukudi, Thanjavur and Dindigul The Principal Accountant General (G&SSA), 361, AnnaSalai,

Teynampet, Chennai – 600 018. The Accountant General (Audit-1), 361, AnnaSalai,

Teynampet, Chennai – 600 018. The Accountant General (A&E), 361, AnnaSalai, Teynampet, Chennai-600018. The Director of Local Fund Audit, Chennai - 108. All Heads of Departments All District Collectors (Except Chennai). All Assistant Directors of Panchayats. All Assistant Directors of Town Panchayats. All Regional Directors of Municipal Administration. The Secretary to Governor, Raj Bhavan, Chennai - 25. The Secretary to Chief Minister, Chennai - 9. The Senior Personnel Assistant to Minister of Finance, Chennai - 9. The Director of Information and Public Relations, Chennai - 9. The Registrar of High Court, Chennai – 104. Public (Special–A) Department, Chennai –600 009. The Legislative Assembly Secretariat, Chennai - 9. Law Department, Chennai - 9. Stock File / Spare Copies.

/Forwarded by Order/

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APPENDIX

NOTIFICATION

Further to Finance Department’s Notification No.II(1)/FIN/38(b)/2014,

dated: 01.12.2014, published at pages 1 – 3 of part II section 1 of the Tamil

Nadu Government Gazette Extraordinary, Dated: 1st

December, 2014, the

Governor of Tamil Nadu here by makes following amendment to the

Finance Department Notification No.II(1)/FIN/38(b)/2014 of the Tamil Nadu

Government Gazette, Extraordinary, dated: 1st

December 2014.

2. The amendment here by made shall come into force on and from

the 1stJune 2016.

AMENDMENT

In the said Notification:-

Wherever the expression “31st

May 2016” occur, the expression

“31st

October 2016”, shall be substituted.

K.GNANADESIKAN CHIEF SECRETARY TO GOVERNMENT

/True Copy/

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Annexure - I (3)

A detailed note on the Recommendations of all Finance Commissions of theState and Action Taken by the Government on the Recommendations

I - DEVOLUTION

First SFC

Whole Devolution divided into two pools Pool A – Taxes which belong to local bodies but collected by Government – surcharge on

stamp duty, local cess and local cess surcharge and entertainment tax – to be devolved to local bodies (Assigned Revenue)

Pool B – All other States Own Tax Revenue to be apportioned to local bodies: 8% in 1997-98; 9% in 1998-99; 10% in 1999-2000; 11% in 2000-01 and 12% in 2001-02. (1997-98-Rs.620 crores)

Government accepted devolution of 8% of SOTR for whole award period

Second SFC

Pool A: Assigned Revenue – existing mode of distribution to continue Pool B: Global sharing from net SOTR to local bodies in the following ration: 8% in 2002-03 and 2003-04, 9% in 2004-05 and 2005-06 and 10% in 2006-07 Government accepted sharing of 8% for award period Also recommended sharing of 5% of State’s Share of Central Taxes with local bodies Government did not accept the recommendation to share a portion of Central Taxes

Third SFC

Pool A: Assigned Revenue – to be shared with the local bodies Government decided to pool the assigned revenue at the State level for rural local bodies Pool B: Net SOTR – to be shared in the ration of 10% with local bodies Government accepted the recommendation with modifications – 9% in 2007- 08 & 2008-09;

9.5% in 2009-10; and 10% in 2010-11 & 2011-12. Pool C: Specific purpose grants for local bodies of 0.5 to 1 % of SOTR Government did not accept this recommendation

Fourth SFC

Pool A: Assigned Revenue – recommended transfer without diversion to State level pools for infrastructure creation in local bodies

Not accepted Pool B: Sharing from net SOTR recommended at 10% Accepted by Government

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II - Allocation between Rural and Urban Local Bodies

SFC

Percentage of Pool B Fund to General Devolution for

Equalisation and Incentive Funds

Balance percentage of Pool B Fund distributed between

PRIs ULBs

First 15 60 40

Second 13 58 42

Third - 58 42

Fourth - 56* 44

* The Government accepted 58:42 for Fourth SFC award period

III - Distribution of Funds between different tiers of Local Bodies

SFC

Rural Local Bodies Urban Local Bodies District

Panchayats Panchayat

Unions Village

Panchayats Town

Panchayats Municipalities Municipal Corporations

First 14% (as block grant)

43% 43% 38% 31% 31%

Second To meet salary

expenditure

40% 60%* 35% 32% 33%

Third 8% 32% 60% 29%** 41% 30%

Fourth 8% 32% 60% 31% 29% 40%

Note * After allocating the proposed salary requirements of District Panchayats, the remaining fund would be distributed between Village Panchayats and Panchayat Unions ** Vertical sharing among ULBs is based on following criteria: Total Population - 32% Female population - 32% Slum population - 16% Area - 10% Debt burden - 10%

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IV - Criteria for Horizontal Distribution First SFC

Criterion Panchayat Union

VPs TPs Municipality Corporation

Total Population 50% 50% 45% 45% 40% SC & ST Population 25% 15% 20% 10% 10% Financial viability 25% - - - - Per capita House Tax Collection Performance

- 15% - - -

Core Civic Services Deficiency - 20% - - - Per Capita Own Resources - - 15% 15% 15% Per Capita Expenses on Core Services

- - 20% 30% 35%

Total 100% 100% 100% 100% 100% Second SFC



Total Population 60% 60% 50% 50% 50% SC & ST Population 10% 10% 10% 10% 10% (Slum

population) Agricultural Labourers 10% 10% - - - Area 10% 10% - - - Asset Maintenance - 10% 20% 10% 10% Resource Gap on inverse per capita land revenue

10% - - - -

Per capita own income - - 20% 20% 20% Salary and pension expenses - - - 10% 10%

Total 100% 100% 100% 100% 100% Government did not accept the criteria recommended by 2nd SFC and determined following criteria Total Population 40% Women Population 40% SC / ST Population including Slum Population 20%

Total 100% Third SFC



Total Population 32% 32% 32% 32% 32% Women Population 32% 32% 32% 32% 32% Financial viability 25% - - - - SC / ST Population and Slum Population

10% 16% 16% 16% 16%

Area 20% 20% 10% 10% 10% Debt Burden - - 10% 10% 10%

Total 100% 100% 100% 100% 100% Fourth SFC



Total Population (2011 census) 60% 60% 80% 80% 80% SC / ST Population 20% 20% - - - Area 20% 20% 15% 15% 15% Debt Outstanding - - 5% 5% 5%

Total 100% 100% 100% 100% 100%

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V - Other Important Recommendations First SFC

Recommendation Status Introduction of equalization fund Accepted Introduction of incentive fund Accepted Property Tax reforms with quinquennial revision Accepted Fixed Water Supply norms Accepted Creation of capital fund by allocating 10-15% from the Revenue of ULBs Accepted Switching over from house tax to property tax in Town Panchayats Accepted Taking over of pension liabilities of the Local Bodies by the Government Not Accepted Second SFC

Recommendation Status Re-classification of Local Bodies based on 1991 census Accepted with

modification Incentivization for taxation efforts Accepted with

modification Equalisation funds towards self financing projects on sewerage, drainage and over bridges

Accepted

Strengthening of Gram Sabhas Accepted Debt relief package to ULBs Accepted Time frame for audit and placement of LB accounts before assembly was recommended

Accepted

Fixing fiscal responsibility on local bodies by limiting salary and pension commitment to 49%

Accepted

Third SFC

Recommendation Status Incentivization of Solid Waste Management Accepted Tax mapping by GIS Accepted Devolution and distribution based on area Accepted Incentivization to debt repayment as per schedule Accepted with

modification Re-classification of Local Body on revenue basis Partially accepted with

individual examination of recommendations

Fourth SFC

Recommendation Status Special grant of Rs.200 crore earmarked for Local Bodies out of devolution for Solid Waste Management activities

Accepted

Infrastructure and O & M Gap filling fund concept recommended Accepted Award and incentives for best practice recommended Accepted

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VI - Action taken by the Government on the SFC recommendations:

SFC Topic

Number of recommendations

Total Accepted Not Accepted

Under examination

Accepted in

Principle Others

First

Devolution 22 22 - - - - Taxes and related issues

195 93 97 2 - 3

Others 196 - 1 - 129 66 Total 413 115 98 2 129 69

Second

Devolution 36 26 - 10 - - Resource base 72 60 7 5 - -

Others 278 197 57 25 - -

Total 386 283 64 40 - -

Third

Devolution 22 5 8 - 7 2 Resource base 117 46 44 - 12 15

Grants in aid 5 2 - - - 3

Others 164 38 83 52 15 28 Total 308 91 135 52 34 48

Fourth

Devolution 19 18 - - - 1 Resource base 66 59 3 1 1 2

Others 45 35 4 4 2 - Total 130 112 7 5 3 3

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Annexure - I (4)

Summary of recommendations of Fourteenth Central Finance

Commission on Local Governments

i. The local bodies should be required to spend the grants only on the

basic services within the functions assigned to them under relevant

legislations. (para 9.56)

ii. The books of accounts prepared by the local bodies should distinctly

capture income on account of own taxes and non-taxes, assigned

taxes, devolution and grants from the State, grants from the Finance

Commission and grants for any agency functions assigned by the

Union and State Governments. In addition to the above, we also

recommend that the technical guidance and support arrangements by

the C & AG should be continued and the States should take action to

facilitate local bodies to compile accounts and have them audited in

time. (para 9.61)

iii. The distribution of grants to the States using 2011 population data with

weight of 90 per cent and area with weight of 10 per cent. The grant to

each State will be divided into two - a grant to duly constituted gram

panchayats and a grant to duly constituted municipalities, on the basis

of urban and rural population of that State using the data of Census

2011. (para 9.64)

iv. The total size of the grant to be Rs. 2,87,436 crore for the period 2015 -

20, constituting an assistance of Rs. 488 per capita per annum at an

aggregate level Of this, the grant recommended to panchayats is Rs.

2,00,292.2 crore and that to municipalities is Rs. 87,143.8 crore. The

grant assessed by us for each State for each year is fixed. (para 9.69)

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v. The grants are recommended in two parts - a basic grant and a

performance grant for duly constituted gram panchayats and

municipalities. In the case of gram panchayats, 90 per cent of the grant

will be the basic grant and 10 per cent will be the performance grant. In

the case of municipalities, the division between basic and performance

grant will be on a 80:20 basis. The shares of the States for these

grants are set out in Annex 9.1. (para 9.70)

vi. The grants should go to gram panchayats, which are directly

responsible for the delivery of basic services, without any share for

other levels. We expect that the State Governments will take care of

the needs of the other levels. The earmarked basic grants for gram

panchayats will be distributed among them, using the formula

prescribed by the respective SFCs for the distribution of resources.

Similarly, the basic grant for urban local bodies will be divided into tier-

wise shares and distributed across each tier, namely the municipal

corporations, municipalities (the tier II urban local bodies) and the

nagar panchayats (the tier III local bodies) using the formula given by

the respective SFCs. The State Governments should apply the

distribution formula of the most recent SFC, whose recommendations

have been accepted. (para 9.72)

vii. In case the SFC formula is not available, then the share of each gram

panchayat as specified above should be distributed across the entities

using 2011 population with a weight of 90 per cent and area with a

weight of 10 per cent. In the case of urban local bodies, the share of

each of the three tiers will be determined on the basis of population of

2011 with a weight of 90 per cent and area with a weight of 10 per

cent, and then distributed among the entities in each tier in proportion

to the population of 2011 and area in the ratio of 90:10. (para 9.73)

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viii. Performance grants are provided to address the following issues: (i)

making available reliable data on local bodies' receipt and expenditure

through audited accounts; and (ii) improvement in own revenues. In

addition, the urban local bodies will have to measure and publish

service level benchmarks for basic services. These performance grants

will be disbursed from the second year of our award period, that is,

2016-17 onwards, so as to enable sufficient time to State Governments

and the local bodies to put in place a scheme and mechanism for

implementation. (para 9.75)

ix. To be eligible for performance grants, the gram panchayats will have to

submit audited annual accounts that relate to a year not earlier than

two years preceding the year in which the gram panchayat seeks to

claim the performance grant. It will also have to show an increase in

the own revenues of the local body over the preceding year, as

reflected in the audited accounts. To illustrate, the audited accounts

required for performance grants in 2016-17 will be for the year 2014-

15; for performance grants in 2017-18, the audited accounts will be for

the year 2015-16; for performance grants in 2018-19, the audited

accounts will be for 2016-17; and for performance grants in 2019-20,

the audited accounts will be for 2017-18. (para 9.76)

x. It may be better that the detailed procedure for disbursal of the

performance grant to gram panchayats based on revenue improvement

be designed by the State Governments concerned, keeping in view the

two conditions given above. The operational criteria, including the

quantum of incentive to be given, is left to the discretion of the State

Governments. In case some amount of the performance grant remains

after disbursement to the eligible gram panchayats, this undisbursed

amount should be distributed on an equitable basis among all the

eligible gram panchayats. The scheme for disbursement of the

performance grant will be notified by the State Governments latest by

March 2016, in order to enable the preparation of the eligibility list of

local bodies entitled to them. The concerned Ministries of the Union

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Government will also be informed in order to facilitate release of the

installment of performance grants. (para 9.77)

xi. detailed procedure for the disbursal of the performance grant to urban

local bodies would have to be designed by the State Governments

concerned, subject to certain eligibility criteria. To be eligible, the urban

local body will have to submit audited annual accounts that relate to a

year not earlier than two years preceding the year in which it seeks to

claim the performance grant. It will also have to show an increase in

own revenues over the preceding year, as reflected in these audited

accounts. In addition, it must publish the service level benchmarks

relating to basic urban services each year for the period of the award

and make it publically available. The service level benchmarks of the

Ministry of Urban Development may be used for this purpose. The

improvement in revenues will be determined on the basis of these

audited accounts and on no other basis. For computing the increase in

own revenues in a particular year, the proceeds from octroi and entry

tax must be excluded. In case some amount of the performance grant

remains after disbursement to the eligible urban local bodies, the

undisbursed amount should be distributed on an equitable basis

among all the eligible urban local bodies that had fulfilled the conditions

for getting the performance grant. (para 9.78)

xii. These guidelines for the disbursement of the rural and urban

performance grants will remain in force for the period of our award. We

recommend that the Union Government accept the detailed procedure

prepared by the State which incorporates our broad guidelines without

imposing any further conditions. (para 9.79)

xiii. No further conditions or directions other than those indicated should be

imposed either by the Union or the State Governments for the release

of funds. (para 9.80)

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xiv. The recommended grants shall be released in two installments each

year in June and October. This will enable timely flows to local bodies

during the year, enabling them to plan and execute the works better.

We recommend that 50 per cent of the basic grant for the year be

released to the State as the first installment of the year. The remaining

basic grant and the full performance grant for the year may be released

as the second installment for the year. The States should release the

grants to the gram panchayats and municipalities within fifteen days of

it being credited to their account by the Union Government. In case of

delay, the State Governments must release the installment with interest

paid from its own funds. (para 9.81)

xv. We recommend that stern action should be ensured if irregularities in

the application of funds are noticed or pointed out. (para 9.82)

xvi. The State Governments should strengthen SFCs. This would involve

timely constitution, proper administrative support and adequate

resources for smooth functioning and timely placement of the SFC

report before State legislature, with action taken notes. (para 9.84)

xvii. The existing rules be reviewed and amplified to facilitate the levy of

property tax and the granting of exemptions be minimised. The

assessment of properties may be done every four or five years and the

urban local bodies should introduce the system of self-assessment. We

recommend that action be taken by the States to share information

regarding property tax among the municipalities, State and Union

Governments. (para 9.90)

xviii. The levy of vacant land tax by peri-urban panchayats be considered. In

addition, a part of land conversion charges can be shared by State

Governments with municipalities and panchayats. (para. 9.91)

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xix. The States should review the position and prepare a clear framework

of rules for the levy of betterment tax. (para 9.92)

xx. The States may like to consider steps to empower local bodies to

impose advertisement tax and improve own revenues from this source.

(para 9.93)

xxi. The states review the structure of entertainment tax and take action to

increase its scope to cover more and newer forms of entertainment.

(para 9.94)

xxii. Raising the ceiling of professions tax from Rs. 2,500 to Rs. 12,000 per

annum. We further recommend that Article 276(2) of the Constitution

may be amended to increase the limits on the imposition of professions

tax by States. The amendment may also vest the power to impose

limits on Parliament with the caveat that the limits should adhere to the

Finance Commission's recommendations and the Union Government

should prescribe a uniform limit for all States. (para 9.97)

xxiii. The State Governments take action to assign productive local assets to

the panchayats, put in place enabling rules for collection and institute

systems so that they can obtain the best returns while leasing or

renting common resources. (para 9.98)

xxiv. The urban local bodies rationalise their service charges in a way that

they are able to at least recover the operation and maintenance costs

from the beneficiaries. (para 9.99)

xxv. The mining puts a burden on the local environment and infrastructure,

and therefore, it is appropriate that some of the income from royalties

be shared with the local body in whose jurisdiction the mining is done.

This would help the local body ameliorate the effects of mining on the

local population. (para 9.101)

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xxvi. The Union and State Governments examine in depth the issue of

properly compensating local bodies for the civic services provided by

them to government properties and take necessary action, including

enacting suitable legislation, in this regard. (para 9.102)

xxvii. The local bodies and States explore the issuance of municipal bonds

as a source of finance with suitable support from the Union

Government. The States may allow the larger municipal corporations to

directly approach the markets while an intermediary could be set up to

assist medium and small municipalities who may not have the capacity

to access the markets directly. (para 9.107)

xxviii. The Union Government to consider a larger, sustained and more

effective direct intervention for the upgradation of administration as well

as development of the areas covered under the proviso to Article

275(1) and excluded from the consideration of Finance Commissions in

the ToR, in order to bring such areas on par with other areas. (para

9.110)

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Annexure - II (1)

RULES OF PROCEDURE OF THE

TAMIL NADU FIFTH STATE FINANCE COMMISSION

Tamil Nadu Fifth State Finance Commission has been constituted vide State

Government’s Notification issued in G.O. Ms. No. 281, Finance (FC-IV) Department,

Dated 01-12-2014, under the provisions of article 243-I and 243-Y of the Constitution

and in pursuance of the provisions in the relevant Tamil Nadu Acts.

Clause 3 of the Article 243-I of the Constitution of India states that the

Commission shall determine their procedure. Tamil Nadu Fifth State Finance

Commission has accordingly devised its procedure, taking due note of the Terms of

Reference issued vide G.O. Ms. No. 281, Finance (FC-IV) Department, Dated: 01-

12-2014. Rules for the conduct of the Tamil Nadu Fifth State Finance Commission

are as follows:-

I. For the Commission

i. Formal meetings of the Commission shall be held as and

when necessary for hearing the evidence or for meeting the

representatives of the State Government and Rural and

Urban Local Bodies. The time and place of such meeting

shall be fixed by the Commission.

ii. Internal meetings of the Commission shall be informal.

iii. All meetings of the Commission shall be held in private

session.

iv. Meeting shall ordinarily be so arranged that all members are

present. But, if for any unavoidable reason any member is

unable to be present, meetings may still be held if at least

three members including the Chairman are present.

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However, if for any reason, the Chairman is unable to join,

he may designate the senior most Members to chair the

meeting.

v. Such officers of the Commission shall be present at the

meetings of the Commission as permitted by the Chairman.

vi. Background notes for the informal meetings will be sent in

advance wherever possible. No verbatim record shall be

kept of the proceedings of the informal meetings of the

Commission. But, if any decisions are taken at such a

meeting, a record of the decisions shall be duly prepared by

the Member Secretary and after approval by the Chairman,

circulated to the Members of the Commission.

vii. No verbatim record of the proceedings of the formal

meetings of the Commission shall ordinarily be kept, but the

Commission may direct that such a record be kept of the

proceedings of any particular meeting or meetings. When no

verbatim record is kept, minutes of the proceedings of the

meeting shall be prepared as soon as possible by Member

Secretary under the direction of the Chairman and circulated

to the Members of the Commission including any Member

who may have been absent from such a meeting.

viii. Minutes of the meetings with representatives of State

Government, Rural and Urban Local Bodies, etc., shall be

prepared as soon as possible by Member Secretary under

the direction of Chairman.

ix. It shall be the endeavour of the Commission to evolve

consensus. However, in exceptional cases, a Member may,

if he disagrees in respect of any decision, give a dissent note

if he so desires. In such cases, the majority opinion will

prevail.

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x. No information relating to the meetings or the work of the

Commission shall be furnished to the press by any Member

except under the direction of Chairman.

xi. Press conferences will be held by the Commission as a

whole. In exceptional / emergent cases, the Chairman may

hold such conference.

xii. The Member Secretary, under the direction of Chairman,

shall keep the Commission informed from time to time, of

all-important matters involving the Commission.

xiii. The Commission will hold its meeting at least once in two

months to review the progress of work. If any proposal is so

urgent that it cannot wait till the Commission’s meeting, it

can be approved by the Chairman, followed by an

ex-facto approval of the Commission.

xiv. The Commission shall call for any record, relevant

information and views pertaining to Terms of Reference from

the various Secretariat departments of the State

Government, Heads of Department, line agencies, local

bodies, elected representatives and reputed Non-

Governmental Organisations as per the provisions in clause

(a) of sub-section 7 of section 198 of the Tamil Nadu

Panchcyats Act 1994.

xv. The Commission shall also have the power to summon any

person to give evidence or produce records before the

Commission as per clause (b) of sub-section 7 of section

198 of the Tamil Nadu Panchcyats Act 1994.

xvi. All communications/orders and decisions of the Commission

other than the final report will be signed by the

Chairman/Member Secretary or by any officer authorized by

the Chairman/Member Secretary. Any communication or

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interim report containing the views of the Commission shall

be signed only after the views of all the members including

the approval by Chairman are obtained. In emergent cases,

the Chairman and Member Secretary may take a view and

express their opinion.

xvii. The Commission represented by the Chairman and/or

Member Secretary will conduct/participate in various State

level as well as National level meetings, workshops,

seminars, conferences, etc.

xviii. The Commission may engage suitable expert organizations /

financial institutions, preference being given to those under

the control of the Government, to study the various financial

and functional aspects of local bodies and to give their

reports to the Commission, within stipulated periods.

xix. The Commission will visit within the State to discuss and

review the financial position of the Rural and Urban Local

Bodies with the concerned executive authorities / selected

representatives so as to make recommendations on the

financial devolution and possible new avenues for tapping

resources.

xx. The Commission may also visit other States in the Country

to study local body tax structure prevailing in those States so

as to suggest possible new avenues for tapping resources in

local bodies in our State.

ii. For the Commission’s Secretariat

i. The Secretariat of the Tamil Nadu Fifth State Finance

Commission is headed by the Chairman, working under the

immediate control of Member Secretary and assisted by the

Joint Secretary, other officers and five sections.

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ii. The Member Secretary of the Commission, under the general

direction of the Chairman, shall be in overall charge of the

Office of the Commission and shall be responsible to the

Commission for its proper functioning.

iii. All the rules and procedures prescribed by the State

Government will be generally followed, with suitable

modifications and variations whenever and wherever

necessary, in transacting the business and administration of

the Commission’s Secretariat.

iv. All appointments to the posts carrying time scale of pay of

Rs.15600-39100+Grade Pay Rs.7600/- and above i.e. posts

right from the level of Deputy Secretary or equivalent

including Executive Consultants of the Commission shall be

made by the Chairman or on his behalf by Member

Secretary including those made by transfer from other

Government Departments, except those where the approval

of the Government is required.

v. Appointment of staff other than those referred to above

including staff obtained on transfer from other Government

Departments shall be made by the Member Secretary or by

an officer not below the rank of Joint Secretary duly

authorized by Member Secretary or in his/her absence by

the Chairman.

vi. The Chairman will grant leave, whether regular or casual, to

Member Secretary of the Commission. As regards the other

officers and staff, the leave may be sanctioned by Member

Secretary. In the absence of Member Secretary, Joint

Secretary may sanction leave. On emergent occasions, the

staff shall obtain prior permission of the Member Secretary

before proceeding on leave. In the case of personal staff of

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the Chairman, the Member Secretary will be duly consulted

before granting any leave.

vii. The budget and the revised estimates of the Commission will

be prepared by Member Secretary under the directions of

the Chairman and sent to Finance Department for making

necessary provisions in the Budget of the State.

viii. No information relating to the meetings / works of the

Commission shall be furnished to the press or any outside

persons by any staff except under the direction of Chairman.

S. KRISHNAN

CHAIRMAN

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Annexure - II (2)

Details of District sitting held by

the Fifth State Finance Commission

Sitting Place of Sitting Date Districts covered No. of Districts

I Vellore 27.10.2015

Thiruvallur, Kancheepuram, Thiruvannamalai and Vellore

04

II Coimbatore 01.03.2016

Erode, Nilgiris, Tiruppur and Coimbatore

04

III Madurai 28.06.2016

Virudhunagar, Theni, Dindigul, Sivagangai, Kanyakumari, Tuticorin, Thirunelveli and Madurai

09

IV Salem 05.07.2016

Namakkal, Karur, Dharmapuri, Krishnagiri and Salem

05

V Thiruchirapalli 12.07.2016

Perambalur, Ariyalur, Pudukottai, Thanjavur, Thiruvarur, Nagapattinam, Caddulore Villupuram and Tiruchirappalli

09

Total No. of Districts

31

307


Annexure - II (3)

National Level Consultative Workshop on Issues before the Tamil

Nadu Fifth State Finance Commission

28 August 2015, Chennai

A National Level Consultative Workshop on Issues before the Tamil Nadu

Fifth State Finance Commission was held on 28 August 2015 at Chennai.

The Workshop began with a Special Address by Shri B. Senguttuvan,

Member of Parliament and Non-Official Member of the Fifth SFC. He stressed the

need to evolve new strategies and concepts of raising revenues of local

governments. One aspect that needs to be explored is how local bodies can partner

with corporate and explore possibilities of utilizing the funds earmarked by the

corporate under Corporate Social Responsibility for social welfare schemes and

thereby improve the lives of people.

The special Address was followed by an Inaugural Address by

Shri S. Krishnan, Chairperson of the Fifth SFC. He welcomes the participants and

said that the idea of the workshop is to get inputs from the experts as to how the 5 th

SFC should address issues in its ToR following the recommendations of the 14th FC.

Presentation by NIPFP “Tenets of State Finance Commission

Recommendations”

The Inaugural session was followed by presentation by the NIPFP Team

(Dr. Pinaki Chakraborty and Dr. Manish Gupta) of the theme paper of the Workshop

“Tenets of State Finance Commission Recommendations.” The Session was chaired

by Dr. M. Govinda Rao

The paper reviews the reports of the latest SFCs of 16 major states in India.

This involves exploring the working of SFCs by examining the timeliness and

regularity in constitution of SFCs by the State governments, time taken in submission

of reports, acceptance of recommendations of the SFCs by the state governments

and timely tabling of action taken reports in the legislature. The study also examines

the approach adopted by the SFCs in carrying out their task and the principles

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adopted by each of them in allocating resources to the local governments both

vertically and horizontally. It highlights the problems faced by the SFCs in executing

their mandate and provides policy recommendations for improving the functioning of

the SFCs. The paper also does a comparative analysis of the recommendation of

SFCs of Tamil Nadu starting from 1st SFC till the 4th SFC. (For details please refer to

the Final Version of the paper which is attached)

In the Question and Answer session which followed the presentation the

participants expressed that failure to appoint SFCs in a timely manner, not accepting

their recommendations by states have become a norm. It was also pointed out that

Central Finance Commissions should a positive role in promoting decentralization by

way of incentivizing states just the way 13 FC did through its performance grants.

It was also pointed out that since the taxes, fees and other levies are different

in different states the divisible pool will also be different. In response to this the

NIPFP team pointed out that they are not arguing that the divisible pool should be

similar. The constitution says that states should devolve taxes as well as your non-

tax revenue. But we see that some states’ divisible pool is defined as a percentage

of tax revenue, in other it is taken as percentage of own revenue and in yet another

set of states it is certain percentage of central revenue and the state taxes. So, one

is completely ignoring the basics from which you should start when you are

increasing the divisible pool and then modifying it according to the local conditions.

So, there is no clarity in this case and this was the limited point which was NIPFP

had emphasised upon.

The other issue which was discussed relates to quality of data. It has pointed

out that the questionnaire based approach for collecting data on local bodies is

problematic as it does not yield quality information. Then what should be the

alternative approach which SFCs can adopt. How does one address this issue of the

quality of data of local bodies?

Another point which was highlighted is that whether SFCs analyse the impact

of the recommendations of the previous SFCs in their report. This would be

important as we have seen that States are not doing anything regarding SFC

recommendations. What measures can be adopted to ensure the successful

implementation of these recommendations.

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It was also pointed out that one should also look at the credentials of the chair

persons and the members which was no included in the NIPFP presentation.

Session on Urban Local Finances

This session was chaired by Dr. Tapas Sen. Presentations were made by

O.P. Mathur and Dr. Abhay Pethe on the Issues, Approaches and Challenges to

Urban Local Government Finance. Dr. D. Ravindra Prasad spoke on Issue and

Challenges in Service Delivery by Urban Local Bodies.

Dr. Tapas Sen suggested that one should look at not just the traditional

sources of funding including transfer to urban local bodies, but also explore non-

conventional sources of urban local finances. In the literature one finds suggestions

regarding new sources of urban local finances that ULBs can explore.

The other issue is that the urban sector is most probably one of the most dynamic

sectors in our country at the moment, there is a lot of urbanization going on for quite

of sometimes and urban areas are constantly evolving increasing in size and so on.

How are urban boundaries are defined is important as it would have direct bearing

on urban local finances. So one has to look into the dynamics of the urban sector

and focus on emerging needs of the urban local sector and how should SFC deal

with these issues. Prof. M.A. Oommen was the main discussant for this session.

Prof. O.P. Mathur in his presentation highlighted the following

Issues

How to increase the revenue of municipalities so that at the macro level

it will lead to some kind of change in the state local fiscal relation over

time.

The core question for FSFC is how it can increase the share of

municipalities and suggest measures to strengthen the local bodies.

Municipality should impose a vacant land tax, but defining of vacancy

of land may be a difficult task for municipal governments. So, we need

to impose the approved FAR rather than current taxes.

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Approaches

Most of the SFCs have proposed the financial requirements and

projected the required amount for next five years on the basis of either

past trends or assumptions of increases in expenditure of States. SFCs

can also project own revenue for next five years on the basis of

financial structure and architecture. So, projection of revenues should

also be considered at least (x+1) percent for next five year by FSFC.

Need to work on the normative gaps. FSFC should consider the report

of HPC (High Powered Expert Committee) headed by Issar Ahluwalia.

Challenges

Some urbanization perspective needs to be added.

In one hand the census towns are coming and in another hand 53

mega cities are coming, its raise the fundamental issues whether the

state finance commission would consider those census towns as urban

or would these be treated as rural or panchayats. The SFC has to

decide this.

The next challenges of SFC should have getting the rating of

municipalities. If the investment credit rating of the municipality

particularly A class one municipality today is B plus and you want to

make it to investment credit rating of A or A minus, then what kind of

change would be needed in the structure of the finances of the

municipality so that its ratings become A or A minus.

Prof. Abhay M. Pethe

Basic provision in goods and services of local goods.

Attractive cities are required to invest more; So FSFC should follow a

two track multidimensional approach for growth acceleration and also

follow the Kelkar Committee report for regional imbalances.

There should be three way classifications of ULBs.

White paper of the status of ULB finances is required but not in

the way that more state finances do that in their chapters. We

need to create a framework which shows the dependency of the

ULBs and dynamics aspect of the ULBs.

311


Need to work on capacity building. Specially need to work on

PPP.

Formula devolution should be based on PEACE. (Please see his

presentation for the details)

Policy reforms in the areas of rent control, slum issues, BCRs, DCRs,

planning process etc. would be uncommon and unconventional

sources of raising revenues/income should be explored.

Categorization of LBFT (Land Base Fiscal Tools) may be dangerous.

So, Tamil Nadu FSFC has to avoid this.

Dr. Ravindra Prasad

Tamil Nadu FSFC has to work out on sanitation problem.

Per capita investment should be increases.

Comments by Prof. M A Oommen

Getting reliable data is the most important problem which needs to be

addressed if the Commission has to do a good work.

FSFC should create the institution of self-government and for this

purpose SFC body has to subscribe the Articles 242(w) and 242(G).

The PEACE method suggested by Dr. Pethe can be a good method for

devolving resources.

During the question answer session interesting questions were raised like

When IT corridor was announced, the value of land was started to go up. Is

levying tax on vacant land a good option? To this it was pointed out that if the land

values are revised regularly, it helps the state govt. in terms of collection of the

stamp duty for property transaction and it also helps the local government because

they can assess the property tax. So both the levels of government would gain when

the land values are properly assessed.

In case of property tax it was opined that the FSFC should follow the model of

Banglore City which was formed in 2002 and revised in 2008. Classify the City into 5

to 6 zones and we can use the national douse index for housing prices and can get

the buoyancy from these housing prices. Another method is to increase the revenue

of metropolitan city to hike the parking charge. The development authority should

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auction the parking places with hiking in the base price, but illegal parking should be

controlled.

The other issues raised were: Many states are not raising the property tax

since last 10 to 20 year, because this is the universal phenomena. Is it possible to or

is there any model in any state which is having a regular periodicity to revise the

periodicity tax? Since, every state including Tamil Nadu is not willing to raise their

revenue resources because of they depend on the transfer of fund and they also

manage the administration and other services from this fund. So, there is a lack of

vision to improve their major infrastructure. How can we get over from this problem?

What are the sorts of incentives to transfers of funds and how can you empower the

strategy for this issue?

Answer: Land base fiscal tools can be built in a number of ways; it could be a one-

time charge, or it could be a form of property tax which is collected over time. In

terms of efficiency and impact of development one has to compare that which is the

most effective method, because sometimes if you have high initial entry charges in

terms of development charges it may prohibit development and thereby reduces

scope for raising the taxes. Property tax is not easy to collect due to different

methodologies being followed in different places. So, it may be an interesting area

for FSFC Panel to explore the effective method for this issue.

Session on Rural Local Finances

This session was chaired by Dr. Abhay Pethe. Presentations were made by

Dr. K Siva Subrahmanyam and Dr. N. Sreedevi on the Issues, Approaches and

Challenges to Rural Local Government Finance while Dr. Anand Sahasranaman

spoke on Issue and Challenges in Service Delivery by Rural Local Bodies.

Dr. M Govinda Rao was the principal discussant for the session.

K Siva Subrahmanyam

In case of article 280 which deals with the national finance commission,

the principle of devolution lead by the two grant-in-aid, not by the

distribution of central and state revenues.

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Constitution of state finance commission should be mandatory at the

expiration of every fifth year. It cannot be set up earlier than fifth year,

but the governor of state can still appoint the state finance commission

before the expiry of every fifth year.

The size of the members of the SFC can be varying from 1 to 5.

There is a basic problem with many SFCs regarding ATR. A new SFC

is created before the approval of recommendations of earlier ATR by

government. That should not happen

Some suggestions to Tamil Nadu FSFC

They should not deal with functional devolution because the 14th

finance commission is suggesting that they are not entering in

the area of state legislature. So, functional devolution is not

dealt by them.

Using the normative basis, it is still possible to make an

approximate of financial requirements and we can also calculate

a deprivation index for civic amenities on the basis of 2011

census data. So, we can use this index as an indicator.

The vehicle tax should be removed from the obligatory tax and

put the other tax which may be a user charges tax because

vehicle tax is not covering the motor vehicle tax.

There are many gram panchayats in Tamil Nadu and there is

only secretary to deal the problems of gram panchayats. So,

FSFC should appoint more technical assistant to assist the

secretary.

The revision of the house taxes should be reviewed by outsiders

(i.e., by those who are not connected to Panchayati Raj

System), not from the same agency.

N Sreedevi

There is a need to study, if an increase in the stamp duty and

registration fee results in people adopting alternative methods while

selling their properties in order to avoid higher charges. What policies

can we adopt to address this problem.

314


Anand Sahasranaman

The Tamil Nadu Panchayat Act makes a provision to gram Panchayats

to borrow. Since, it is a legal provision under the gram panchayat act,

but it is not happening in Tamil Nadu or any other states. There is a

need to explore this option of raising resources.

There is a problem with mechanism to collect house taxes and water

charges at the ground level of villages and gram panchayats in TN.

Poor Sanitation, no water and security of women are the major

problems with villages. Many villages are divided on the caste basis,

the infrastructure of the Dalit’s villages are much worse off rather than

the other villages. So, we need to focus and try to some make changes

in infrastructure in those villages.

Own revenue collections by village panchayats is very low. Our main

target should explore options so as to raise revenues. Thus we have to

think that how it might be feasible in the rural context and how much

would be affordable for different income categories.

Comment by Prof. Govinda Rao

We have insufficient information. So, it is very important to start getting

the fresh information in that place.

You need to have basic clarity in the assignment system and revenue

sources.

There is no certainty that borrowing can be a good option at the level of

RLBs.

Question &Answer Session:

It was discussed that as the rural local bodies were not able to provide

adequate services to the people as a result people were not willing to pay any taxes.

The other reason why local governments do not collect taxes relates to proximity

with people. Suggestions were sought on how rural local governments can raise

more revenues.

315


As there is no database on what local governments collect and how much is

collected, it was suggested that surveying some good villages would help get an idea

of how much revenues they collect. Ideally one should have data relating to

revenues and expenditures of all villages in the state.

Closing Session

The workshop ended with the closing remarks by the Chairman of TN 5 th SFC,

Shri. S. Krishnan.

He pointed out that the local bodies especially the ULBs are operating

at sub-optimal level and are not able to tap the full potential for revenue

generation. We have to focus on how the local bodies can be

encouraged to achieve full capacity in mobilizing their own resources.

New and efficient tax collection system has to be introduced in both

rural and urban areas. Many properties are not listed in the properties

tax list and for those properties that are listed property tax collection is

inefficient. There is no proper system to review the property tax

system. This is an area which needs attention. New and innovative

sources of taxes have to be explored by local bodies in the state for

raising revenue like advertisement tax.

316


Annexure – II (4)

Property Tax Reforms adopted by Bangalore Municipal Corporation

Thiru.U.A. Vasanth Rao, a Property Tax expert was invited to made a

presentation on property tax reforms adopted by the Bangalore Municipal

Corporation. He made a presentation before the Commission on 29.07.2016. The

salient features of the property tax reforms adopted by the Bangalore Municipal

Corporation are as follows:

In 2004, the Karnataka Government conducted a comprehensive survey of all

taxable properties in the 57 largest ULBs in the State including Corporation of

Bangalore. Using GIS technology, digital maps were created to identify each

and every property within the ULBs jurisdiction. Once identified, a new

unique property id was assigned to each property.

Teams of Inspectors systematically surveyed each and every property,

identified through the mapping process, gathering detailed information on the

size of the properties and the building constructed on the properties. Finally,

data from the field survey was combined with existing data on prior collections

for the properties.

Field survey was a long and intense process, taking almost three years in

some ULBs. Digitized ward maps with individual properties have been

prepared and each property is assigned with unique Property ID (PID) number

which resulted in to an accurate database of the properties.

In the next process a letter was sent to all property owners whose land was

surveyed requesting to confirm the details gathered during the survey. Then,

property owners who had failed to pay tax on a property previously were

made aware that their property was now tracked in the database

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A Self Assessment System (SAS) of taxation has been created with

Automated online tax calculator, wherein the mandatory details can be

entered by the assesse and Annual Rental Value (ARV) method is replaced

by Capital Value System (CVS) method to avoid corruption and

misappropriation

This system has made the authorities to generate various report of property

tax at any point of time

Built up area is calculated on the total area covered by building, basement,

mezzanine flooring, balcony, garage area, swimming pool, fuel storage tanks,

open storage, space meant for parking, telecommunication towers, hoardings

erected etc.

Excess vacant land is calculated on the area of vacant land of a building in

excess of three times of the plinth area of the building by excluding the plinth

area

Submission of self assessment return Forms – Owner or occupier has to

file the self assessment return forms with the area of the property, zone in

which it come, year of construction, details of occupancy whether tenanted or

self occupied, parking details etc by which tax calculation is made

automatically without any manual errors

Properties are divided under four categories (I to IV) for RCC / RCC – entire

house is either cement or red oxide flooring / Tiled or sheets / hutments,

house built for poor

Taxable annual value of a property shall be determined by the assesse by

multiplying the rate of the unit area value with built up area of such building

318


and excess vacant land for ten months and deduct depreciation at the rate

specified ranging from 3% to 70% based on the age of the building

Property tax, penalty or interest payable on the property can be made through

electronic mode or any other modes except cash payment (cash payment is

allowed up to Rs.1000 only)

Returns once submitted can be revised at any later stage

Levy of Service Charges for the buildings exempted from property tax:

Service Charges for providing civic amenities in respect of buildings exempted

from property tax excluding places of worship shall be charged at the rate of

25% of the property tax exempted plus cess as applicable to such land or

building or both

Property Register: Property tax collected from owner or occupier in respect

of property assesses to tax are maintained in Property Tax register in Form A

and in respect of unassessed properties in Form B

Method of Random scrutiny: Every return filed by a owner is given a

continuous serial no. in a chronological order by the computer and thereafter it

shall be taken up for random scrutiny not exceeding 10% on the basis of

random computer generated numbers under supervision of an officer

authorized

Details of inspection are recorded in checklist in Form VIII. After detailed

inspection, if discrepancy is noticed resulting in short payment of tax, a notice

is issued to the tax payer giving him an opportunity to file his objections. On

receipt of objections, if any, after due consideration, the inspecting officer

shall pass order as he deemed fit.

Some of the above features are revised subsequently in 2016 as follows:

319


Tax levied on tenanted property one time more than the self occupied

Unit Area Value (UAV) method is followed for the property. Unit of calculation

is based on per square foot per month (Unit) and for a particular location,

street (Area) and multiplied by a rate (Value) is the same method used in SAS

Zones are classified in to sic value zones (A to F) based on the guidance

value of the Department of Stamps and Registration

Properties are divided into two categories like residential and non-residential

Properties are divided under four categories (I to IV) for RCC / RCC – entire

house is either cement or red oxide flooring/Tiles or sheet/hutments, house

built for poor with less than 300 sq.ft and self occupied

Non-residential properties are further divided into several categories for

taxation purpose

Separate Unit area value for excess vacant land and vacant land not built

upon

Service charges is levied on buildings exempted from payment of property tax

Telecommunication towers are levied with tax of Rs.15,000 plus cell

irrespective of the zone

Zone wise taxation for hoardings/bill board ranging from Rs.12,500 –

Rs.30,000

Paying guest accommodations are levied with Unit Rate from Rs.3.00 –

Rs.8.00

Under non-residential property, 25% of the total built-up area is considered as

utility or service area and taxed at 50% of the UAV prescribed for such class

of property.

320


Properties seeking exemption apply to the Commissioner in Form VI along

with the payment of service charges. If the application is rejected, non-

residential rates will apply

For stilt parking area or multilevel cark park, tax is computed at 50% of UAV

of the respective zone

For the open area used for storage of merchandise, UAV is computed at 50%

of the rate applicable

In respect of non-residential buildings the owner or occupier or association etc

who administer the common facilities shall file a return and pay property tax

for such are (facility area) excluding security cabin, pump house and electrical

room at the rates prescribed for owner occupied status

For vehicle parking or licensing hoarding and telecommunication towers within

the premises, the owner or occupier shall including such lump sum taxes as

applicable and file the return

For the purpose of taxation on hoarding/bill board, classification of zone is

adopted into four categories (A to D)

Theatres are grouped under five categories (A to E)

In order to ensure that the tax payer is not affected by more than one step, the

jump in zonal classification has been limited to the next higher zone only

321


Annexure -III (1)

Recommendations of Fourth State Finance Commission

Status of acceptance

Sl.No. Chapter

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epte

d w

ith

m

od

ific

atio

n

No

t ac

cep

ted

/ sta

tus-

qu

o c

on

tin

ue

To

be

exam

ined

se

par

atel

y

TO

TA

L

1.

Chapter-III

Status of implementation of Third SFC recommendations

2 2 - - - 4

2.

Chapter-IV

Assessment of Finances of Panchayat Raj institutions

29 1 1 1 1 33

3.

Chapter-V

Assessment of Finances of Urban Local Bodies

27 - 3 2 1 33

4. Chapter-VI

Solid Waste Management 1 - 1 - - 2

5.

Chapter-VII

Accountability and Audit of Local Bodies

12 - - - - 12

6.

Chapter-VIII

Equation between line departments /Agencies and Local Bodies

15 - 3 4 3 25

7.

Chapter – X

Assessment of Gap in Financial Resources

- - - - 1 1

8. Chapter-XI

Scheme of Devolution 14 - 4 - 1 19

9. Chapter – XII

Recording of best practices 1 - - - - 1

Total 101 3 12 7 7 130

322


Annexure-III (2)

Status of Accepted Recommendations of the Fourth SFC

Sl.No. Chapter

To

tal n

um

ber

of

reco

mm

end

atio

ns

Implemented/Orders issued

Acc

epte

d

Acc

epte

d in

p

rin

cip

le

Acc

epte

d w

ith

m

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TO

TA

L

Recommendations other than devolution of finances

1. Chapter-III

Status of implementation of Third SFC recommendations

4 - - - 0

2. Chapter-IV

Assessment of Finances of Panchayat Raj institutions

33 16 1 1 18

3. Chapter-V

Assessment of Finances of Urban Local Bodies

33 15 - 1 16

4. Chapter-VI

Solid Waste Management 2 - - 1 1

5. Chapter-VII

Accountability and Audit of Local Bodies 12 7 - - 7

6. Chapter-VIII

Equation between line departments /Agencies and Local Bodies

25 14 - 2 16

7. Chapter – X

Assessment of Gap in Financial Resources

1 - - - 0

8. Chapter-XII

Recording of best practices 1 1 - - 1

9. Chapter – XI

Scheme of Devolution 19 11 - 3 14

Total 130 64 1 8 73

323


Annexure - III (3)

Pending accepted recommendations of the Fourth SFC require further action

Sl. No.

Sl.No. (Report)

Ch. No.

Para No. Gist of the recommendations Decision taken by the

State Government

1. 10 IV 29(iv)

The recommendation of Third SFC to revise the unit measurement in square decimeters into square metre under Schedule-I of the Act is reiterated.

Accepted.

2. 12 IV 29 (vi)

House Tax: The Government in RD&PR Department shall take up the issue with Ministry of Rural Development of Government of India for levying service charges on Central Government properties.

Accepted.

3. 14 IV 33(i)

Profession Tax: Government of India be addressed by the Government in RD&PR Department to increase the maximum ceiling or to prescribe a minimum ceiling on Profession Tax and to let the local bodies to decide on the maximum ceiling depending on the capabilities of local bodies.

Accepted.

4. 15 IV 33(ii)

In respect of self-employed professionals, private employers and private employees, experience and service oriented taxation as adopted by other States like Karnataka be adopted.

Accepted.

5. 19 IV 39(i)

Non-Tax Revenue: The ceiling on the rate of water charges fixed by the Government earlier be modified and that Rs.50/- be fixed as the minimum for domestic connections. The user charges be revised with effect from 1st October, 2012 and periodically once in 5 years. The deposit amount to be collected while giving water connection be increased from Rs.1000/- to Rs.2000/- for new house hold connections and Rs.3000/- for commercial / industrial connections.

Accepted.

6. 20 IV 39(ii)

In respect of business, commercial, institutional and industrial establishments, the water charges be levied with reference to the quantum of supply made by prescribing rate per kilo litre and by installing quality water meters.

Accepted.

7. 21 IV 42(i)

D & O Trade License Fees: License fees for all trades be revised with the rates prescribed by First SFC as the basis for revision.

Accepted.

324


Sl. No.

Sl.No. (Report)

Ch. No.


State Government

8. 22 IV 42 (ii) The nomenclature viz. D&O trade License Fees be revised as Trade License Fees as in the case of Chennai Corporation.

Accepted.

9. 23 IV 42 (iii)

Necessary rules incorporating the rates, periodicity of revision, etc. be framed in this regard. The fees be revised once in 5 years starting from 1st April, 2013.

Accepted.

10. 24 IV 42 (iv)

License Fees be levied on mobile service providers by the local bodies as in the case of Municipal Corporation of Delhi by making suitable provisions in the concerned Act.

Accepted.

11. 25 IV 44 The Bus Stand Fees be revised during the year 2012-13 by 25%.

Accepted. The Bus Stand Fees shall be revised by 25% and towards this Rural Development Department to initiate the file and Home Department to issue the orders.

12. 27 IV 52(i)

Assigned / Pooled Assigned Revenue: The Recommendation of Third SFC to levy Surcharge on i) Agreement ii) Power of Attorney, iii) Release of Benami right, iv) Resale of right in favour of partner and v) Statement is reiterated.

Accepted as the recommendation is legally permissible, RD&PR and MAWS shall initiate the steps for amendment of the respective acts through commercial taxes and registration department.

13. 37 IV 85 (iii)

Central Finance Commission grant: The Peri Urban Panchayats be empowered to levy Vacant Land Tax (VLT) for house sites other than agricultural lands based on plinth area as in ULBs by amending the Tamil Nadu Panchayats Act, 1994.

Accepted.

14. 39 V 22(ii)

Own Tax Revenue - Property Tax: In case Chennai Corporation decides not to revise Property Tax, Chennai Corporation shall compensate CMWSSB on the income foregone by CMWSSB.

Accepted.

15. 40 V 22(iii)

The self-assessment system be enforced compulsorily with field inspection of self assessed properties by the assessing authorities and in case of default in filing returns, a fine of 100% of Property Tax be imposed on such assesses.

Accepted with a modification of imposing 50% fine on assesses in case of default in filing returns.

16. 41 V 22 (iv)

The provision in the Tamil Nadu District Municipalities Act, 1920 towards the postponement of general revision by the State Government for a period of one or more half years at a time but not

It has been decided to amend the Act periodically in consultation with Law Department.

325


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Ch. No.


State Government

exceeding in any case seven half years be suitably amended so as to avoid hindrance to the quinquennial revision by ULBs.

17. 42 V 22 (v)

The ceiling on the fixation of Property Tax fixed for general revision in respect of all categories of buildings provided in the guidelines issued by the Government be removed.

Accepted.

18. 43 V 22 (vi)

The prompt payment of Property Tax within 15 days after the commencement of the half year in respect of Chennai Corporation and 30 days in respect of other Corporations and Municipalities be incentivized at 5% of the net Property Tax subject to a maximum of Rs.5,000/- per half year per assessment and the defaulters be penalized at 2% interest per month on any amount of tax unpaid within the half year.

Accepted.

19. 46 V 22 (ix)

The issues in the collection of service charges from Central Government properties be taken up with Government of India in MOUD for issue of suitable instructions or to bring in Central legislation as mentioned by the XI and XIII Central Finance Commissions.

Accepted.

20. 47 V 22 (x)

Al l t he sel f - f inancing educat i onal i nst i tut i ons other than those cov ered under chari table purpose be brought under Property Tax net by sui tably amending the Act .

Accepted.

21. 48 V 22 (xi)

ULBs be facilitated to levy Property Tax as applicable to commercial buildings, for the buildings on which or the premises in which the cell phone towers are erected.

Agreed to levy License Fee (D&O) instead of Property Tax.

22. 50 V 28 (ii)

During the next revision due on 01.10.2013, the rate of revision as decided by the Council between 25% and 35% be adopted and the maximum amount of Profession Tax be restricted to Rs.1250/- per half year.

Accepted.

23. 51 V 28 (iii)

Profession Tax: The Government of India may be addressed by MA&WS Department to increase the maximum ceiling or to prescribe a minimum ceiling on Profession Tax and to let the local bodies to decide on the maximum ceiling depending on their capabilities.

Accepted.

326


Sl. No.

Sl.No. (Report)

Ch. No.


State Government

24. 57 V 41(i) The rates of trades be fixed taking the First SFC rates as the basis.

Accepted.

25. 58 V 41(ii) The nomenclature ‘D & O Trade License Fees’ be revised as ‘Trade License Fee’ as in the case of Chennai Corporation.

Accepted.

26. 59 V 41(iii)

Rule provisions in Schedule-V in Tamil Nadu District Municipalities Act, 1920 and the relevant schedules in respect of other Municipal Corporation Acts be amended to notify the list of trades by the Council and to revise the rates once in 3 years.

Accepted . The l ist of t rades shal l cont inue to be modif ied by the Gov ernment and a comprehensiv e l ist shal l be prepared by the Gov ernment and not i f ied.

27. 61 V 46

Track Rent on OFC Feeders: The issue of non-payment of track rent by BSNL be taken up with BSNL and Government of India by RD&PR/ MA&WS Departments.

Accepted.

28. 72 VI 16(ii)

Management of the Fund may follow a public private partnership model like TNUDF to ensure professional management and effective operation.

Accepted.

29. 73 VII 27(i)

The Tamil Nadu Panchayats (Issue and Disposal of Audit Report of Village Panchayats) Rules, 2000 be amended to include Local Fund Department Auditor also as an auditor to test audit the accounts of Village Panchayats.

Accepted.

30. 74 VII 27 (ii)

Deputy BDO (Audit) be directed to audit the revenue side also relating to the enumeration of properties, review of under/ unassessment, periodical revision of taxes/non-taxes and untapped tax/non-tax revenue potential. The format for audit by the Deputy BDO (Audit) be revised accordingly.

Accepted.

31. 75 VII 27 (iii)

Internal audit be introduced in ULBs with professional Chartered Accountants/Works Accountants through outsourcing in a phased manner to facilitate better accountability and to strengthen the audit and accounting system.

Accepted.

32. 78 VII 27 (vi)

A new Municipal Accounting Service with appropriate staff strength based on the turnover be created for ULBs. The method of recruitment be decided by the Government in consultation with the HoDs concerned. Till such time, Chartered

Accepted.

327


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Ch. No.


State Government

Accountants be appointed by ULBs on contract basis to finalize the accounts early, as in vogue in Coimbatore Municipal Corporation and also in Karnataka.

33. 84 VII 27(xii)

The Heads of Departments concerned with ULBs to review the existing ABAS and to improve it so as to bring the accounting system in our State consistent with the accounting formats and codification pattern suggested in the National Municipal Accounting Manual.

Accepted.

34. 87 VIII 18

Water Cess: The Government in MA&WS Department in association with Environment and Forests Department shall approach GOI so as to amend the Water Cess Act, 1977.

Accepted.

35. 92 VIII 44(i)

The rate of bulk water charges for CWSS be revised from Rs.3/- to Rs.4.50 for RLBs, Rs.4.50 to Rs.7/- for ULBs and from Rs.15/- to Rs.30/- per kilo litre for industries and commercial organizations who have paid proportionate cost of CWSS. This may be periodically revised to cover O&M costs of TWAD Board.

Accepted.

36. 125 XI 27 (xv)

From the vertical share of SFC devolution recommended for rural and urban local bodies, 2.5 percent be allocated as a separate corpus for incentive fund from SFC devolution. From out of the corpus, the incentive be given to the local bodies as detailed below:

Local bodies which record 100% current collection in House/Property Tax and 75% arrear collection with increase in the collection at 15% over the previous year will be qualified to get an incentive as graded below:

100% of demand subject to a maximum of

Accepted Subject to 100 Percent collection + quinquennial revision. It has been decided that 50 percent of the 2.5 percent of incentive fund from SFC devolution be provided for ensuring periodic revision and balance 50 percent for 100 percent of demand (Rs. In

Lakh) 1. Village Panchayats 2.00

2. Town Panchayats 10.00 3. Municipalities 20.00

4. Municipal Corporation 50.00

37. 126 XI 27 (xv)

The following conditionalities also been prescribed for getting the incentive:

Enumeration of properties every year and to be certified by the Deputy BDO (Audit)/ RDMA / AD (TPs) General revision should

Accepted.

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State Government

have been done in the past 5 years.

38. 127 XI 27 (xvi)

The cash award be given to the local bodies at the District and State Level also. At the District level 3 cash awards of R.3.00 lakh R.2.50 lakh and qualify for getting the incentive mentioned in Para 25(i). The awards be given by the District Collectors. Similar awards also be given at the State level for the local bodies as mentioned in Para 25(ii). with cash of Rs.10.00 lakh, Rs.7.50 lakh and Rs.5.00 lakh for the first 3 Village Panchayats respectively.

At the State level, the cash award for ULBs be given for the first 3 Municipal Corporations, Municipalities and Town Panchayats as detailed below:

As fulfilling of conditionalities would improve the standards of the local bodies, to motivate the local bodies, the recommendation for giving cash award has been accepted.

Sl. No. Tier of ULBs

Cash Award I II III

1. Municipal Corporations

100 75 60

2. Municipalities 50 40 30 3. Town

Panchayats 40 30 20

39. 128 XI 27 (xvii)

Balance in the incentive fund be transferred to IGFF Accepted.

329

Fift

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A

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330

Fift

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A

nnex

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331

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tate

Fin

ance

Com

mis

sion

A

nnex

ures

332

Fift

h S

tate

Fin

ance

Com

mis

sion

A

nnex

ures

333

Fift

h S

tate

Fin

ance

Com

mis

sion

A

nnex

ures

334

Fift

h S

tate

Fin

ance

Com

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sion

A

nnex

ures

335

Fift

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tate

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ance

Com

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A

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336

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ance

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A

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337

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338

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339

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340

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341

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342


Annexure - V (1)

The aggregate financial position of ULBs and category wise for the past five years

(Rs. In Crore)

Sl.

No. Description

2010-11 2011-12 2012-13 2013-14 2014-15

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

A I. Revenue Receipts

1 Tax 1317 494 17% 1398 524 17% 1667 625 16% 1847 693 15% 1949 731 15%

2 Non-Tax 988 371 13% 1315 493 16% 1657 622 16% 1861 698 15% 1846 693 15%

3 Assigned / Pooled

Assigned Revenue 281 105 4% 407 153 5% 502 188 5% 574 215 5% 487 183 4%

Total own source of

Revenue 2586 970 34% 3120 1171 38% 3826 1435 37% 4282 1606 35% 4282 1606 34%

II. Grants

4 SFC Devolution Funds 1770 664 23% 2043 766 25% 2497 937 24% 2697 1012 22% 2678 1005 21%

5 13th CFC Grants 150 56 2% 181 68 2% 234 88 2% 277 104 2% 300 113 2%

Total Grants 1920 720 25% 2224 834 27% 2731 1025 26% 2974 1116 25% 2978 1117 24%

Total Revenue

Receipts 4506 1691 59% 5344 2005 66% 6557 2460 63% 7256 2722 60% 7260 2724 58%

III. Capital Fund

6 Contributions from

MPLADS Fund 615 231 8% 619 232 8% 946 355 9% 1304 489 9% 1342 503 9%

7 Grants from State Govt 1242 466 17% 1030 386 13% 1380 518 13% 1683 631 12% 1712 642 11%

8 Grants from Central

Govt 428 161 6% 283 106 4% 409 153 4% 428 161 3% 363 136 2%

9 Loans 335 126 5% 261 98 3% 433 162 4% 705 264 5% 1106 415 7%

10 Advances 173 65 2% 150 56 2% 202 76 2% 202 76 1% 379 142 2%

11 Deposits 347 130 5% 469 176 6% 413 155 4% 485 182 4% 458 172 3%

Total Capital Fund 3140 1178 43% 2812 1055 36% 3783 1419 35% 4807 1803 35% 5360 2011 35%

Total Receipts

(1 to 11) 7646 2869 105% 8156 3060 104% 10340 3879 96% 12063 4526 88% 12620 4735 83%

B I. Revenue

Expenditure

1 Salary & terminal

benefits 1740 653 24% 1972 740 25% 2096 786 19% 2364 887 17% 2583 969 17%

2 Others 2075 778 29% 2153 808 27% 3222 1209 30% 4508 1691 33% 5041 1891 33%

Total (1+2) 3815 1431 53% 4125 1548 52% 5318 1995 49% 6872 2578 50% 7624 2860 50%

3 II. Capital

Expenditure 3442 1291 47% 3739 1403 48% 5436 2039 51% 6856 2572 50% 7606 2854 50%

Total Expenditure

(A+B) 7257 2723 100% 7864 2950 100% 10754 4035 100% 13728 5150 100% 15230 5714 100%

GSDP (at current

prices) on Total

Revenue Receipts

0.59

0.36

0.41

0.40

0.35

Annexure - V (2)

343


The aggregate financial position and per capita of Greater Chennai Corporation

(Rs. In Crore)

Sl.

No. Description

2010-11 2011-12 2012-13 2013-14 2014-15

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e


1 Tax 576 895 33% 576 895 34% 735 1143 28% 818 1272 25% 868 1349 22%

2 Non-Tax 130 202 8% 243 378 14% 420 653 16% 518 805 16% 482 749 12%

3

Assigned / Pooled


Total own source of

Revenue 786 1222 45% 971 1510 58% 1319 2051 50% 1494 2323 45% 1469 2284 38%

II. Grants

4

SFC Devolution

Funds 313 487 18% 369 574 22% 554 861 21% 463 720 14% 447 695 12%

5 13th CFC Grants 33 51 2% 52 81 3% 38 59 1% 69 107 2% 77 120 2%

Total Grants 346 538 20% 421 655 25% 592 920 23% 532 827 16% 524 815 14%

Total Revenue

Receipts 1132 1760 65% 1392 2164 83% 1911 2971 73% 2026 3150 61% 1993 3098 51%

III. Capital Fund

6

Contributions from

MPLADS Fund 256 398 15% 177 275 12% 388 603 15% 654 1017 15% 669 1040 13%

7

Grants from State

Govt 65 101 4% 9 14 1% 148 230 6% 362 563 8% 447 695 9%

8

Grants from Central

Govt 117 182 7% 24 37 2% 46 72 2% 43 67 1% 62 96 1%

9 Loans 48 75 3% 25 39 2% 35 54 1% 85 132 2% 471 732 9%

10 Advances 44 68 3% 15 23 1% 20 31 1% 28 44 1% 130 202 3%

11 Deposits 70 109 4% 41 64 3% 65 101 2% 128 199 3% 101 157 2%


Total Receipts (1 to

11) 1732 2693 100% 1683 2616 110% 2613 4062 98% 3326 5171 77% 3873 6021 75%

B

I. Revenue

Expenditure

1

Salary & terminal

benefits 550 855 32% 638 992 42% 684 1063 26% 759 1180 18% 842 1309 16%

2 Others 722 1122 41% 557 866 36% 1134 1763 43% 2017 3136 47% 2241 3484 43%

Total (1+2) 1272 1978 73% 1195 1858 78% 1818 2826 68% 2776 4316 64% 3083 4793 60%

3

II. Capital

Expenditure 467 726 27% 333 518 22% 842 1309 32% 1549 2408 36% 2093 3254 40%

Total Expenditure

(A+B) 1739 2704 100% 1528 2376 100% 2660 4135 100% 4325 6724 100% 5176 8047 100%

344


Annexure- V (3)

The aggregate financial position and per capita of all Other Corporations

(Rs. In Crore)

Sl.

No. Description

2010-11 2011-12 2012-13 2013-14 2014-15

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

A

I. Revenue

Receipts

1 Tax 320 833 18% 365 951 18% 429 1117 17% 479 1248 16% 492 1281 15%

2 Non-Tax 326 849 18% 488 1271 24% 552 1438 22% 614 1599 20% 610 1589 18%

3

Assigned / Pooled


Total own source

of Revenue 698 1818 40% 926 2412 46% 1083 2821 43% 1245 3243 41% 1233 3211 37%

II. Grants

4

SFC Devolution

Funds 394 1026 22% 471 1227 23% 517 1346 21% 682 1776 22% 666 1735 20%

5 13th CFC Grants 31 81 2% 38 99 2% 67 174 3% 64 167 2% 68 177 2%

Total Grants 425 1107 24% 509 1326 25% 584 1521 23% 746 1943 24% 734 1912 22%

Total Revenue

Receipts 1123 2925 64% 1435 3737 71% 1667 4342 66% 1991 5185 65% 1967 5123 60%

III. Capital Fund

6

Contributions from

MPLADS Fund 86 224 5% 112 292 5% 155 404 5% 143 372 4% 158 412 4%

7

Grants from State

Govt 226 589 13% 188 490 9% 295 768 10% 326 849 9% 407 1060 10%

8

Grants from Central

Govt 112 292 6% 93 242 4% 74 193 3% 99 258 3% 73 190 2%

9 Loans 108 281 6% 73 190 3% 171 445 6% 351 914 10% 483 1258 11%

10 Advances 107 279 6% 111 289 5% 154 401 5% 142 370 4% 215 560 5%

11 Deposits 1 3 0% 1 3 0% 1 3 0% 0 0 0% 0 0 0%


Total Receipts (1 to

11) 1763 4592 98% 2013 5243 96% 2517 6555 88% 3052 7949 87% 3303 8602 79%

B

I. Revenue

Expenditure

1

Salary & terminal

benefits 460 1198 26% 519 1352 25% 550 1432 19% 630 1641 18% 676 1761 16%

2 Others 461 1201 26% 551 1435 26% 769 2003 27% 923 2404 26% 1152 3000 27%

Total (1+2) 921 2399 51% 1070 2787 51% 1319 3435 46% 1553 4045 44% 1828 4761 43%

3

II. Capital

Expenditure 869 1351 29% 1021 1587 29% 1556 2419 32% 1967 3058 33% 2378 3697 34%

Total Expenditure

(A+B) 1790 4662 100% 2091 5446 100% 2875 7488 100% 3520 9168 100% 4206 10954 100%

345


Annexure - V (4)

The aggregate financial position and per capita of Municipalities

(Rs. In Crore)

Sl.

No. Description

2010-11 2011-12 2012-13 2013-14 2014-15

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in

Cro

re)

Per

Cap

ita

(Rs.

)

%S

har

e

A

I. Revenue

Receipts

1 Tax 291 352 13% 313 378 13% 345 417 12% 377 456 13% 404 488 14%

2 Non-Tax 304 367 14% 323 390 13% 391 473 13% 392 474 13% 414 500 14%

3

Assigned / Pooled


Total own source

of Revenue 673 813 30% 729 881 29% 862 1042 29% 918 1110 31% 960 1160 33%

II. Grants

4

SFC Devolution

Funds 569 688 25% 687 830 28% 730 882 25% 720 870 24% 819 990 28%

5 13th CFC Grants 44 53 2% 36 44 1% 65 79 2% 64 77 2% 70 85 2%

Total Grants 613 741 27% 723 874 29% 795 961 27% 784 948 26% 889 1075 30%

Total Revenue

Receipts 1286 1554 57% 1452 1755 58% 1657 2003 56% 1702 2057 57% 1849 2235 63%

III. Capital Fund

6

Contributions from

MPLADS Fund 133 161 7% 184 222 8% 222 268 8% 233 282 8% 232 280 8%

7

Grants from State

Govt 481 581 24% 411 497 18% 553 668 20% 522 631 18% 465 562 16%

8

Grants from Central

Govt 77 93 4% 68 82 3% 184 222 7% 114 138 4% 92 111 3%

9 Loans 90 109 5% 83 100 4% 144 174 5% 186 225 6% 81 98 3%

10 Advances 1 1 0% 1 1 0% 1 1 0% 3 4 0% 4 5 0%

11 Deposits 168 203 8% 296 358 13% 207 250 7% 204 247 7% 200 242 7%


Total Receipts

(1 to 11) 2236 2703 112% 2495 3016 109% 2968 3587 106% 2964 3582 100% 2923 3533 98%

B

I. Revenue

Expenditure

1

Salary & terminal

benefits 510 616 25% 570 689 25% 593 717 21% 665 804 23% 739 893 25%

2 Others 415 502 21% 510 616 22% 637 770 23% 691 835 23% 732 885 24%

Total (1+2) 925 1118 46% 1080 1305 47% 1230 1487 44% 1356 1639 46% 1471 1778 49%

3

II. Capital

Expenditure 1077 1674 69% 1199 1864 68% 1581 2458 72% 1594 2478 69% 1523 2368 65%

Total Expenditure

(A+B) 2002 2420 100% 2279 2755 100% 2811 3398 100% 2950 3566 100% 2994 3619 100%

346


Annexure- V (5)

The aggregate financial position and per capita of Town Panchayats

(Rs. In Crore)

Sl.

No. Description

2010-11 2011-12 2012-13 2013-14 2014-15

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e

Am

ou

nt

(Rs.

in C

rore

)

Per

Cap

ita

(Rs.

)

%S

har

e


1 Tax 130 160 7% 144 178 7% 158 195 7% 173 213 6% 185 228 7%

2 Non-Tax 228 281 12% 261 322 13% 294 363 13% 337 416 12% 340 419 13%

3

Assigned / Pooled


Total own source of

Revenue 429 529 22% 494 609 25% 562 693 25% 625 771 23% 620 765 25%

II. Grants

4 SFC Devolution Funds 494 609 26% 516 636 26% 696 858 31% 832 1026 31% 746 920 30%

5 13th CFC Grants 42 52 2% 55 68 3% 64 79 3% 80 99 3% 85 105 3%

Total Grants 536 661 28% 571 704 29% 760 937 34% 912 1125 34% 831 1025 33%

Total Revenue

Receipts 965 1190 50% 1065 1313 54% 1322 1630 59% 1537 1895 56% 1451 1789 58%

III. Capital Fund

6

Contributions from

MPLADS Fund 140 173 8% 146 180 7% 181 223 8% 274 338 9% 283 349 10%

7 Grants from State Govt 470 580 27% 422 520 21% 384 474 16% 473 583 16% 393 485 14%

8

Grants from Central

Govt 122 150 7% 98 121 5% 105 129 4% 172 212 6% 136 168 5%

9 Loans 89 110 5% 80 99 4% 83 102 3% 83 102 3% 71 88 3%

10 Advances 21 26 1% 23 28 1% 27 33 1% 29 36 1% 30 37 1%

11 Deposits 108 133 6% 131 162 7% 140 173 6% 153 189 5% 157 194 6%


Total Receipts

(1 to 11) 1915 2362 111% 1965 2423 100% 2242 2765 93% 2721 3356 93% 2521 3109 88%

B

I. Revenue

Expenditure

1

Salary & terminal

benefits 220 271 13% 245 302 12% 269 332 11% 310 382 11% 326 402 11%

2 Others 477 588 28% 535 660 27% 682 841 28% 877 1082 30% 916 1130 32%

Total (1+2) 697 860 40% 780 962 40% 951 1173 39% 1187 1464 40% 1242 1532 44%

3 II. Capital Expenditure 1029 1600 75% 1186 1844 76% 1457 2265 76% 1746 2714 75% 1612 2506 71%

Total Expenditure

(A+B) 1726 2129 100% 1966 2424 100% 2408 2970 100% 2933 3617 100% 2854 3520 100%

347

Fifth State Finance Commission Annexure

Annexure - VIII (1)

Composition of Revenue Expenditure of Tamil Nadu 2010-11to 2016-17

(Rs. In Crore)

Sl.

No

. Major Heads

Actuals RE15-16

RBE16-17

2010-11 2011-12 2012-13 2013-14

I A. General Services(1to 27) 25923.4327 28941.191 31652.1208 35729.2406 47319.3365 53286.5546

1 Parliament / State / Union Territory legislatures. 33.23 32.08 35.23 33.61 38.65 42.77

Salary 28.21 28.09 28.87 30.21 35.04 39.22 Non-Salary 5.02 3.99 6.35 3.40 3.61 3.55 2

President / Vice President / Governor / Administrator of Union Territories.

6.67

7.73

7.16

7.80

9.75

10.39

Salary 4.61 5.18 5.31 5.66 7.44 8.32 Non-Salary 2.06 2.54 1.85 2.15 2.32 2.07

3 Council of Ministers 4.31 5.41 7.50 5.42 7.01 5.92 Salary 1.09 1.02 1.48 1.26 2.03 1.60 Non-Salary 3.23 4.39 6.03 4.16 4.98 4.32

4 Administration of Justice 499.12 621.35 594.17 677.17 862.66 914.41 Salary 458.88 570.04 529.37 599.71 784.88 823.25 Non-Salary 40.23 51.31 64.81 77.46 77.78 91.16

5 Elections 70.91 337.95 65.53 92.86 185.84 550.23 Salary 19.25 69.97 20.19 25.19 53.22 137.83 Non-Salary 51.66 267.98 45.34 67.67 132.62 412.40

6 Collection of taxes on income and expenditure 0.05 0.02 0.09 0.10 0.07 0.08

Salary 0.05 0.02 0.09 0.10 0.07 0.08

7 Land Revenue 172.26 181.13 182.09 189.35 252.72 255.80 Salary 166.09 175.34 166.22 181.56 224.52 246.71 Non-Salary 6.17 5.79 15.87 7.79 28.21 9.09

8 Stamps & Registration 171.14 179.40 203.00 220.07 307.06 296.65 Salary 100.13 106.91 114.56 126.16 156.19 176.18 Non-Salary 71.01 72.49 88.44 93.91 150.87 120.47

9 Collection of other taxes on property and capital transactions 5.72 5.62 6.09 6.73 6.82 7.75


10 State Excise 64.07 66.90 76.58 80.21 91.07 100.57 Salary 23.00 24.68 24.71 29.11 33.20 37.55 Non-Salary 41.07 42.22 51.87 51.10 57.87 63.01

11 Taxes on Sales, trade etc., 230.38 215.61 214.95 232.44 304.21 317.41 Salary 182.23 199.43 193.74 215.97 246.61 273.31 Non-Salary 48.15 16.18 21.21 16.47 57.60 44.11

12 Taxes on Vehicles 104.10 106.07 147.84 95.39 172.77 180.38 Salary 46.90 48.78 57.50 65.50 82.63 92.76 Non-Salary 57.20 57.29 90.34 29.90 90.13 87.62

13 Others taxes and duties on commodities and services 6.95 9.22 7.84 14.05 11.40 12.05

Salary 5.94 6.70 6.92 8.13 10.00 11.33 Non-Salary 1.01 2.53 0.92 5.92 1.40 0.72 14 Other fiscal services 45.91 45.70 44.64 16.92 8.25 9.14


15 Appropriation for reduction or avoidance of debt. 197.50 219.01 783.68 288.21 354.00 385.00

Non-Salary 0.00 354.00 385.00 Total(1)to (15) 1612.32 2033.21 2376.40 1960.35 2612.28 3088.56

348


Salary 1046.70 1245.85 1158.48 1300.80 1649.40 1863.63

Non-Salary 368.12 568.34 434.24 371.34 962.88 1224.92

16 Interest payments 7939.88 8871.02 10205.12 12404.78 17618.62 20450.17

17 Public Service Commission 31.41 31.17 58.34 50.82 66.32 68.70 Salary 17.54 17.57 18.39 20.84 34.88 39.28 Non-Salary 13.87 13.60 39.95 29.98 31.44 29.42

18 Secretariat General Services. 116.39 121.85 143.68 165.98 274.19 318.82 Salary 92.65 99.03 102.46 115.36 144.13 155.15 Non-Salary 23.74 22.82 41.22 50.62 130.06 163.67

19 District Administration 696.63 771.89 902.86 926.35 1051.73 1115.99 Salary 655.85 729.96 785.27 842.85 982.89 1057.03 Non-Salary 40.78 41.93 117.59 83.50 68.84 58.96

20 Treasury and Accounts Administration 170.06 196.29 178.08 213.14 281.93 365.72

Salary 158.21 167.41 161.99 182.87 234.60 230.51

Non-Salary 11.85 28.88 16.10 30.27 47.33 135.21

21 Police 2858.62 3359.86 3468.80 3959.91 4858.70 5455.91 Salary 2416.06 2824.43 2947.73 3407.39 4180.80 4732.35 Non-Salary 442.56 535.43 521.07 552.51 677.90 723.56

22 Jails 124.06 149.97 151.76 193.50 240.63 250.13 Salary 88.28 103.61 109.55 127.14 153.90 178.03 Non-Salary 35.78 46.37 42.21 66.36 86.73 72.10

23 Stationery and Printing 69.52 73.77 74.34 77.11 105.31 96.05 Salary 45.53 47.23 45.50 47.28 54.02 60.96 Non-Salary 23.99 26.54 28.84 29.83 51.28 35.09

24 Public works 174.38 370.17 390.30 325.38 384.90 388.71 Salary 122.53 134.52 136.08 149.95 171.92 191.06 Non-Salary 51.86 235.64 254.22 175.43 212.98 197.65

25 Vigilance 0.00 0.00 0.00 0.00 44.56 52.26 Salary 0.00 37.31 44.67 Non-Salary 0.00 0.00 0.00 7.25 7.59

25 Other Administrative Services 278.22 290.02 305.65 337.30 434.61 397.71 Salary 185.70 212.67 213.25 240.37 253.98 292.62 Non-Salary 92.53 77.36 92.40 96.93 180.63 105.10

26 Pension and other retirement benefits 11768.11 12596.57 13161.57 14860.30 18953.97 20769.25

Salary -44.03 -43.32 -51.16 -63.99 8595.77 9509.47

Non-Salary 11812.15 12639.90 13212.73 14924.30 10358.19 11259.78

27 Miscellaneous general services 83.82 75.40 235.22 254.34 391.60 468.58 Salary 3.97 3.27 4.90 -3.43 8.45 9.60 Non-Salary 79.85 72.13 230.31 257.77 383.16 458.99

II B Social Services(28-44) 28909.15 33261.75 38622.88 45275.90 58186.02 57826.33

28 General education 12753.37 14398.53 16605.76 19797.66 25160.84 26758.15 Salary 12060.66 13593.59 14206.31 17102.01 18202.74 19905.57 Non-Salary 692.71 804.93 2399.45 2695.66 6958.10 6852.58

349


29 Technical Education 534.13 690.69 817.33 1012.74 1027.28 1042.27 Salary 348.85 338.00 292.09 399.53 240.97 264.00 Non-Salary 185.29 352.69 525.24 613.21 786.31 778.27

30 Sports and Youth Services 83.41 75.70 125.79 217.17 178.04 160.32 Salary 17.61 19.67 18.18 20.55 22.75 23.49 Non-Salary 65.80 56.03 107.62 196.62 155.29 136.83

31 Art and Culture 94.86 100.93 112.96 128.27 150.84 168.96 Salary 74.03 83.43 89.02 104.13 127.24 141.92 Non-Salary 20.83 17.49 23.94 24.14 23.60 27.04

32 Medical and Public Health 3395.58 3539.02 4134.02 4486.51 6013.71 6534.73 Salary 1967.42 2300.71 2431.76 2974.20 3790.17 4185.22 Non-Salary 1428.16 1238.32 1702.26 1512.32 2223.54 2349.51

33 Family Welfare 680.10 680.56 852.25 944.27 1844.60 1940.39 Salary 416.52 474.08 492.04 527.68 556.79 601.75 Non-Salary 263.58 206.48 360.20 416.59 1287.81 1338.64

34 Water Supply and Sanitation 446.44 191.89 239.89 638.83 727.37 970.84 Salary 5.46 6.86 7.32 8.15 10.80 11.30 Non-Salary 440.98 185.03 232.57 630.68 716.57 959.54

35 Housing 593.92 620.68 723.39 297.45 2566.11 2174.64 Salary 8.49 7.67 8.46 10.16 1.23 13.27 Non-Salary 585.42 613.01 714.93 287.29 2564.88 2161.37

36 Urban Development 762.36 900.93 1378.59 1967.57 824.16 910.79 Salary -75.81 -11.59 27.87 32.04 38.87 45.25 Non-Salary 838.17 912.52 1350.72 1935.52 785.29 865.55

37 Information and Publicity 1054.03 -122.41 70.01 98.64 86.97 71.04 Salary 20.37 -155.31 22.49 25.09 33.59 42.20 Non-Salary 1033.66 32.90 47.53 73.55 53.38 28.84 38 Welfare of Scheduled Castes,

Scheduled Tribes and Other Backward Classes

1425.44

1880.47

1999.13

2833.76

3812.34

3852.64


39 Labour and Employment 287.41 241.63 302.48 372.69 485.00 610.10 Salary 159.32 151.26 175.97 198.68 252.99 304.21 Non-Salary 128.09 90.38 126.51 174.01 232.01 305.89

40 Social Security and Welfare 3606.80 6574.24 8324.56 8948.68 9629.84 8395.28 Salary 135.16 147.23 82.38 134.83 206.24 229.38 Non-Salary 3471.64 6427.01 8242.18 8813.85 9423.60 8165.90

41 Nutrition 2037.35 2152.69 2303.90 2591.30 3185.09 3399.37 Salary 1087.47 1245.77 1127.26 1306.83 1517.76 1727.58 Non-Salary 949.88 906.92 1176.63 1284.47 1667.33 1671.79

42 Relief on Account of Natural Calamities 1092.24 1189.35 531.71 795.74 2384.80 713.86 Salary -10.98 -25.39 -24.86 -64.37 0.00 0.00 Non-Salary 1103.22 1214.74 556.57 860.11 2384.80 713.86

43 Other Social Services 9.91 94.43 38.33 79.43 35.09 38.80 Salary 43.45 46.22 45.00 51.16 58.79 66.50 Non-Salary -33.54 48.21 -6.67 28.27 -23.70 -27.70

350


44 Secretariat-Social Services 51.81 52.43 62.77 65.18 73.94 84.16 Salary 48.46 50.12 51.52 59.13 71.02 81.16 Non-Salary 3.35 2.31 11.25 6.05 2.93 3.00

III C. Economic Services(45-82) 12222.36 14142.09 17628.36 19644.45 31161.40 40101.52

45 Crop Husbandry 1359.57 1352.80 3381.79 4338.26 5244.74 5558.14 Salary 403.93 456.21 453.02 499.64 566.44 597.98 Non-Salary 955.64 896.60 2928.78 3838.62 4678.30 4960.16

46 Soil and Water Conversion 136.60 99.25 131.01 92.76 98.99 102.58 Salary 23.65 28.44 27.03 28.17 35.36 40.78 Non-Salary 112.95 70.81 103.98 64.59 63.63 61.80

47 Animal Husbandry 273.17 506.44 652.59 741.19 811.64 852.85 Salary 208.00 225.65 261.08 309.63 422.29 479.37 Non-Salary 65.17 280.79 391.51 431.56 389.35 373.48

48 Dairy Development 24.98 62.61 55.19 43.47 56.90 53.69 Salary 19.11 20.31 14.23 23.02 29.27 33.13 Non-Salary 5.87 42.30 40.96 20.45 27.62 20.55

49 Fisheries 107.95 249.58 262.84 246.23 349.47 394.50 Salary 25.90 27.91 27.77 26.02 42.81 53.28 Non-Salary 82.05 221.67 235.07 220.21 306.66 341.23

50 Forestry and Wild Life 213.10 235.20 252.89 277.34 391.07 430.75 Salary 186.50 206.36 194.24 204.82 305.80 358.57 Non-Salary 26.60 28.84 58.65 72.52 85.28 72.18

51 Plantations 0.04 0.03 0.00 0.03 0.03 0.04 Salary 0.04 0.02 0.00 0.02 0.03 0.04 52 Food Storage and Warehousing 0.00 0.00 0.00 10.41 0.00 0.00

Non-Salary 0.00 0.00 0.00 10.41 0.00 0.00

53 Agricultural Research and Education 336.13 405.30 457.44 508.76 599.42 665.29

Salary 5.58 6.24 5.90 -1.57 6.00 8.39

Non-Salary 330.54 399.06 451.55 510.33 593.42 656.91

54 Co-Operation 483.77 519.25 527.87 426.13 641.37 2337.80 Salary 155.83 162.78 136.77 82.46 199.84 215.33 Non-Salary 327.94 356.47 391.10 343.67 441.52 2122.47

55 Other Agricultural Programmes 87.18 101.96 105.95 114.31 127.55 144.83 Salary 82.08 94.71 93.26 107.28 118.18 131.38 Non-Salary 5.11 7.26 12.70 7.02 9.37 13.46

56 Special Programmes for Rural Development 87.69 66.53 71.68 160.51 368.53 430.81


57 Rural Employment 250.34 529.34 210.86 -138.37 6209.35 9471.39 Salary 51.40 57.27 69.17 -496.78 101.07 105.86 Non-Salary 198.94 472.07 141.69 358.41 6108.27 9365.53

58 Other Rural Development Programmes 468.80 572.97 567.47 951.19 898.60 823.48


351


59 Hill areas 9.08 7.21 9.87 4.80 3.82 4.87 Salary 2.69 3.20 2.59 1.62 2.80 4.38 Non-Salary 6.39 4.01 7.29 3.18 1.02 0.49

60 Major and Medium Irrigation 698.68 643.97 521.02 1049.53 1103.74 1107.51 Salary 234.34 254.99 278.67 292.16 313.40 339.15 Non-Salary 464.34 388.98 242.36 757.37 790.34 768.36

61 Minor Irrigation 78.93 87.54 82.80 89.73 91.73 94.47 Salary 32.42 34.73 33.15 35.83 38.22 40.88 Non-Salary 46.51 52.80 49.66 53.90 53.52 53.59

62 Command Area Development 19.35 19.32 18.82 18.54 6.43 3.50 Salary 15.96 15.66 16.09 15.27 3.89 0.00 Non-Salary 3.39 3.66 2.73 3.28 2.54 3.50

63 Flood Control and Drainage 35.14 75.11 99.03 115.73 119.61 119.61

64 Power 1266.09 1774.45 1867.51 1865.66 4288.96 7183.70

65 New and Renewable Energy 2.13 2.04 1.78 2.72 20.61 3.06 Salary 1.67 1.92 1.75 1.83 1.29 1.34 Non-Salary 0.46 0.12 0.03 0.88 19.32 1.71

66 Village and Small Industries 659.15 539.65 776.44 948.00 964.70 1068.27 Salary 81.96 83.77 60.90 79.22 102.16 117.14 Non-Salary 577.19 455.87 715.54 868.78 862.54 951.13

67 Industries 724.45 50.54 859.71 588.14 1185.75 1749.81 Salary 6.74 7.05 7.06 8.25 10.40 10.33 Non-Salary 717.70 43.49 852.65 579.89 1175.35 1739.48

68 Non Ferrous Mining and Metallurgical Industries 9.21 9.53 11.22 11.54 12.38 13.64

Salary 7.92 8.16 9.41 9.93 11.45 12.97

Non-Salary 1.29 1.37 1.81 1.61 0.93 0.67

69 Other Outlays on Industries and Minerals -0.01 -0.31 -0.02 0.00 0.00 0.00

Salary -0.01 -0.31 -0.02 0.00 0.00 0.00

70 Shipping 0.00 0.00 0.00 0.49 0.00 0.00

71 Civil Aviation 0.08 0.08 0.06 0.08 0.00 0.00

72 Roads and Bridges 597.79 926.26 1289.39 1404.34 931.74 936.87 Salary 164.10 184.09 186.60 206.56 256.94 294.36 Non-Salary 433.69 742.16 1102.79 1197.79 674.80 642.51

73 Road Transport 22.81 22.79 222.78 536.63 532.84 232.81

74 Inland Water Transport 0.98 0.94 0.95 1.00 0.51 0.52

75 Other Transport Services 0.00 2.00 0.00 4.71 1.40 2.00 76 Other Scientific Research 8.54 8.92 7.71 4.47 8.45 9.92

Salary 0.00 0.00 -0.05 -2.02 0.00 0.00 Non-Salary 8.54 8.92 7.76 6.49 8.45 9.92

77 Ecology and Environment 12.48 10.58 6.28 8.27 10.19 6.10 Salary 1.63 1.70 1.88 2.40 3.20 3.61 Non-Salary 10.84 8.88 4.40 5.87 6.99 2.49

78 Secretariat-Economic Service 46.69 47.72 52.10 74.21 68.66 71.32 Salary 42.44 43.60 44.76 50.29 59.01 63.71 Non-Salary 4.25 4.13 7.34 23.93 9.65 7.62

352


79 Tourism 41.88 21.40 46.59 18.32 27.42 24.67

Salary 3.99 5.23 5.13 4.67 8.07 8.70

Non-Salary 37.90 16.18 41.45 13.65 19.35 15.97

80 CensusSurveys and Statistics 108.33 106.86 51.27 51.09 64.07 65.24

Salary 76.78 80.47 40.11 44.25 55.63 60.65

Non-Salary 31.55 26.38 11.16 6.84 8.44 4.58

81 Civil Supplies 4014.97 5019.88 4972.43 4973.98 5421.18 5697.13

Salary 54.34 57.92 58.66 65.21 66.09 74.64

Non-Salary 3960.63 4961.97 4913.77 4908.77 5355.09 5622.49

82 Other General Economic Services 36.31 64.36 53.02 100.28 499.56 440.35

Salary 19.00 22.75 19.01 26.52 30.38 35.75

Non-Salary 17.31 41.61 34.01 73.76 469.19 404.60

IV

D. Grants in aid and Contributions.

5861.37

7493.02

9164.08

9175.08

11120.58

12815.15

83 Compensation and Assignments to local bodies and Panchayat Raj Institutions

5861.37

7493.02

9164.08

9175.08

11120.58

12815.15

of which SFC devolution to PRIs 2783.90 3332.47 4067.92 4064.32 4532.96 4845.66

SFC devolution to ULBs 2038.36 2433.00 2969.21 2861.95 3080.45 3517.55 13th FC grants to PRIs 287.10 377.76 466.87 471.65 152.96 0.00 13th FC grants to ULBs 220.84 293.87 346.53 362.80 0.00 0.00 14th FC grants to PRIs 0.00 0.00 172.12

14th FC grants to ULBs 0.00 1737.69 2729.01 Assigned revenue transfer to PRIs 0.00

Others 531.17 1055.92 1313.56 1414.35 1616.52 1550.81

Total Revenue Expenditure (I+II+III+IV) 72916.31 83838.04 9706743.63 109824.67 147787.34 164029.56

353


Annexure -VIII (2)

Forecasts of Major Fiscal Indicators (2017-18 to 2021-22)

(Rs. In Crore)

RE 15-16 RE 16-17 Forecast Sum

2017-22 2017-18 2018-19 2019-20 2020-21 2021-22

Own Tax Revenue of which 86537.70 90691.87 103089.44 117181.77 131243.58 146992.81 164631.94 663139.53

Stamps & Registration 9469.29 9858.17 11205.78 12737.61 14266.13 15978.06 17895.43 72083.02

State Excise 6428.91 6636.08 7543.23 8574.39 9603.31 10755.71 12046.40 48523.03

Tax on Sales, trades etc 61972.92 64835.04 73697.98 83772.50 93825.20 105084.22 117694.33 474074.24

Taxes on Vehicles 4385.00 4793.91 5449.23 6194.14 6937.44 7769.93 8702.32 35053.07

Non-tax Revenue 8931.25 9723.95 10307.39 10925.83 11581.38 12276.27 13012.84 58103.72

Grants-aid from GOI 21687.35 24741.15 27710.09 31035.30 34759.53 38930.67 43602.36 176037.94

Share in Central Taxes 21149.89 23018.12 26240.66 29914.35 34102.36 38876.69 44319.42 173453.47

Total Revenue Receipts 138306.20 148175.09 167347.57 189057.24 211686.85 237076.44 265566.57 1070734.67

General Services of which 47319.34 53286.55 63653.92 70880.30 79474.44 89125.56 99965.56 403099.78

Interest payments 17618.62 20450.17 23313.19 26577.04 30297.83 34539.52 39375.06 154102.64

Pension and other retirement benefits 18953.97 20769.25 25279.84 27691.10 30737.12 34118.20 37871.20 155697.47

Miscellaneous general services 391.60 468.58 519.65 561.75 623.54 692.13 768.27 3165.35

Social Services of which 58186.02 57826.33 69464.18 76144.24 84520.11 93817.32 104137.23 428083.09

General education 25160.84 26758.15 33449.34 36903.88 40963.31 45469.27 50470.89 207256.69

Medical and Public Health 6013.71 6534.73 8036.99 8843.95 9816.79 10896.63 12095.26 49689.62

Urban Development 824.16 910.79 1015.25 1098.52 1219.36 1353.49 1502.37 6188.99

Economic Services of which 31161.40 40101.52 44998.37 48747.61 54109.84 60061.93 66668.74 274586.49

Crop Husbandry 5244.74 5558.14 6258.35 6783.98 7530.22 8358.54 9277.98 38209.08

Major and Medium Irrigation 1103.74 1107.51 1289.94 1406.61 1561.34 1733.09 1923.73 7914.70

Power 4288.96 7183.70 7937.99 8575.41 9518.70 10565.76 11728.00 48325.86

Industries 1185.75 1749.81 1935.55 2091.38 2321.43 2576.79 2860.23 11785.38

Grants in aid and Contributions 11120.58 12815.15 14160.74 15297.85 16980.61 18848.48 20921.81 86209.48

Compensation and Assignments to LBs and PRIs 11120.58 12815.15 14160.74 15297.85 16980.61 18848.48 20921.81 86209.48

Total Revenue Expenditure 147787.34 164029.56 192277.22 211069.99 235085.00 261853.29 291693.34 1191978.84

Capital Receipts 37680.26 48085.35 57011.35 68148.84 75103.00 81186.75 92949.80 374399.74

Fiscal Deficit 32359.59 40533.85 52438.77 51563.27 58752.41 65163.45 72218.17 300136.07

Capital Disbursement 30183.69 33853.04 39900.48 47432.36 54187.26 58277.35 67837.20 267634.65

Revenue A/c Surplus / Deficit -9481.14 -15854.47 -24929.64 -22012.75 -23398.15 -24776.85 -26126.77 -121244.16

GSDP at Current Prices 1212668.00 1369494.00 1540680.80 1725562.00 1924002.00 2154882.40 2413468.00 9758595.20

354


Annexure - VIII (3)

Forecasts of Major Fiscal Indicators Relative to GSDP (2017-18 to 2021-22)

(Percent)

RE 15-16 RBE 16-17 Forecast 2017-18 2018-19 2019-20 2020-21 2021-22

Own Tax Revenue of which 7.14 6.62 6.69 6.79 6.82 6.82 6.82

Stamps & Registration 0.78 0.72 0.73 0.74 0.74 0.74 0.74

State Excise 0.53 0.48 0.49 0.50 0.50 0.50 0.50

Tax on Sales, trades etc 5.11 4.73 4.78 4.85 4.88 4.88 4.88

Taxes on Vehicles 0.36 0.35 0.35 0.36 0.36 0.36 0.36

Non-tax Revenue 0.74 0.71 0.67 0.63 0.60 0.57 0.54

Grants-aid from GOI 1.79 1.81 1.80 1.80 1.81 1.81 1.81

Share in Central Taxes 1.74 1.68 1.70 1.73 1.77 1.80 1.84

Total Revenue Receipts 11.41 10.82 10.86 10.96 11.00 11.00 11.00

General Services of which 3.90 3.89 4.13 4.11 4.13 4.14 4.14

Interest payments 1.45 1.49 1.51 1.54 1.57 1.60 1.63

Pension and other retirement benefits

1.56 1.52 1.64 1.60 1.60 1.58 1.57

Miscellaneous general services 0.03 0.03 0.03 0.03 0.03 0.03 0.03

Social Services of which 4.80 4.22 4.51 4.41 4.39 4.35 4.31

General education 2.07 1.95 2.17 2.14 2.13 2.11 2.09

Medical and Public Health 0.50 0.48 0.52 0.51 0.51 0.51 0.50

Urban Development 0.07 0.07 0.07 0.06 0.06 0.06 0.06

Economic Services of which 2.57 2.93 2.92 2.83 2.81 2.79 2.76

Crop Husbandry 0.43 0.41 0.41 0.39 0.39 0.39 0.38

Major and Medium Irrigation 0.09 0.08 0.08 0.08 0.08 0.08 0.08

Power 0.35 0.52 0.52 0.50 0.49 0.49 0.49

Industries 0.10 0.13 0.13 0.12 0.12 0.12 0.12

Grants in aid and Contributions 0.92 0.94 0.92 0.89 0.88 0.87 0.87

Compensation and Assignments to LBs and PRIs 0.92 0.94 0.92 0.89 0.88 0.87 0.87

Total Revenue Expenditure 12.19 11.98 12.48 12.23 12.22 12.15 12.09

Capital Receipts 3.11 3.51 3.70 3.95 3.90 3.77 3.85

Capital Disbursement 2.67 2.96 3.40 2.99 3.05 3.02 2.99

Fiscal Deficit 2.49 2.47 2.59 2.75 2.82 2.70 2.81

Revenue A/c Surplus / Deficit -0.78 -1.16 -1.62 -1.28 -1.22 -1.15 -1.08

GSDP at Current Prices 100.00 100.00 100.00 100.00 100.00 100.00 100.00

355


Annexure - X (1)

SFC Devolution to Local Bodies

(Rs. In Thousands)

Sl. No.

Head of A/c 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

RE 2016-17

RBE

RURAL LOCAL BODIES

1 District Panchayats 3604.00196AA0903 2251900 2665974 3252354 3268038 3419071 3559170 3876530

2 Panchayat Unions 3604.00197AA0901 9007601 10663880 13018023 13069282 13676290 14236681 15506121

3 Village Panchayats 3604.00198AA0909 15481815 18328569 22374728 17742731 19797016 21471704 24228314

4 VPs - Infrastructure Gap Filling Fund

3604.00198AC0905 1097727 1666234 2034066 5063194 5846025 5222074 4845663

5 Clean Village Campaign

251500800AO0939 1500000 1500000 2000000 1500000

Total Rural Local Bodies 27839043 33324657 40679171 40643245 44238402 46489629 49956628

URBAN LOCAL BODIES

6 Municipal Corporations

3604.00191AA0903 5809320 6877522 8395793 10903427 10821312 11415431 12663176

7 Infrastructure Gap Filling Fund

3604.00191AB0901 183452 217185 520226 892304 750450 1062039 984914

8

Operation and Maintenance Gap Fillng Fund

3604.00191AC0909

122301

144790

176753

397816

367190

455159

422106

9 Devolution Arrears 3604.00191AD0907

Total 6115073 7239497 9092772 12193547 11938952 12932629 14070196

10 Municipalities 3604.00192AA0901 7939405 9399281 11474237 6794324 8407766 8846958 9813961


3604.00192AE0903 250718 439818 362344 705146 664002 823080 763308

12


3604.00192AF0901

167145

197880

241563

273448

284572

352749

327132

13 Devolution Arrears 3604.00192AG0909

Total 8357268 10036979 12078144 7772918 9356340 10022787 10904401

14 Town Panchayats 3604.00193AA0909 5615676 6648272 8115924 7228660 7814091 8276187 9180803

15 Special Village Panchayats

360400193AB0909


3604.00193AC0905 177337 265245 234367 712952 853846 769978 714062

17


3604.00193AD0903

118225

139964

170862

274178

342461

329991

306027

Total 5911238 7053481 8521153 8215790 9010398 9376156 10200892

18 Clean Village Campaign

221780800AH0938 437280 360348 1333333 1000000

Total Urban Local Bodies 20383579 24329957 29692069 28619535 30666038 33664905 36175489

Grand Total 48222622 57654614 70371240 69262780 74904440 80154534 86132117

356


Annexure - X (2)

State Finance Commission Devolution (Rs. In Lakh)

Sl. No.

Items First State Finance Commission Second State Finance Commission

1997

-199

8

1998

-199

9

1999

-200

0

2000

-200

1

2001

-200

2

2002

-200

3

2003

-200

4

2004

-200

5

2005

-200

6

2006

-200

7

As worked out by Finance Department 1 State's Own Tax Revenue 868564 962530 1091893 1228224 1300970 1434171 1594497 1935447 2332561 2777075

2

Less: Entertainment Tax (0045101AA01&05) (D.58)

11642 8819 8224 7092 156 7719 9931 0 0 0

Less: Other deductions from SOTR 3

Transferred to TNRRDF (305480797AC) (D.21)

2522 2522 2522 2522 2522 7295 5004 6117 6597 7267

4 Transferred to MV Tax Act (305480797AH) (D.21) 0 0 0 0 0

5 Less: Infrastructure Development Fund (D.10) (204000797AA) 0 16059 20231 23087 19503

6 Receipts under L.R. Surcharge Act

(002900101AF & AG) 0 2411 3642 3948 4335

7 Less: Receipts under Surcharge Act -5% of 105% (004000102AA & AI) 0 47281 41861 61722 66088

8 Surcharge under Motor Vehicle Tax Act (004100102AB0007) (R.R.) 0 0 0 0 0

9 Collection charges (202900001etc.) D.41 0 0 0 536 618

10 Stamp Duty –Grants to RLBs (360400102AA0900) D.42 0 0 0 0 0

11 Stamp Duty-Transfer to Funds for Priority Schemes (360400102AB1005) D.42 0 0 0 0 0

12 Local Cess - Local Cess Surcharge (360400101AD0909) (D.42) 0 0 0 0 0

13 Local Cess - Local Cess Surcharge(360400101AE1001(D.42)

0 0 0 0 0

14 Stamp Duty - Contribution to TURIF (360400200BG&BI1001) (D.34) 0 0 0 0 0

15 Stamp Duty – Grants to ULBs (360400200BH&BJ0909) (D.34) 0 0 0 0 0

16 Electricity Tax(0043) 0 0 0 0 0

Total Deductions(Sl.No.2to16) 14164 11341 10746 9614 2678 15014 80686 71851 95890 97811

17 Net State's Own Tax Revenue 854400 951189 1081147 1218610 1298292 1419157 1513811 1863596 2236671 2679264

18

Actual entitlement based on net State's Own Tax Revenue (as derived by the Government) (8% from 1997-98 to 2006-07) (9% from 2007-08 to 08-09) (9.5% in 2009-10) (10% from 2010-11 to 2016-17)

68352

76095

86492

97489

103863

113533

121105

149088

178934

214341

i. Rural Local Bodies (58% from 2002-03) 37594 41852 47570 53619 57125 65849 70241 86471 103782 124318

ii. Urban Local Bodies (42% from 2002-03) 30758 34243 38921 43870 46739 47684 50864 62617 75152 90023

19

Actual grants transferred by the State Government 61257 79293 80519 86714 40760 133144 126967 176673 165066 205012

i. Rural Local Bodies 35708 49902 44689 52066 18621 74238 67154 117286 99475 122476

ii. Urban Local Bodies 25549 29391 35830 34648 22139 58906 59813 59387 65591 82536

20

Dues / Surplus transfer to Local Bodies i. Rural Local Bodies -1886 8050 -2881 -1553 -38504 8389 -3087 30815 -4307 -1842

ii. Urban Local Bodies -5209 -4852 -3091 -9222 -24600 11222 8949 -3230 -9561 -7487

21

Net due to Local Bodies for the award period of previous State Finance Commissions i. Rural Local Bodies -36774 -6805

ii. Urban Local Bodies -46974 -47081

22 Devolution Arrears paid to ULBs 23 Net due to ULBs

357


Annexure – X (2) continues

State Finance Commission Devolution (Rs. In Lakh)

Sl. No.

Items Third State Finance Commission Fourth State Finance Commission

2007

-200

8

2008

-200

9

2009

-201

0

2010

-201

1

2011

-201

2

2012

-201

3

2013

-201

4

2014

-201

5

2015

-201

6

RE

2016

-201

7

RB

E

As worked out by Finance Department 1 State's Own Tax Revenue 2961879 3368404 3654666 4778218 5951731 7125428 7371811 7865654 8653770 9069187

2

Less: Entertainment Tax (0045101AA01&05) (D.58)

1298 1554 1160 1259 5364 8945 7070 8750 16882 17034

Less: Other deductions from SOTR 3

Transferred to TNRRDF (305480797AC) (D.21)

7993 7993 7993 15253 17998 17998 17998 17998 17998 17998

4 Transferred to MV Tax Act (305480797AH) (D.21)

0 0 0 0 0 0 0 0 0 0

5 Less: Infrastructure Development Fund (D.10) (204000797AA)

0 0 0 3180 48 60 103 100 101 60

6 Receipts under L.R. Surcharge Act

(002900101AF & AG) 48 80 40 0 0 0 0 0 0 0

7 Less: Receipts under Surcharge Act - 5% of 105% (004000102AA & AI)

0 0 0 0 0 0 0 0 0 0

8 Surcharge under Motor Vehicle Tax Act (004100102AB0007) (R.R.)

6353 2672 3497 3980 3770 3506 3246 3370 3876 4341

9 Collection charges (202900001etc.) D.41

634 545 626 1028 1116 1042 1193 1506 1586 1909

10 Stamp Duty-Grants to RLBs (360400102AA0900) D.42

15287 34014 17589 7742 35232 44087 62064 57342 35118 35118

11 Stamp Duty - Transfer to Funds for Priority Schemes (360400102AB1005) D.42

7644 17007 11213 15484 17616 22044 31032 28671 35118 35118

12 Local Cess - Local Cess Surcharge (360400101AD0909) (D.42)

2546 1930 397 0 0 0 0 0 0 0

13 Local Cess - Local Cess Surcharge (360400101AE1001) (D.42)

1273 965 182 0 0 0 0 0 0 0

14 Stamp Duty - Contribution to TURIF (360400200BG & BI1001) (D.34)

0 0 0 0 16714 32479 32621 38314 40968 40968

15 Stamp Duty-Grants to ULBs (360400200BH & BJ0909) (D.34)

0 0 0 0 40389 33572 32621 38314 40969 40969

16 Electricity Tax(0043) 0 35569 0 0 0 0 0 0 0 0

Total Deductions (Sl.No.2to16) 43076 102329 42697 47926 138247 163733 187948 194365 192616 193515

17 Net State's Own Tax Revenue 2918803 3266075 3611969 4730292 5813484 6961695 7183863 7671289 8461154 8875672

18

Actual entitlement based on net State's Own Tax Revenue (as derived by the Government) (8% from 1997-98 to 2006-07) (9% from 2007-08 to 08-09) (9.5% in 2009-10) (10% from 2010-11 to 2016-17)

262692

293947

343137

473029

581348

696170

718386

767129

846115

887567

i. Rural Local Bodies (58%from2002-03) 152362 170489 199019 274357 337182 403778 416664 444935 490747 514789

ii. Urban Local Bodies (42%from2002-03) 110331 123458 144118 198672 244166 292391 301722 322194 355368 372778

19

Actual grants transferred by the State Government 273394 310637 331636 482226 576547 703712 692627 749044 801545 861321

i. Rural Local Bodies 158359 171643 192655 278390 333247 406791 406432 442384 464896 499566

ii. Urban Local Bodies 115035 138994 138981 203836 243300 296921 286195 306660 336649 361755

20

Dues / Surplus transfer to Local Bodies i. Rural Local Bodies

5997 1154 -6364 4033 -3935 3013 -10232 -2551 -25851 -15223

ii. Urban Local Bodies 4704 15536 -5137 5164 -866 4530 -15527 -15534 -18719 -11023

21

Net due to Local Bodies for the award period of previous State Finance Commissions i. Rural Local Bodies -5920 -15690 ii. Urban Local Bodies -27679 -39511

22 Devolution Arrears paid to ULBs 14700 -12979 23 Net due to ULBs

Cumulative Net Due / Surplus from1997-1998 to 2014-2015 (Acc)

-55201

RLBs:(Due)

-15690

ULBs: (Due)

-39511

358


358


Annexure - X(3)

CriteriaandWeightagesforSFCDevolution

2017-18SFCDevolutionRs.10532.39Crores

Rs.InCrores

Sl. No.

Criteria

Weightage

%

ShareinEstimatedSFCGrant

Rural Urban

Total RuralShareinSFCGrant

UrbanShareinSFCGra

nt Dataoncriteria

Ratio

Dataoncriteria

Ratio

1 2011CensusPopulation 50 5266.19 40486223 0.562281 31517255 0.437719 72003478 2961.08 2305.11

2 O&MNeeds2017-18to2021-22 10 1053.24 10159.38 0.464570 11708.95 0.535430 21868.33 489.30 563.94

3 CapitalNeeds2017-18to2021-22 10 1053.24 45531 0.427450 60986.74 0.572550 106517.74 450.21 603.03

4 DebtOutstandingason31.3.2015 5 526.62 0 0.000000 49763.78 1.000000 49763.78 0.00 526.62

5 inversepercapitaHouse/PropertyTax 10 1053.24 0.001203 0.947057 0.021517 0.052943 0.022719 997.48 55.76

6 InverseAssignedRevenue 15 1579.86 1644.93 0.633055 2837.84 0.366945 4482.77 1000.14 579.72

GrandTotal 100 10532.39 5898.21 4634.18

0.560007 0.439993

56% 44%

359


Annexure - X(4) DistrictsbyAnnualPerCapitaIncomeandMonthlyperCapitaExpenditur

e(MPCE) InRs. Sl.No.

Districts AnnualPercapitaIn

come–constantprices(20

11-12)

MonthlypercapitaConsumptionExpenditure(MRP)(2011-12)

Rural Urban (1) (2) (3) (4) (5)

1 Ariyalur 19467 1316.25 1693.57

2 Chennai 66240 NA 3355.39

3 Coimbatore 77975 1716.67 3027.28

4 Cuddalore 56315 1437.76 1708.14

5 Dharmapuri 56262 1826.43 1698.19

6 Dindigul 56376 1403.25 1736.93

7 Erode 75670 1675.79 2197.80

8 Kancheepuram 92713 1848.54 2411.94

9 Kanniyakumari 96070 2165.59 2381.07

10 Karur 71795 1584.35 2147.49

11 Krishnagiri 69318 1458.71 2581.35

12 Madurai 67258 1474.48 2219.91

13 Nagapattinam 41208 1520.26 1768.39

14 Namakkal 68213 1630.99 1787.77

15 Perambalur 24256 1830.51 1881.47

16 Pudukottai 43890 1558.79 1504.50

17 Ramanathapuram 44707 1507.69 2143.50

18 Salem 58623 1595.57 1993.33

19 Sivagangai 50466 1277.49 1936.83

20 Thanjavur 48284 1450.18 2047.62

21 TheNilgiris 51738 1137.34 1788.59

22 Theni 39856 1446.48 1745.62

23 Thiruppur 88549 1696.23 2612.54

24 Thiruvallur 83594 1675.92 2608.84

25 Thiruvannamalai 41569 1398.44 2015.94

26 Thiruvarur 34727 1533.37 1596.42

27 Thoothukodi 74933 1261.04 1606.52

28 Tiruchirapalli 75393 1556.55 2369.11

29 Tirunelveli 61899 1491.55 1812.78

30 Vellore 63185 1718.25 1773.99

31 Villupuram 35295 1045.99 1660.88

32 Virudhunagar 87361 1402.67 1648.24

360


Annexure - X (5)

Technical Note on the Methodology for Monthly Per Capita Consumption

Expenditure (MPCE) Criteria for Rural and Urban Devolution

The programme of quinquennial surveys on consumer expenditure and

employment & unemployment, adopted by the National Sample Survey Office (NSSO)

since 1972-73, provides a time series of household consumer expenditure data. The

sixth - of the quinquennial series was held during the 55th round (July 1999-June 2000).

The seventh was conducted in the 61st round during July 2004 - June 2005 and 66th

round of NSS (2009-10) which was the eighth quinquennial survey in the series on

'household consumer expenditure' and 'employment and unemployment'. The latest NS

survey data on “household consumer expenditure” was available in 68 th round (2011-

12).

Definition

Household consumer expenditure (HCE) is expenditure incurred by households

on consumption of goods and services. Household consumer expenditure (HCE) during

a specified period, called the reference period, may be defined as the following:

i. Expenditure incurred by households on 'consumption goods and

services' during the reference period

ii. Imputed value of goods and services produced as outputs of

household (proprietary or partnership) enterprises owned by

households and used by their members themselves during the

reference period

iii. Imputed value of goods and services received by households as

remuneration in kind during the reference period

iv. Imputed value of goods and services received by households

through social transfers in kind received from government units or

non-profit institutions serving households (NPISHs) and used by

households during the reference period.

361


Level of Living Indicator

Firstly, as an indicator of level of living, monthly per capita expenditure (MPCE) is

both simple and universally applicable. Average MPCE is a single number that

summarizes the level of living of that population.

District Level Estimates

Usually, the NSSO survey is jointly conducted by NSSO and Department of

Economics and Statistics on matching sample basis. The Department of Economics and

Statistics has started pooling of central and State samples earlier. However from 66 th

round onwards, NSSO has started providing rigorous methodology to states for pooling

central and state samples so as to increase the sample size at district level. This

resulted in the availability of district level estimates for Household consumption.

There are three ways of calculating the MPCE, Uniform reference Period, Mixed

Reference period and uniform mixed reference period depending on the weekly recall,

weekly and monthly recall and Weekly, Monthly and annual recall respectively.

Generally Mixed Reference Period (MRP) is adopted by practitioners. The Union

Planning Commission released the MRP estimates in their poverty estimates.

Hence it has been decided to use the monthly per capita consumption (MPCE-

MRP) at district level estimated for the 68th round of the NS Survey. The same is

available at a disaggregated between rural and urban units. The distance criteria

approach has been used to calculate the distance, and the MPCE index at the district

level for rural and urban devolution purposes. Detailed working sheets are available with

the Commission.

Methodology

Methodology for Calculation of devolution index for both rural and urban are as

follows:

i. The MPCE for each district is taken and the maximum MPCE among these is

identified .The distance of each district MPCE (difference) from the maximum is

calculated. This distance will clearly be zero for the maximum MPCE unit.

362


ii. These distances are then normalized to a sum of 100. In other words, the

distance for each district is taken, divided by the sum of distances of all districts

and multiplied by 100. This provides a normalized measure of the distance from

the highest per capita unit. (Ideally, a transformation to a standard normal

distribution could have been used for this normalization (as compare to rescaling

to 100 sum)). However for the purpose of simplicity and ease of understanding

this have been done.

iii. The normalized distance estimates are MPCE at District level was treated as

proxy for the income level of the District. It is then weighted against the

population of the Local Bodies in the Districts to arrive at the MPCE based ratio

for the devolution.

363


Annexure -X(6)

VerticalSharingRatio:ULBsbasedon2011Population,Area,SlumpopulationandIncomedistance

Urbansharingratio44%shareinSFCdevolution2017-18Rs.4634.18Crore

Rs.InCrore

Sl. No.

Criteria

Weightage

Shareine

stimatedSFCgrant

Urban

Total

UrbanShareinSFCGrant MunicipalCorp. Municipalities TownPanchayats

Dataoncriteria

Ratio

Dataoncriteria

Ratio

Dataoncriteria

Ratio

MunicipalCorporations

Municipalities

TownPanchayats

1

2011population

65%

3012.21721

14838666

46.91

8739799

27.63

8053209

25.46

31631674

1390.25

860.57

758.62

2 AreainSq.Km

15%

695.127048

1701.35

14.93

2502.09

21.96

7192.76

63.12

11396.2

101.95

158.03

434.22

3

SlumPopulation

10%

463.418032

3584069

51.19

2077452

29.67

1339367

19.13

7000888

233.56

142.27

89.44

4

IncomeDistance

10%

463.418032

19990878

28.07

27215871

38.22

24001732

33.71

71208481

127.9

183.05

152.93

Total

100%

4634.18

Total

1853.66

1343.92

1435.21

Ratio

40

29

31

ANNEXURES · 2020. 11. 12. · Annexures Fifth State Finance Commission (c) Government of TamilNadu...

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