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Government of Karnataka

Report of Third State Finance

Commission

Sri A.G. Kodgi B.Sc. LL.B Chairman

December 2008

Dr. Mahendra S.Kanthi Ph.D.[U of K – USA/Economics]

Member

Sri. T. Thimmegowda M.A. (Economics) IAS (Retd.)

Member

Staff of the Third State Finance Commission

Sl.No Name Designation

1 Sri K.R. Shashidhara IAS Secretary

2 Sri Mohan Koujalagi PS to Chairman

3 Sri B.M. Lakshminarayana Under Secretary

4 Smt D. Pramila Kumari Research Officer

5 Sri Ilyas Pasha Research Officer

6 Sri Muniraju Section Officer

7 Smt Pushpavathibai Stenographer

8 Smt Radha Stenographer

9 Sri H.S. Srinivasaiah Assistant Statistical Officer

10 Smt Shashikala Sajjan Assistant

11 Sri P. Shivamurthy Stenographer

12 Sri V.V. Chikkareddy Junior Assistant

13 Smt V. Janakamma Junior Assistant

14 Sri V.M. Narayanaswamy Junior Assistant

15 Smt K. Susheelamma Junior Assistant

16 Sri Shivakumara S Driver

17 Sri Prakash Babu Driver

18 Sri Abdul Wahab Driver

19 Sri K. Manjunatha Driver

20 Sri Srirangamurthy Dalayat

21 Sri Yathish Dalayat

22 Sri Umesh Dalayat

23 Sri Prakash Dalayat

24 Sri Jagadish Dalayat

F O R E W O R D

His Excellency, Sri T.N. Chaturvedi, the then Governor of Karnataka

constituted the Third State Finance Commission, appointing me as its

Chairman, Dr. Mahendra S. Kanthi and Sri T. Thimme Gowda IAS(Retd.) as

Members, vide Notification dated 28th August, 2006.

Along with the two members, I assumed office on 6th September,

2006. However, owing to non-availability of office accommodation, staff,

vehicles and other necessary infrastructure, the Commission could not

immediately become fully functional.

The Appointment of Secretary of the Commission made in

November, 2006. I was provided Room No. 302 in Vidhana Soudha.

Accommodation for Members and Commission’s office was provided in the

Multistoried building. The Commission became fully operational in

February, 2007.

The Commission prepared questionnaires for Panchayat Raj

Institutions and Urban Local Bodies to collect various data. Also, a separate

questionnaire was sent to Hon’ble Members of Parliament (Lok Sabha and

Rajya Sabha) and Hon’ble Members of State Legislature (Vidhana Sabha and

Vidhana Parishath).

It took considerable time to get replies to questionnaires. Further,

since elections to Urban Local Bodies were delayed, entire data could not be

collected and the Report could not be prepared within the time limit. As

such, the Commission made a representation to the Governor seeking

extension of time. The Government issued Notification, extending the term

of the Commission upto 30th June, 2008. Again, as per the Govt.

i

Notification dated 18th June, 2008, the term of the Commission was

extended upto 31st December, 2008.

The Commission is thankful to His Excellency Sri T.N. Chaturvedi,

the then Governor who constituted the Commission and to Sri Rameshwar

Takur, His Excellency the Governor of Karnataka for having kindly

consented to extend the term of the Commission. Also, the then Hon’ble

Chief Minister Sri H.D. Kumara Swamy, Hon’ble Chief Minister Sri B.S.

Yeddyurappa and Hon’ble Minister Dr. V.S. Acharya, have extended their

full co-operation to the Commission. The Commission is deeply indebted to

them.

The Commission is also grateful to Sri P.B. Mahishi and Sri Sudhakar

Rao – Chief Secretaries to Govt. of Karnataka, Sri M.R. Srinivasa Murthy,

Principal Secretary, Finance Department and Sri Syed Zameer Pasha,

Secretary, DPAR for their Co-operation.

The Commission’s Secretary, Sri K.R. Shashidhara has carried out the

work very efficiently. He has given valuable suggestions and guidance. The

Commission is thankful to him.

The Commission is grateful to Research Officers Smt. D. Pramila

Kumari and Sri Ilyas Pasha and Sri H.S. Srinivasaiah, Asst. Statistical Officer

for their excellent work in collection and analysis of data. The Commission

would like to place on record the valuable services rendered by the officers

and staff.

The Commission is indebted to the Presidents and Vice-Presidents of

Zilla Panchayats, Taluk Panchayats, selected Grama Panchayats, Zilla

Panchayat Members, Deputy Commissioners and Chief Executive Officers

of Zilla Panchayats for their co-operation in holding meetings and

ii

participation in the discussions. The Commission also conveys its thanks to

the Press and Electronic Media for providing media coverage and

participation in Press meets.

I am thankful to my Private Secretary Sri Mohan Koujalagi and my

personal staff.

The Commission is indebted to Dr. G. Thimmaiah, Chairman, First

State Finance Commission, Sri K.P. Surendranath, Chairman, Second State

Finance Commission, Sri M.B. Prakash, Chairman, 5th Pay Commission, Dr.

A. Ravindra, former Chief Secretary and Former Deputy Chairman of the

State Planning Board, Sri Haranahalli Ramaswamy, Chairman of the

Karnataka Administrative Reforms Commission, Sri M. Veerappa Moily,

Chairman, Central Administrative Reforms Commission, Sri M.V.

Rajashekaran, Former Central Minister, Sri C. Narayana Swamy, former

President of Bangalore Rural Zilla Parishad and Sri S.S. Meenakshi

Sundaram IAS (Retd.) and former Deputy-Chairman of State Planning

Board.

I am also thankful to the National Institute of Rural Development,

Hyderabad, State Institute of Rural Development, Mysore and Institute of

Social and Economic Change, Bangalore for the co-operation extended in

presenting their views.

My regards to Dr. Mahendra S. Kanthi and Sri T. Thimme Gowda,

Members of the Commission for their co-operation.

(A.G. KODGI) Chairman,

Karnataka Third State Finance Commission.

iii

Chapter

No. C O N T E N T S Page No.

Foreword i - iii

1 Introduction 1 – 6

2 Evolution of Local Governance 7 – 16

3 Salient Features of 73rd Constitutional Amendment Act and Karnataka Panchayat Raj Act, 1993

17 – 25

4 Powers, Duties and Responsibilities of Gram Panchayats 26 – 35

5 Analysis of Finances and Expenditure Pattern of Gram Panchayats in Karnataka

36 – 74

6 General Problems faced by Gram Panchayats 75 – 80

7 Powers, Duties, Responsibilities and Problems of Taluk Panchayats

81 – 89

8 Powers, Duties, Responsibilities and Problems of Zilla Panchayats

90 – 96

9 The Fiscal State of Taluk and District level Governments in Karnataka

97 – 110

10 Analysis of Functioning of Panchayat Raj Institutions and Recommendations

111 – 118

11 District Planning Committee 119 – 124

12 Drinking Water Supply 125 – 127

13 House sites and Housing in Rural Areas 128 – 130

14 Activity Mapping for Panchayats 131 – 133

15 Suggestions for better utilisation of grants provided to Panchayat Raj Institutions.

134 – 136

16 Augmenting the resources of State Government – Some suggestions

137 – 138

a

Chapter No. C O N T E N T S Page No.

17 Cadre and Recruitment Rules for Rural Development and Panchayat Raj Department – A Necessity

139 – 142

18 Introduction of Ombudsman 143 – 144

19 Public Awareness, People’s Participation and Citizens Charter

145 – 147

20 Effective Supervision and Monitoring of Activities of Panchayat Raj Institutions – A Necessity

148 – 151

21 Functions and Problems of Urban Local Bodies 152 – 165

22 Bruhat Bangalore Mahanagara Palike 166 – 171

23 Sectoral Financial Activity of Panchayat Raj Institutions 172 – 183

24 Status of Urban Governance in Karnataka 184 – 198

25 Implications of Previous State Finance Commissions of Karnataka

199 – 206

26 Analysis of Grama Panchayats in Backward Taluks as identified by High Power Committee for Redressal of Regional Imbalances

207 – 217

27 Approach, Methodology and Selection of Indicators 218 – 228

28 Methods and Procedures for Distribution of Finances 229 – 274

29 Problems and Issues in Implementation of Programmes by various Line Departments in District Sector

275 – 290

30 Summary of Recommendations 291 – 319

Annexures 320 – 439

Douments and Reports referred to by the Third State Finance Commission

440 – 441

b

Lis t o f Annexures

Sl. No. A n n e x u r e s Page No.

1 Government Notification constituting Third State Finance Commission

320 – 321

2 A) Extension of Term given to Third State Finance Commission (upto June, 30th 2008)

322

B) Extension of Term given to Third State Finance Commission (upto December, 31st 2008)

323

3 Extracts from the Karnataka Panchayat Raj Act, 1993 (Section 267) relating to setting up of State Finance Commission

324 – 325

4 Extracts from the Karnataka Municipalities Act, 1964 relating to setting up of State Finance Commission

326

5 73rd Constitutional Amendment Act 1992 327 – 333

6 74th Constitutional Amendment Act 1992 334 – 341

7 Eleventh Schedule of the Constitution 342

8 Twelfth Schedule of the Constitution 343

9 Schedule I of Karnataka Panchayat Raj Act 1993 (Functions assigned to GPs – Section 58)

344 – 346

10 Schedule II of Karnataka Panchayat Raj Act 1993 (Functions assigned to TPs – Section 145)

347 – 349

11 Schedule III of Karnataka Panchayat Raj Act 1993 (Functions assigned to TPs – Section 184)

350 – 352

12 Summary of Recommendations of First SFC 353 – 368

13 Summary of Recommendations of Second SFC 369 – 382

14 Government Order regarding implementation of First SFC recommendations issued by Finance Department, GOK (G.O.No.FD 9 ZPA 94 Dated:31.3.1997)

383 – 385

c

Sl. No. A n n e x u r e s Page No.

15

Government Order regarding implementation of Second SFC recommendations issued by Urban Development Department, GOK (G.O. No.UD 121 SFC 2005, dated:12.4.2006)

386 – 389

16 Government Order regarding implementation of Second SFC recommendations issued by Finance Department, GOK (G.O.No.FD 338 Exp-9/2006, Dated:29.06.2006)

390 – 394

17 List of persons consulted by the Commission 395 – 398

18 Schedule of interactive & consultation meetings 399 – 400

19 Technical Notes 401 – 402

20 Classification of Properties - BBMP 403

21 Property Taxes Receipts and Expenditure - BBMP 404

22 Suggestions given by Abdul Naseer Sab State Institute for Rural Development

405 – 415

23 Speech of Sri. A.G. Kodgi, given at NIRD, Hyderabad on the occasion of conference of Chairpersons of SFCs

416 – 434

24 Speech of Sri. A.G. Kodgi, given at Vidyabhavana, Karnataka Panchayat Parishad and Global Rural Development Institute, Bangalore.

435 – 439

d

GL OS SARY

ATR Action Taken Report

BBMP Bruhat Bangalore Mahanagara Palike

BCs Backward Classes

CFC Central Finance Commission

CMC City Municipal Council

DPC District Planning Committees

FSFC First State Finance Commission

GOK Government of Karnataka

GP Gram Panchayat

HPCRRI High Power Committee for Redressal of Regional Imbalances

KMA Karnataka Municipalities Act 1964

KMCA Karnataka Municipal Corporations Act 1976

KPR Act Karnataka Panchayat Raj Act

MTFP Medium Term Fiscal Plan

NAC Notified Area Committees

NDDP Net District Domestic Product

NLGORR Non-Loan Gross Own Revenue Receipts

NLNORR Non-Loan Net Own Revenue Receipts

NREGP National Rural Employment Guarantee Programme

OBC Other Backward Classes

OLS Ordinary Least Square

PRIs Panchayat Raj Institutions

RIDF Rural Infrastructure Development Fund

SC Scheduled Caste

SCP Special Component Plan

SDG Statutory Development Grant

SFCs State Finance Commissions

SSFC Second State Finance Commission

ST Scheduled Tribe

TMC Town Municipal Council

TOR Terms of Reference

TP Taluk Panchayat

TSFC Third State Finance Commission

ULBs Urban Local Bodies

VAT Value Added Tax

ZP Zilla Panchayat

C H A P T E R – 1

Introduction

1.1 Karnataka was created on November 1, 1956, with the passing of the

States Reorganisation Act. Originally known as the State of Mysore, it

was renamed Karnataka in 1973. Karnataka is bordered by the Arabian

Sea to the west, Goa to the northwest, Maharashtra to the north, Andhra

Pradesh to the east, Tamil Nadu to the southeast, and Kerala to the

southwest. The state covers an area of 1,91,791 Sq.Kms. or 5.83% of the

total geographical area of India. It is the eighth largest Indian state by

area, with 53 million people it is the ninth largest by population. The

population of the state has increased four-fold, from 13.05 million in 1901 to

52.73 million in 2001.

1.2 The state is divided into 29 revenue districts. At the time of

reorganisation, initially there were 19 districts, but over time more districts

were created. Bangalore Urban district was created in 1986. Subsequently,

in 1997-98, another restructuring led to the creation of Udupi [from

Dakshina Kannada], Chamarajnagar [from Mysore], Koppal [from Raichur],

Bagalkot [from Bijapur], Gadag and Haveri [from Dharwad] and Davangere

[from Chitradurga, Shimoga and Bellary]. Recently, in the year 2007 two

more districts were created viz., Ramanagaram [from Bangalore Rural] and

Chikkaballapur [from Kolar]. The state has the second largest arid region in

India in the Bayaluseeme region of the northern part.

Constitution of State Finance Commissions:

1.3 Article 243[I] and Article 243[Y] of the Constitution envisages

formation of State Finance Commissions at the expiration of every fifth

year to review the financial position of the Panchayats and the

Municipalities. Section 267 of the Karnataka Panchayat Act 1993, Section

Third State Finance Commission 1

http://en.wikipedia.org/wiki/Unification_of_Karnataka

http://en.wikipedia.org/wiki/November_1

http://en.wikipedia.org/wiki/Mysore_State

http://en.wikipedia.org/wiki/Goa

http://en.wikipedia.org/wiki/Maharashtra

http://en.wikipedia.org/wiki/Andhra_Pradesh

http://en.wikipedia.org/wiki/Andhra_Pradesh

http://en.wikipedia.org/wiki/Tamil_Nadu

http://en.wikipedia.org/wiki/Kerala

C H A P T E R - 1

503-C of the Karnataka Municipal Corporation Act [Amendment] 1994 and

Section 302-B of the Karnataka Municipalities Act [Amendment] 1994 are

the sections which stipulate for constitution of State Finance Commission

in accordance with the provision of the 73rd and 74th Amendment to the

Constitution of India.

1.4 As per the Constitutional obligation, Karnataka has regularly

constituted State Finance Commissions to review the financial positions

of the Panchayats and municipalities. The First Commission was

constituted in the year 1994, the Second Commission was constituted in the

year 2000 and the present is the Third Commission.

1.5 In August 2006, Government of Karnataka constituted the Third

State Finance Commission [TSFC] as per the provisions of Article

243(I) vide Notification No.FD 8 ZPA 2006 dated: August 28, 2006

with the following members;

1. Sri. A.G.Kodgi, B.Sc., LL.B - Chairman

2. Dr. Mahendra S. Kanthi, - Member Ph. D. [U of K – USA / Economics]

3. Sri. T.Thimmegowda, MA [Economics], IAS [Rtd.] - Member

Terms of Reference:

1.6 The Terms of Reference given to the Third State Finance

Commission are as follows:

The commission shall review the financial position of Zilla

Panchayats, Taluk Panchayats, Grama Panchayats, Municipal

Corporations, City Municipal Councils, Town Municipalities and Town

Panchayats and make recommendations to the Government as to:

(A) Determination of the principles, which should Govern:

(1) The distribution between the State Government and the Zilla



C H A P T E R - 1

Corporations, City Municipal Councils, Town Municipalities

and Town Panchayats of the net proceeds of the taxes, duties,

tolls and fees levied by the Government which will be divided

between them and the allocation between the Zilla Panchayats,

Taluk Panchayats, Grama Panchayats, Municipal Corporations,

City Municipal Councils Town Municipalities and Town

Panchayats of their respective shares of such proceeds.

(2) The determination of the taxes, tolls and fees which may be

assigned to, or appropriated by the Zilla Panchayats, Taluk

Panchayats, Grama Panchayats, Municipal Corporations, City

Municipal Councils, Town Municipalities and Town

Panchayats.

(3) The Grant-in aid to the Zilla Panchayats, Taluk Panchayats,

Grama Panchayats, Municipal Corporations, City Municipal

Councils, Town Municipalities and Town Panchayats from the

consolidated fund of the State.

(B) The measures needed to improve the financial position of the Zilla


Corporations, City Municipal Councils, Town Municipalities and

Town Panchayats.

(C) The Commission shall also:

(1) Examine and make suggestions on the extent to which and

the manner in which the resources available to the local

bodies could best be utilized for meeting the expenditure of

these bodies and;


C H A P T E R - 1

(2) Make a detailed analysis of the repayment of loans and

advances extended by Government from time to time to the

local bodies and make suitable recommendations for

repayment of Government dues and the possibility of

adjusting these dues against future devolution revenues

from Government to these bodies.

(D) In making the recommendations the Commission shall have regard to

among other things to the resources of the State Government and the

demands thereon on account of expenditure of civil administration,

debt servicing, development and other committed expenditure.

Strategy and Work Progress of TSFC:

1.7 It took about six months to get accommodation, infrastructure and

the required staff. As such, the TSFC became fully operational in

March 2007. The TSFC was able to hold its meetings and made

correspondence thanks to Dr.V.S.Acharya, the then Minister for

Medical Education who provided the necessary infrastructure in his

office. Meanwhile the TSFC earnestly started its activities by undertaking

tours in the districts to hold interactive meetings with the elected

representatives of PRIs and the concerned district officers.

1.8 After the TSFC became fully operational, formats and

questionnaires were designed covering various socio-economic and

financial aspects pertaining to Panchayat Raj Institutions (PRIs) and

Urban Local Bodies (ULBs). These were sent to 5628 Grama Panchayats,

176 Taluk Panchayats, 27 Zilla Panchayats and 215 Urban Local Bodies.

Questionnaires were also prepared and sent to Hon’ble Ministers, Members

of Legislature and Members of Parliament (Karnataka).


C H A P T E R - 1

1.9 The TSFC adopted a strategy to undertake data entry pertaining to

PRIs at the district level and chalked out a time bound programme to

accomplish this. Although few districts took prompt action to comply with

requirement of TSFC [Dakshina Kannada was the first district to make

available the data as per the timetable], the flow of data from the other

districts was not as expected.

1.10 The TSFC held district level interactive meetings in all the districts

except Haveri district.

1.11 The TSFC held consultations with the experts, academicians, former

chairpersons of the SFCs Dr.G.Thimmaiah and Sri.K.P.Surendranath and

former Deputy Chairpersons of State Planning Board Dr.A.Ravindra and

Dr. S. S. Meenaxi Sundaram. The TSFC also visited Kerala state and

exchanged views. The TSFC had an opportunity to interact with Third

State Finance Commission of West Bengal when they made a visit to

Karnataka. The TSFC visited New Delhi and held discussions with

Sri.M.Veerappa Moily, Hon’ble Chairman, Central Administrative

Reforms Commission, Sri.M.V.Rajashekaran, Hon’ble Minister of State

for Planning, Government of India and Dr.Kirit S.Parikh, Member,

Planning Commission. The TSFC has also interacted with the Heads and

Faculty members of the Institute of Economic and Social Change

[ISEC], Bangalore the National Institute of Rural Development

[NIRD], Hyderabad and Abdul Nazeer Sab State Institute for Rural

Development, Mysore.

1.12 The TSFC studied various reports, papers and documents for gaining

inputs, among them the Report of High Power Committee on

Redressal of Regional Imbalances headed by late

Dr.D.M.Nanjundappa was fully made use for formulation of

recommendations on backwardness characteristics.


C H A P T E R - 1

1.13 The TSFC also held consultations with the Principal Secretaries,

Secretaries, Heads of departments and other senior officers of departments

of Rural Development & Panchayat Raj, Urban Development, Finance,

Housing, Agriculture, Horticulture, Animal Husbandry & Fisheries, Forest,

Social Welfare, Minority Welfare, Women and Child Development,

Industries & Commerce [Handloom and Sericulture], Health & Family

Welfare, Primary & Secondary Education, Minor Irrigation and Youth

Services.

1.14 Besides this chapter, the Report of TSFC is divided into twenty

nine Chapters. In Chapter-2, Evolution of Local Governance in rural

areas is narrated briefly. Salient features of 73rd Constitutional

Amendment Act and Karnataka Panchayat Raj Act, 1993 are discussed in

Chapter-3. Powers, Duties, Responsibilities and Problems of three tier

panchyat raj system in Karnataka are dealt in Chapter – 4, 6, 7 and 8.

Chapter – 5, 9, 23 and 24 devoted for Analysis of finances of PRIs and

ULBs which are based on primary and secondary data. Chapter-25 is on

implications of recommendations of previous SFCs, there is a

chapter – 26 on characteristics of backwardness prevailing across state,

methodology and approach of TSFC is dealt in a chapter – 27 and the

most crucial chapter – 28 is on Devolution of finances. Chapter-29 is

devoted to Problems and Issues in implementation of Programmes by

various line departments in district sector. Recommendations and

suggestions are summarized and given in Chapter-30 at the end.


CHAPTER – 2

Evolution of Local Governance

2.1 Panchayat Raj System in India has a long history and the essence of

this system was Grama Sabhas. Adult villagers were members of Grama

Sabhas. A five member committee including a head was conducting the

Grama Sabhas. As there were five members in these committees, it was

christened as ‘Panchayat’. These committees had limited functions. Every

village had a separate grama sabha and panchayat.

2.2 India is a vast country having an area of 3.29 million sq.kms. and

its population is above 108 crores. India has 29 States and 7 Union

Territories. It has more than six lakh villages and has over two lakh

GPs. The focus of this chapter is to narrate briefly the distance covered

by GPs in attaining the present status.

2.3 The system prevailing in the villages during the days of kings was

uniform across the country. This system was called as Panchayat Raj

Administration. To be precise, it can be said it was people’s

administration. The dream of ‘Rama Rajya’ by Mahatma Gandhiji

was based on the perception of village level administration. The

administration at the village level was run by the panchas1. People having

knowledge of this system were aware of the type of administration given by

the panchas. This system also existed during the period of many kings like

Ashoka, Akbar, Krishnadevaraya and Shivaji.

2.4 In this system of village level administration, people like shanbhogs,

gowdas, patels and kulkarnis were mainly occupying the panchas

position. They were not elected, instead it was hereditary. The powerful,

rich and upper caste people were occupying the position of panchas.

1 The five members of pachayat


C H A P T E R - 2

Besides taking part in the development of rural areas, the panchas on behalf

of ruling kings or palegars were also involved in collection of taxes

from the people.

Powers of Panchas:

1. Judicial:

2.5 The panchas had full authority to settle disputes pertaining to

family, land, social, quarrel, financial and religious and it was

binding on the people. Whether, everyone got justice is a debatable

issue.

2. Distribution of Land:

2.6 The current holdings of fertile and irrigated land by the upper

caste are an indication of the powers exercised by the Panchas. The

powerful, rich and upper caste people occupying the position of

panchas in those days may be one of the reasons that have resulted in

non availability of land to people belonging to SCs, STs and Backward

Classes, which one can notice now.

3. Tax Collection:

2.7 As said above, the panchas were involved in collection of taxes from

the people as imposed periodically by their kings and deposit it in the

treasury. During war times, it was mandatory to collect special taxes.

It is a point to be noted that the patels and shanbhogas were doing

this task till recently. There were many examples of development

works undertaken by efficient panchas. However, people had no faith

that unbiased justice would be given by the panchas. Although, the

people did not have authority to appeal, still complaints were filed in

the court of kings.


C H A P T E R - 2

Beginning of Decentralisation:

2.8 The above system was prevailing in the erstwhile Mysore state ruled

by Arasas. The then Divan Rangalacharya had opined that true

democracy should start from the bottom.

2.9 In 1870, Mayo who was famous in India had worked for recognition

of local institutions. Based on this, in 1882, Lord Ripon, the then Viceroy

of India took the initiative in the establishment of popularly elected

institutions at local levels. In Mysore region also Divan Rangalacharya

speaking on the occasion of first ever meeting of elected representatives,

expressed the importance of local governance and appealed for its adoption.

He further argued that local institutions should not have only the rich and

upper caste, but also there should be participation of people belonging to

SCs, STs and Backward Classes. Then only the democratic institutions

would be strengthened and its true values are realized.

2.10 Whatever weakness existed in the then administration setup, rural

people of India had to perform their day to day activities. Historians say

that, in Karnataka development of local administration setup was a

changing phase during the period 1862-1903. In the Panchayat setup

many changes took place during the period ruled by Gangas, Kadambas,

Chalukyas, Rashtrakutas, Hoysalas, Yadavs, Mysore Wodeyars,

Hyder Ali, Tipu Sultan, Mummadi Krishnaraja Wodeyar and the

Commissioners [representatives of British rulers].

2.11 In 1862, in the erstwhile princely state of Mysore a concept of new

‘local fund’ was established. An opportunity was given to rural

administration to have its own resources. Land tilling tax from the farmers,

income realized from sale of street cattle, et cetra were separated from the

state’s resources and utilized for construction of rural roads, bridges et


C H A P T E R - 2

cetra. This has resulted in giving a momentum to the concept of financial

or resources decentralization.

2.12 In 1884, giving an administrative shape to the concept of local

governance started. Britishers formed districts as administrative centres.

At the district level, it was named ‘local fund committee’. Deputy

Commissioner was the president and Assistant Commissioner was the

official member of this committee. Amaldars, Inamdars and peoples

representatives were members. Six landowners were nominated as

members. This committee was required to meet twice in a year to make

provision for health and providing basic amenities to the people. This

committee had the authority to sanction projects worth up to rupees one

thousand.

2.13 The Mysore Local Boards Act of 1902 provided for a three-tier

local self-government structure consisting of the panchayats at the village

level, district boards at the top level and taluk boards at the intermediatory

level. Deputy Commissioner of the district was the president and there were

26 members at this level. Taluk boards had 12 members, out of which 4

members from land owners were elected and others were nominated

members. At the villages, all the members were nominated. These three tier

institutions were unable to provide basic facilities to the people in view of

their financial deficiency.

Further Progress of Decentralisaion:

2.14 It was possible to notice further progress in establishment of local

governance with the enactment of Mysore Local Boards Act of 1902 and

Mysore Local Boards and Village Panchayat Act of 1918. In the

enactment of 1918 progressive steps were incorporated. Some of them are

listed below;


C H A P T E R - 2

• Administrative decentralization

• Enhancement of facilities to elected representatives

• Independent powers to all the three tiers

• Election of one member to taluk board

• Election of not more than four members to town municipalities

• Selection of one representative of district inamdar

• Selection of one member each from agriculture, horticulture, industry, commerce and education sectors

• Out of 20 members in taluk boards, 10 members were from non-governmental, four members were from land owners and there was one member from GPs

• GPs to have a minimum of 7 members and a maximum of 12, a minimum of 50 percent of members should get elected, village patel to be representative of government and members should select the panchayat president

• GPs were entrusted with works related to maintenance of village roads, tanks, open wells, agriculture and rural development

• Collection of taxes was entrusted to GPs

2.15 Development is not static, but, it is a continuous process and it is true

with respect to problems of local governance also. Enactment of the Mysore

District and Mysore Village Panchayats Act in 1926 was an example in

this direction. This enactment continued to exist even after independence.

This enactment had few characteristics of decentralization. Voting powers

were given to women and for the first time in panchayat raj history,

provision was made for appointment of secretaries.

2.16 After the First World War, GPs were constituted based on Monteck

Ford Report. But the system failed due to financial reasons. In the history

of panchayat raj system the period 1939-1946 was considered as Black

Spot. Mahatma Gandhiji had opined that as India was a country of villages,

the administration of entire country would be influenced by GPs. In 1962,


C H A P T E R - 2

Henri Hendick had said that it was necessary for the panchayat raj system

to have the following three goals;

• Every citizen should responsibly participate in the administration.

• Every village should participate in the development of country.

• Administration should be simplified by decentralization

2.17 After independence, in Mysore State, Venkatappa Committee was

constituted to suggest measures to address lack of coordination among

three tier local governance. This Committee gave its report in 1950. Main

recommendations of the Committee are given below;

• Introduction of two tier local governance - Group Panchayats at village level and District Boards at district level.

• Formation of co-ordination committee at taluk level consisting of presidents of all the group panchayats under the chairmanship of Assistant Commissioner.

• Administrative powers to group panchayats.

• Removal of financial deficit of group panchayats.

• Specific law required for collection of taxes.

• There should be an end to nomination of members to panchayats.

• Officials should not have powers to vote.

• Group panchayats should become autonomous.

• Accounts maintenance and verification should be done by officials.

• Habitations having a minimum of 2000 population and a maximum of 5000 population should be called group panchayat.

• Provision of 10 to 15 members in group panchayats.

• Age of member should be 25 years.

• Along with president, vice-president should also exist.

• The term should be four years.


C H A P T E R - 2

2.18 These recommendations of Venkatappa Committee on functions and

resources of group panchayats were progressive, as such, the report was

considered to be revolutionary.

2.19 Based on Venkatappa Committee Report, in 1952, the Village

Panchayat and District Board Act was introduced. But, most of the

suggestions were not considered. In 1957, Balwantray Mehta Committee

was appointed at the national level to find out reasons for failure of

community development projects implemented by the Central Government.

Recommendations of Balwantray Mehta Committee set the trend of

panchayat raj system in the post independence period. In 1959, panchayat

raj acts were introduced in all the states. In view of this, a three tier system

of panchayat raj came into existence. The Mysore Village Panchayats

and Local Boards Act, 1959 was enacted, within the broad framework of

the Balwanthrai Mehta Committee Report, to provide for village

panchayats, taluk development boards and district development councils.

The first two bodies were wholly elected and the last was a coordinating

body with nominated members and people’s representatives and district

level government officials. Assistant Commissioners, Deputy

Commissioners and Divisional Commissioners were given complete control,

appellate powers and supervision over the elected village panchayats and

taluk development boards. This system was continued for about 23 years till

1983. Unfortunately, these institutions were unable to develop as

decentralized units due to lack of political will and non-cooperation of

officialdom.

2.20 Meanwhile, the State government appointed Kondajji Basappa

Committee. This Committee gave the following recommendations;

• Formation of Zilla Parishads in place of District development councils.


C H A P T E R - 2

• Direct election of members of Zilla Parishads.

• Reservation for women and the Scheduled Castes (SCs) and Scheduled Tribes (STs).

• MP and MLA to become members of Zilla Parishads, but without voting rights.

• Strengthening of GPs, TDBs and Grama Sabhas.

• Improvement of financial position of PRIs.

• Formation of elected panchayat bodies.

2.21 Although an act was placed before the legislature based on the

recommendations of Kondajji Basappa Committee report, it was not

adopted.

2.22 Growth of panchayat raj system in the post period of independence

can be divided into three phases;

• 1959 to 1964 : Development Phase

• 1965 to 1969 : Slow Development Phase

• 1969 to 1977 : Negative Development Phase

[Source: Ashok Mehata Report]

2.23 In 1977, Ashok Mehata Committee was appointed which gave more

comprehensive role for Panchayat Raj institutions. For the first time an

indication was given to obtain constitutional status to panchayat raj

institutions and participation of political parties in the election process. In

order to further strengthen this system, G.V.K.Rao Committee in 1985 and

L.M.Singhvi Committee in 1986 were appointed by the Central government.

Based on these Committees report 64th amendment to the Constitution was

moved. But, the amendment was unfortunately defeated by just two votes

in the Upper House of parliament. Again in the year 1991, 73rd amendment

was proposed, with suitable modifications it was adopted by the parliament

in the year 1992. With the approval of President of India the 73rd

amendment to the Constitution became operational from April 24, 1993.


C H A P T E R - 2

2.24 Consequent to the 73rd amendment to the Constitution all the States

enacted the new panchayat raj acts.

2.25 Prior to this, in Karnataka under the leadership of Late Ramakrishna

Hegde and Late Abdul Nazeer Sab, a model three tier panchayat raj system

was introduced. This system had Mandal Panchayats, Taluk Panchayat

Samithis and Zilla Parishads. Reservation policy was also in force for all the

three tiers. Administrative decentralization under this made way for better

functioning of these institutions. But, over a period of time government’s

interference weakened this system. Salient features of Karnataka Zilla

Parishad, Taluk Panchayat Samithis, Mandal Panchayats and Nyaya

Panchayats Act, 1983 are given below:

2.26 Grama Sabha:

• All the voters of village were members of Grama Sabha. The duties of

Grama Sabha – verification of developmental works, sanction of new

works, Adult Education et cetra.

• GPs and ZPs should honour the works and beneficiaries identified by

the Grama Sabha.

2.27 Mandal Panchayat:

• Mandal Panchayats to be formed with a population of 8000 to 12000.

• There should be a representative for every 400 population.

• 18 percent reservation for SCs and STs.

• Not less 25 percent reservation for women.

• Term should be five years.

• Main functions [Section 56]are: Sanitation, Health, Public Works,

Roads, Drainage, Agriculture, Animal Husbandry, SC/ST

development, Other programmes and works given by the government.


C H A P T E R - 2

• Taxes [Section 116]: Building tax, Entertainment tax, Motor Vehicle

tax, Bus Stand tax, Market fee, Water rate, Mining tax.

• Appointment of full time Secretary [Section 121].

• Section 122 and 123 deal with other staff.

2.28 Taluk Panchayat Samithis:

• No elected representatives

• The members are - Legislators, Zilla Parishad members, Mandal

Panchayat Pradhans, President of APMC, President of Land

Development Bank and five nominated members from SC/ST.

• Main functions are – coordination with Mandal Panchayats.

• Taluk Panchayat Samithis did not have any independent powers.

2.29 Zilla Parishad:

• An elected representative for every 28000 population.

• Other members are – Local MLAs, MLCs, MPs; President of Central

Co-operative Bank.

• State Minister rank for Zilla Parishad President.

• President was the chief executive.

• Appointment of Chief Secretary to Zilla Parishad who was above the

rank of Deputy Commissioner.

• Main functions are:- preparation of plan, agriculture, horticulture,

animal husbandry, fisheries, SC/ST development, communications

and buildings, public health, industries, cooperation, education, rural

energy, food and civil supplies and statistics.


CHAPTER – 3

Salient Features of 73rd Constitutional Amendment and Karnataka Panchayat Raj Act, 1993

Objectives

3.1 73rd Amendment to the Constitution was passed in the year 1993 in

order to give suitable status, reservation and uniform panchayat raj system

in India. The main objectives of the amendment are follows;

1. Establishment of uniform panchayat raj system in the country.

2. Constitution of State Election Commission for conduct of elections regularly to the panchayat raj institutions.

3. Constitution of State Finance Commission for suggesting transfer of finances to panchayat raj institutions.

3.2 Salient Features of 73rd Constitutional Amendment [Part -9)]

243(A) Constitution of Grama Sabha

243(B) Constitution of three tier Panchayat Raj System

243(C) Mandatory for the States to enact laws

243(D) Reservation policy [SCs,STs, OBCs and Women]

243(E) Term of PRIs [5 years]

243(F) Disqualification of Member

243(G) Assignment of functions- Eleventh Schedule

243(H) Assignment of taxing powers, grants-in-aid

243(I) State Finance Commission and its terms of reference

243(J) Maintenance of accounts

243(K) Elections and constitution of Election Commission

243(L) Application of provisions to the union territories

243(M) Exclusion of hill areas

243(N) Status of previous laws relating to panchayats

243(O) Validity of law relating to delimitation and allotment of seats


C H A P T E R - 3

3.3 The Karnataka Panchayat Raj Act, 1993 was enacted consequent to

73rd Amendment to the Constitution. Its main features are as follows;

1. Ward Sabha mandatory

2. Assignment of functions to Grama Sabha, GP, TP and ZP [Schedule I,

II, III]

3. Funds, Functions and Functionaries

3.4 In the subsequent chapters, details about functionaries and resources

are discussed. In this chapter, issues related to Grama Sabha, Ward Sabha

and functions assigned to PRIs are discussed.

Ward Sabha and Grama Sabha

3.5 The essence of panchayat raj system is ward sabha and gram sabha.

Grama Sabha consist of persons who are in the list of electoral rolls of GPs.

Responsibilities of grama sabha are verification of accounts and

achievements of GPs; proposals regarding works put forth by the GP.

Grama Sabha is considered as the pillar of democratic set up.

3.6 Ward sabha is the platform where people can raise their voice to

prioritise requirements and participate in rural development. Selection of

beneficiaries and finalization of works are decided in ward sabha and gram

sabha.

Reservation

3.7 Empowerment of weaker sections of the society is the vital

characteristic of panchayat raj system. The following affirmative action has

been taken by the government to make reservation in all the local

governments;

• Reservation to SCs and STs in proportion to their population

• Reservation for Other Backward Classes

• 1/3rd reservation for Women in all categories


C H A P T E R - 3

Term

3.8 Term of members in PRIs is 5 years. The term of Adhyaksha and

Upadhyaksha of TPs and ZPs is 20 months. The term of Adhyaksha of GPs

is 30 months. Adhyakshas of GPs, TPs and ZPs are the executive heads.

They have administrative supervision and control over their respective

institutions.

Grama Panchayats

3.9 Population size of GPs is about 5-7 thousands. In few places there are

GPs with 2500 population size also. GPs came into existence consequent to

adoption of three tier panchayat raj system. As on 2006, there were 5652

GPs in the State. Average population size of GPs is 5300. A member is

elected directly to the GPs for an average 400 population. There are 91402

elected GP members in the State. The details are as follows;

Total No. of GPs 5652 Average Population Size of GPs 5300 Population per GP Member 400 Total No. of Members elected 91,402

3.10 Achievement in Reservation of GP Members [2007-08]

Category No. of Members

elected Percent

SCs 16907 19% STs 9880 11% BCs 30344 33% General 34181 37%

3.11 Reservation for Adhyaksha/Upadhyaksha of GPs

SCs 1033STs 470BCs 1004General 2265Total 5652Out of this, 1/3rd are women


C H A P T E R - 3

Resources of GPs

3.12 Income from collection of tax, cess, fees et cetra; Government grants

and scheme bound funds are the resources of GPs.

Functions of GPs

3.13 Functions assigned to the GPs are given in Section 58 and Schedule I

of Karnataka Panchayat Raj Act, 1993. The main functions are given below;

• Preparation of Budget and Annual Plan

• Supply of drinking water

• Sanitation

• Streetlights

• Houses/House sites distribution

• Selection of beneficiaries under poverty alleviation programmes

• Construction and maintenance of roads and culverts

• Implementation of schemes like SJSY, NREGA, SGRY et cetra

3.14 Standing Committees

GPs have the following standing committees to perform their functions:

1. Production Committee: agricultural production, animal

husbandry, rural industries and poverty alleviation programmes.

2. Social Justice Committee: for performing functions related to

Promotion of educational, economic social, cultural and other

interests of the SCs, STs and BCs. Welfare of women and Children.

3. Amenities Committee: for performing functions - education, public

health and public works.

Each committee should consist of a minimum of 3 members and

maximum 5 members. It is mandatory to have one woman and SC/ST


C H A P T E R - 3

members in social justice Committee. Adhyaksha of GP is the chairperson of

production committee and amenities committee. Upadhyaksha is the

chairperson of amenities committee

Taluk Panchayat

3.15 The present Taluk Panchayats are constituted differently compared

to 1983 Act. There are 176 TPs in the State. Since 1993, three elections

have been held . Every taluk has one TP. Quantum of reservation is similar

to GPs.

3.16 Taluk Panchayat Members and Reservation details [as on 2006]

Particulars No. Percent Total no. of TPs 176 Total Members 3683 SCs 678 27 STs 347 9 Backward Classes-A 913 27 Backward Classes-B 249 7 General 1426 39 Of which Women 1519 41

The above reservation system is a model in the country. TPs have no

powers to impose taxes.

3.17 Resources of TPs

• Government grants

• State and Central Plan grants

• Share in stamp duty and others

3.18 Main functions of TPs

• Preparation of Annual Plan

• Verification of Annual Plans of GPs and submission of consolidated Annual Plans to ZPs

• Preparation of annual budget and others


C H A P T E R - 3


1. General Standing Committee: perform functions relating to

establishment matters, communications, buildings, rural housing,

village extensions, relief against natural calamities and water

supply. Upadhyaksha of TP is chairperson of this committee.

2. Finance, Audit and Planning Committee: main function of

this committee is related to finance of TP. Adhyaksha of TP is

chairperson of this committee.

3. Social Justice Committee: perform functions related to

Promotion of educational, economic social, cultural and other

interests of the SCs, STs and BCs. Welfare of women and Children.

Chairperson of this committee is elected among the members

3.20 Number of members of the Standing Committees should not exceed

six [including Adhyaksha]. Group-A officer is working as executive officer in

TPs. Executive Officer Supervises developmental works.

Zilla Panchayats

3.21 There are 29 ZPs in the State. Creation of Yadgir district is under

consideration of Government.

• On an average, there is one ZP member for every 40,000 rural

population [excluding Chickmagalur and Uttar Kannada districts–

30,000 and Kodagu district- 18000]

• Members of Legislature and Parliament representing the district are

the members of the ZP

• Adhyakshas of TPs are also members of ZP


C H A P T E R - 3

3.22 Zilla Panchayat Members and Reservation details

Category No. Percent Total Members 1005SCs 184 18STs 84 8Backward Classes 334 38General 403 36

3.23 Reservation of Adhyakshas

Category No. SCs 5STs 2Backward Classes A & B 9General 13Total 29

3.24 Reservation of Women in PRIs

Women 39318 43% SCs 7860 20% STs 6424 16% Backward Classes 11817 38%

Out of Total GP members

General 13217 34% Women 1519 41% SCs 291 19% STs 209 14% Backward Classes 477 31%

Out of Total TP members

General 542 38% Women 373 37% SCs 71 19% STs 39 10% Backward Classes 121 32%

Out of Total ZP members

General 142 38%

3.25 Reservation of Women Adhyakshas in ZPs

Category No. Percent SCs 2 18.2STs 1 9.1Backward Classes 4 36.4General 4 36.4Total Women 11 100.0


C H A P T E R - 3

Resources of ZPs

3.26 ZPs have no taxing powers. The resources of ZPs are dependent on

transfer of funds under plan and non-plan grants by the Government.

Main functions of ZPs

3.27 The ZPs perform the functions which are assigned vide Schedule III

of Karnataka Panchayat Raj Act, 1993.


Following are the five standing committees of ZPs;

1. General Standing Committee

2. Finance, Audit and Planning Committee

3. Social Justice Committee

4. Educational and Health Committee

5. Agriculture and Industries Committee

1. General Standing Committee:

3.29 perform functions relating to the establishment matters,

communications, buildings, rural housing, village extensions, relief

against natural calamities and allied matters.

2. Finance, Audit and Planning Committee:

3.30 perform functions relating to finances of ZP, plan priorities, allocation

of outlays to developments, horizontal and vertical linkages,

implementation of guidelines issued by the Government, evaluation of

important programmes and small saving schemes.

3. Social Justice Committee:

3.31 perform functions relating to promotion of educational, economic,

social cultural and other interests of SCs, STs and BCs. Protecting

them from social injustice and all other forms of exploitation.


C H A P T E R - 3

Amelioration of SCs, STs and BCs. Securing social justice to SCs, STs,

Women and other weaker sections of the society.

4 Educational and Health Committee:

3.32 perform functions relating to all educational activities of the ZPs.

Undertake the planning of education in the district within the

framework of the national policy and the national and state plans.

Survey and evaluate the educational activities of the ZP. Perform

such other duties pertaining to education adult literacy and cultural

activities as the ZP may assign to it. Health services, hospitals, water

supply, family welfare and other allied matters.

5. Agriculture and Industries Committee:

3.33 perform functions relating to agricultural production, animal

husbandry, co-operation, contour bunding and reclamation. Village

and Cottage industries. Promotion of industrial development of the

district.

The standing committees perform the functions referred to

above to the extent the powers delegated to them by the ZP. These

committees perform matters assigned to them such additional duties

as prescribed by the ZP.


CHAPTER – 4

Powers, Duties and Responsibilities of Grama Panchayats

4.1 Framers of Indian Constitution had taken note of panchayat raj

system. They had opined that a two tier administration system for a vast

country to develop may not be adequate. As such, article 40 of the

Constitution envisages that “the States shall take steps to organize village

panchayats and endow them with such powers and authority that may be

necessary to enable them to function as units of self government.

4.2 But many state governments failed to give importance to this

constitutional provision; as a result, necessary direction was given for

creation of local governance through a constitutional amendment. The 73rd

and 74th Constitutional Amendments in 1992 gave a clear position to the

panchayat raj institutions and urban local bodies. Thus, a uniform three

tier panchayat raj system in the country came into existence. After 1993, as

per the constitutional amendment, the state governments passed

enactments to establish local governments.

4.3 In part 9 and 9a of Constitution, the duties and responsibilities of

panchayats and urban local bodies have been clearly mentioned. Articles

243[A] to 243[O] deal with panchayats, whereas, Articles 243[P] to 243[ZG]

deal with urban local bodies. In Articles 243[G] and 243[W], directions have

been given to the state governments to bestow required powers, personnel

and finances to panchayats and urban local bodies for their functioning.

Grama Panchayats

4.4 The GPs have to perform functions as envisaged in section 58 of

Karnataka Panchayat Raj Act, 1993. There are 17 functions listed in this

section – providing sanitary latrines to not less than ten percent of the


C H A P T E R - 4 households every year, supply of drinking water, sanitation, road

construction and maintenance and maintenance of records relating to

census and persons below poverty line are some main functions included.

There is provision to assign more functions to GPs vide section 59. Powers

have been given to GPs to perform all these functions as per section 60. In

Schedule I of the Act, preparation of annual plan, budget, maintenance of

essential statistics, agriculture, horticulture and other functions are

entrusted to GPs.

Grama Sabha and Ward Sabha

4.5 Being at the village level of panchayat raj system, the GPs have the

responsibility of performing few local basic functions.

4.6 Selection of beneficiaries under various state government

programmes are done at the GP level through Grama Sabha and Ward

Sabha. It is mandatory to hold Grama Sabha and Ward Sabha in order to

discuss and take decisions regarding local issues, works to be taken up and

selection of beneficiaries.

4.7 Prioritizing development works, selection of beneficiaries and other

matters are discussed and decisions are taken in the meetings of Grama

Sabha and Ward Sabha. In addition to this, local issues pertaining to

drinking water, health, sanitation, streetlights and financial allocation and

budget et cetra are also required to be discussed and follow up action need

to be initiated.

4.8 But, Grama Sabha and Ward Sabha are not being conducted regularly

as per rules and the functions assigned are also not being performed.

Participation of women, SCs, STs and BCs in these meetings is not

adequate in number. Officials who are required to be present in these

meetings for giving guidance are abstaining and thus making room for


C H A P T E R - 4 dereliction of duty. All this has resulted in “name sake” Grama Sabha and

Ward Sabha. It has come to the notice of the Commission that in some

cases, records are created to show that meetings of Grama Sabha and Ward

Sabha have been held.

4.9 As such, the concerned officials and elected representatives should

realize their responsibilities and should take proper measures to conduct

Grama Sabha and Ward Sabha meetings. Sections 63 to 110 of Karnataka

Panchayat Raj Act, 1993 stipulate the powers required for functioning of

panchayats. Sections 204 to 210 deal with taxing powers of GPs.

Appointment of Secretaries

4.10 There are 5652 GPs in the State. Every GP is required to have one

secretary. The TSFC has observed that about 1/3rd of these posts are vacant.

The present cadre of secretary is not competent to discharge duties

effectively. Hence, TSFC opines that this post should be upgraded to the

cadre of Deputy Tahsildar.

Maintenance of Basic Amenities

a. Drinking Water Supply

4.11 Maintenance of drinking water supply schemes is the main

responsibility of GPs. Central and State Governments have formulated

many schemes which are being implemented through PRIs. There are

1,42,223 borewells, 31,44,097 other sources in the State. MWS, ARWS,

NRWS and Swajaladhara are the major schemes meant for supplying

drinking water in rural areas. Construction of these schemes was till

recently with the GPs, now this has been entrusted to the ZPs. However,

maintenance of these schemes is the responsibility of GPs. But, GPs are

finding it difficult to manage these schemes in view of the fact that water

rates collocated are less and also grants received from Government is not


C H A P T E R - 4 adequate. It was observed that water supplied through taps is being

misutilised since meters have not been installed. Water rates are also not

being levied properly. GPs financial burden is increasing due to heavy

expenditure on electricity bills. Hence, judicious use of water, installation of

meters and systematic levy of water rates are some the measures which will

help in managing expenditure on this count by the GPs.

b. Sanitation

4.12 Every GP should provide sanitary latrines to not less than ten percent

of the households every year. But, in many of the GPs this has not been

done. Basically, awareness should be created among people about the need

for latrines. This programme can be implemented successfully if necessary

funds are made available as per the local needs.

c. Streetlights

4.13 Maintenance of streetlights under the jurisdiction of GPs is not being

properly done. In many of the GPs meters have not been installed for the

supply of electricity for streetlights. GPs financial burden is increasing due

to heavy expenditure on electricity bills. In view of this, net flow of

statutory grants to GPs is getting reduced. Rural Infrastructure

Development and Finance Corporation should be given responsibility of

maintaining Streetlights and rural electricity supply.

Housing

4.14 Government has formulated many schemes to provide houses to the

poor. Beneficiaries under Janata houses, Ashraya, Indira Awas, Ambedkar

Housing Scheme, Hudco Housing Scheme and other schemes are selected in

the Grama Sabha and Ward Sabha as per the houseless person list prepared

by GP. But, directions issued by the Government regarding selection of

Ashraya Scheme beneficiaries by the Task Force headed by the Legislators


C H A P T E R - 4 instead of GPs has resulted in delay in finalization of selection list. It is

necessary that Government formulates a workable policy based on the

following;

1. List of siteless should be prepared in ward sabha

2. Identified siteless persons should be given necessary documents

3. List of siteless and houseless should invariably be published in the

notice board of Panchayat.

4. Through TPs houses should be constructed for the poor who can not

afford to construct houses on their own.

5. Subsidy given under Ashraya scheme should be enhanced to

Rs.25,000 and including a loan of Rs.25,000 the amount per unit

should be Rs.50,000.

6. There should be a maximum of 4 percent interest on the loan amount.

7. Construction of latrine should be compulsory for the houses

sanctioned

8. There should be 10 years ban on transfer of rights.

9. To the extent possible the siteless should be given sites at their place

of stay.

10. Concerned Adhyaksha and Secretary of GP should be held responsible

for any irregularities in selection of beneficiaries.

Distribution of Sites

4.15 Distribution of sites to the siteless in rural areas is an important

responsibility of GPs. Despite this scheme being in existence for many

years, there are many poor persons without site or house even now. There is

no proper data bank about siteless and houseless persons in the State. As

per the list prepared in the year 2003, there were about 16.44 lakh


C H A P T E R - 4 houseless persons in the State, of which about 12.11 lakh houseless persons

were in rural areas. But, this also does not reflect the realities, as these

figures are constantly changing. Hence, the following points could be noted;

1. Applications pending under Akrama-Sakrama [Regularisation] of

siteless persons.

2. Applications pending under Section 93[c] of Land Revenue Act of

siteless persons.

3. Siteless persons who have not applied so far due to ignorance.

4. Siteless persons who are temporarily staying in private properties

4.16 It is necessary that identification of siteless persons as per this

method should invariably be done through Ward Sabha and Grama Sabha.

This list should be published in GPs and TPs. The Government should give

priority to this scheme.

4.17 Land acquired from the GPs should be converted to non-agricultural

purpose and accordingly the jurisdiction of Gramatana should be extended.

In this regard the GPs should send necessary proposals to the concerned

authorities and get the orders issued.

Grants and Maintenance of Accounts

4.18 The financial resources of GPs consist of own revenue and grants

form the Government. It is necessary to have experienced staff to manage

the financial matters of GPs. Computers have been provided to GPs for this

purpose. It has come to the notice of the TSFC that in many of the GPs

these are unutilized for want of trained staff.


C H A P T E R - 4 Assignment of Tax and its Collection

4.19 In the three tier panchayat raj system only GPs have been assigned

powers to levy taxes. But, staff of GPs do not have adequate technical and

administrative knowledge to properly exercise this power. This has resulted

in inadequate mobilisation of own resources. This has been discussed

separately in the other chapters.

Own Revenue Mobilisation

4.20 Taxes, fees, rates, et cetra are the main sources of own revenue of

GPs. Every GP has been given powers to levy tax upon buildings and lands

which are not subjected to agricultural assessment. Every GP should

prepare a list of properties and regularly revise the same and incorporate

necessary changes. Once in four years taxes should be revised. The list of

properties should contain the properties which are leviable and also non-

leviable. The last five years data pertaining to this indicates that GPs are

not adequately mobilizing their own revenues.

(Rs. in Crores)

Year Tax

Demand Tax

Collection Balance

2004-05 222.42 102.04 128.38

2005-06 273.80 119.77 154.03

2007-08 311.62 136.63 174.99

Source: Data collected by TSFC

Rural Roads

4.21 Types of roads in rural areas consist of;

1. National Highway

2. State Highway


C H A P T E R - 4

3. Major District Roads

4. Rural Roads

5. Fisheries Roads in Coastal Areas

6. Irrigation Roads

4.22 Although during the last two decades central and state governments

have invested adequate funds in the rural areas for construction and

maintenance of rural roads, all weather roads in rural areas have not been

provided completely. It has also not been possible to keep roads constructed

in good condition.

4.23 Although development of roads has been taken up under PM’s Grama

Sadak Scheme and CM’s Grama Sadak Scheme, have been roads are

damaged at many places within a short span of time due to un-scientific way

of construction. Roads constructed without proper storm drainage system in

coastal and malnad areas are being damaged and repair works have taken

up early. Shortage of funds for rural road sector is also adding to the

severity of the problem. Hence, construction of roads should be taken up

scientifically and adequate funds should be made available.

4.24 It was observed that network of rural roads is wide as compared to

other category of roads in the state. These roads are in bad condition due to

poor maintenance. Repairs have not been take up for many years, in view of

this, people living in rural areas are facing hardship. Funds allocated to

PRIs for maintenance of rural roads is not adequate and as a result, roads

repaired get damaged in a short span of time. It is necessary to upgrade

these roads and make them all weather roads. Adequate funds should be

provided for this purpose. There is a need to create a separate institution,

which will mobilize required capital for construction and maintenance of

rural roads.


C H A P T E R - 4 Rural Infrastructure Development and Finance Corporation

4.25 It has not been possible for the government to provide necessary

funds for the development of basic infrastructure in rural areas. The TSFC

has observed that people living in rural areas are put to hardship on

account of lack of infrastructure. As such, It is felt necessary that a separate

institution which will mobilize required capital for the development of basic

infrastructure in rural areas be created. Already, a similar institution exists

for urban areas. But, no such institution has been created for rural areas

although rural part covers more area. Hence, a Rural Infrastructure

Development and Finance Corporation should be created for mobilizing

capital for the development of rural roads, drinking water supply,

streetlights, et cetra in rural areas.

Jamabandhi

4.26 ‘Jamabandhi’ plays an important role in enhancement of efficiency,

transparency and responsibility of GPs. Every year, from 16th August to 15th

September, all GPs are required to arrange for Jamabandhi. It has come to

the notice of TSFC that this is being done as a mere formality. Jamabandhi

should be conducted properly to accomplish its basic objective. The Chief

Executive Officer and the Chief Accounts Officer of ZPs and Executive

Officers of TPs should give importance and chalk out programmes for

conducting Jamabandhi. They should also take follow up action with in

stipulated time. It is necessary that the following points are noted in

conduct of Jamabandhi;

1. Proceedings of GP

2. Proceedings of Grama Sabha

3. Levy of House Tax and its collection

4. Levy of water rate and its collection

5. Roads


C H A P T E R - 4

6. Details of grants and expenditure

7. Expenditure of GP

8. Details of works – quality verification

9. Verification facilities provided in GP area

10. Verification of accounts, audit report and follow up action

4.27 It is necessary that decisions of GP, grants allocated under various

schemes, its expenditure and details of works taken up are published and

public be allowed to verify at the office of the GP. The funds of a GP are

managed through a joint account held by Adhayaksha and Secretary of the

GP, Many instances of misutilization of funds have been noticed.

Irregularities committed by Adhyaksha and Secretary are noticed lately and

by the time legal action could be initiated the term of Adhyaksha would

have ended. Hence, it is necessary that proper mechanism is developed to

avoid wastage of public money.

Verification of Accounts

4.28 It has become difficult for the GPs to maintain accounts with the

existing staff. Hence, it is necessary that a post of Accounts Assistant is

created and the same is filled. Day to day financial transactions of GPs

should be monitored by TPs Online, as the GPs have been provided with

computers. GPs are required to fill up many formats for the works

implemented under NREGA, which is a difficult task. Instead, it is

necessary to simplify formats. Since crores of rupees is being spent, it is

necessary that an audit wing is created in the RD&PR on similar lines of

Co-operation department. The present system of auditing undertaken by

the State Accounts Department is taking lot of time and consequential

follow up action is also getting delayed. Action should be initiated to verify

accounts of GPs for the past ten years.


C H A P T E R – 5

Analysis of Finances and Expenditure Pattern of

Gram Panchayats in Karnataka 5.1 Although Karnataka Government has assigned 29 functions to the

GPs under Schedule-I1 of Karnataka Panchayat Raj Act 1993, all these

functions are yet to be transferred to GPs. However, the GPs have been

entrusted the task of performing basic functions2 in addition to

implementing a few programmes and schemes of higher level governments.

As such, in the decentralized environment, it is prerequisite to understand

financial devolution, fiscal powers assigned and nature of grants

transferred. The focus of this chapter is on the financial condition, sources

of funds and pattern of expenditure of GPs in Karnataka. The sources of

funds and main items of expenditure are shown in Diagram-5.1. In

Karnataka, the GPs are empowered to have independent source of revenue

in addition to the specific purpose grants which the Central and State

Governments transfer to them. The provisions incorporated in the

Karnataka Panchayat Raj Act 1993 on financial powers of GPs are given in

Box-5.1.

Diagram 5.1: Main Sources of Income and Expenditure of GPs

Main Sources of

Income Main Expenditure

• Central Government Grant • State Government Grant • Own Revenue • Others a

• Establishment • Developmental Work • Electricity bill • Non-development • Others b

1 Given in Annexure 9 2 Section 58 of Karnataka Panchayat Raj Act 1993


C H A P T E R - 5

a. includes revenue from auction of fruit bearing trees, auction of scrap material, special grants for drinking water, donations, revenue realized from any item which was not in the demand list etc.,

b. includes expenditure on purchase of electric items like bulbs, tubelights etc., replacement of damaged water pipes, repair of pumps, desiltation of choked drains, expenditure on SC/ST welfare, purchase of medicines for the poor, purchase of cycles to the handicapped, contingency expenditure for national festivals, purchase of meal plates and glasses for students, donations to Red Cross, natural calamities etc.,

5. Section 208 states that the Government may make discretionary grant to the Grama Panchayats, Taluk Panchayats and Zilla Panchayats.

6. Section 214 empowers the GPs in Karnataka to raise loans and form a sinking fund with the previous sanction of the Government and subject to conditions imposed by it from time to time.

1. Section 199 empowers Grama Panchayats to levy tax on buildings and lands which are not subject to agricultural assessment, levy water rate for supply of water for drinking and other purposes, levy tax on entertainment other than cinematography shows, levy tax on vehicles other than motor vehicles, levy tax on advertisement and hoarding, levy pilgrim fee on persons attending jatras, festivals etc, levy market fee, levy fee on registration of cattle, levy fee on buses, taxies and auto-stands and levy fee on grazing cattle in the grazing lands.

2. Section 202 provides Grama Panchayats to levy tax on factory/industry.

3. Section 204 provides for levy of local cess on the land revenue by the government whose proceeds shall be passed on to the Grama Panchayats.

4. Section 206 stipulates that the Government shall make annually a grant of rupees not less than five lakhs to each Grama Panchayat which shall be utilized for meeting the electricity charges, maintenance of water supply schemes, sanitation and other welfare activities.

Financial Powers of GPs BOX – 5.1

5.2 This study utilizes the data for the period 2002-03 to 2006-07 to

review the financial position of GPs. The TSFC had circulated a set of

formats to all the GPs of Karnataka seeking data on various social and

economic indicators. In response to this, all the ZPs except Chickballapur

district [newly created district] have made available the data to the TSFC.

5.3 Variables mentioned in Diagram-5.1 have been used to assess

financial conditions of GPs in Karnataka. Aggregated data at the State,

District and Taluk levels for the period of five years from 2002-03 to 2006-


C H A P T E R - 5 07 for easy understanding of income and expenditure differentials are given

in Appendix-5.1 and Appendix-5.2. The following variables from Census

2001 data have been used for analysis;

• Population • Literacy rate • Agricultural labourers • SC/ST population • Marginal labourers • Working population

Typology of Fiscal Dependence:

Diagram 5.2: Income Composition of GPs

Own Revenue16.5%

State Grants40.6%

Central Grants35.8%

Others7.1%

5.4 First- Case of zero decentralization sub-national governments

contribute zero to total expenditure. In such a case their fiscal dependence

is 100% on higher levels of governments. Second- in Karnataka GPs are

able to generate

approximately 16.5%

[Diagram-5.2] of their

income through

taxation, water charges

and other user/license

fees. This analysis also

illustrates the extent of

dependency of lower

governments on the higher level governments. Diagram-5.2 also indicates

grants received from the State Government [40.6%] and Central

Government [35.8%] were the main sources of income for the GPs. In

Karnataka, on an average, the dependency level of GPs was to the extent of

about 76%. However, as indicated in Appendix–5.1, the dependency level

was low in GPs of Bangalore Urban, Bangalore Rural,

Ramanagaram, Udupi, Dakshina Kannada, Mysore and Kodagu

districts. The ratio of own revenue mobilized in these districts was above 20

percent. At the same time, the extent of own revenue mobilization in the


C H A P T E R - 5 GPs of Bidar, Chitradurga, Chamarajanagar, Raichur, Davanagere,

Uttar Kannada and Gulbarga districts was much below the state

average of 16.5%.

Financial Deficiency:

5.5 Making use of the data, a balance sheet was computed from the data

for all the GPs for each financial year, which have been categorized into

three groups as follows;

1. GPs with financial deficit 2. GPs with financial surplus 3. GPs with chronic financial deficit

5.6 Data indicates that a significant numbers of GPs are facing financial

deficit3. Table-5.1 indicates GPs facing financial deficit varies from 27.5%

to as high as 37.0%. On an average, during the period 2002-07, the

percentage of GPs with financial deficit was 27.1 percent. The data also

reveals that 6.6 percent of total GPs were under chronic financial deficit.

Percentages of GPs with chronic financial deficit are those GPs which

had experienced financial shortfall for each year during the period from

2002-03 to 2006-07.

Table 5.1 Percentage of GPs with Financial Deficit,

Chronic Financial Deficit and Average Deficit for the period 2002-07

Year Percentage of

GPs

Average amount of Deficit

[in Rupees] 2002-03 32.7 1,83,225 2003-04 37.0 1,85,483 2004-05 33.9 2,57,465 2005-06 27.5 3,69,345 2006-07 31.0 4,49,832 2002-07 27.1 2,20,359

Chronic Deficit 6.6 2,53,104 Source: Data set collected by TSFC

3 Deficit=Revenue-Expenditure


C H A P T E R - 5 5.7 From Table-5.1, it can also be seen that the average amount of

deficit for the period 2002-07 was Rs.2,20,359. The interesting observation

is that the growth of financial deficit has been ascending from one financial

year to another, which is indicative of widening deficit gap. Thus GPs with

chronic financial deficit faced the largest amount of average deficit [Rs.

2,53,104].

5.8 Table-5.2, presents the percentage distribution of GPs with financial

deficits, surplus and chronic deficits across various sources of revenue

during the period 2002-07. It can be seen that major portion of revenue of

GPs was funded by State Government [40.6 percent] followed by Central

fund [35.8 percent], own revenue [16.5 percent] and other [7.1 percent].

Looking at the distribution of funding for GPs with financial deficit and

those with financial surplus, it can be seen that there is no noticeable

difference compared to the pattern of distribution. However, GPs with

chronic financial deficits depict a different picture with highest percentage

of funding from central government [39.2 percent] followed by state

government [36.2 percent], own revenue [16.1 percent] and others [8.5

percent].

Table 5.2

Percentage distribution of GPs with Financial Deficit, Surplus and Chronic Deficit by various Sources of Revenue Financial Sources

GPs with financial Deficit

GPs with financial surplus

GPs with chronic

financial deficit

Total GPs

Central grant 36.2 36.6 39.2 35.8 State grant 39.2 40.7 36.2 40.6 Own revenue 16.8 15.8 16.1 16.5 Others 7.8 6.9 8.5 7.1

Source: Data set collected by TSFC


C H A P T E R - 5 Financial Condition of GPs by Population Size:

5.9 Four categories of GPs by their population size as given in Box-5.2

are formulated.

BOX – 5.2

Categorisation of GPs by population size

Category Population Size

Percentage of GPs

I Less than 4000 14 II 4001-6000 32 III 6001-8000 39 IV Greater than

800015

Source: Derived from Census 2001

5.10 The chances of experiencing deficit with the increase of population

size are clear from Table-5.3. One can see percentage of GPs with chronic

deficit for the period 2002-

07 is higher with the

higher population size of

GPs. However, when per

capita deficit with relation

to the population size of

GPs comes into picture, it

shows a different pattern,

the lower and higher size GPs having a lower per capita deficit, while the

mid size GPs have a higher per capita deficit.

Table 5.3

Financial Conditions of GPs by Population Size for the Period 2002-07

Categories of GPs by population size

Chronic deficit [%]

Deficit [%] Surplus [%] Per capita deficit [Rs.]

Less than 4000 3.05 24.04 75.96 1564001-6000 6.66 26.97 73.03 4146001-8000 5.79 27.83 72.17 509

Greater than 8000 8.12 27.33 72.67 205

Determinants of GPs to be Deficit or Chronic Deficit:

5.11 With the evidence of pervasive financial deficits, it is essential to

know about the factors that lead some gram panchayats to incur a deficit

and chronic deficit. The Probit Model4 has been used to analyze the

4 Given in Annexure 19 as Technical Note-1


C H A P T E R - 5 propensity of GPs to incur surplus or deficit. This probit model is

conceptually preferable when the dependent variable is dichotomous. Here,

the dependent variable is dichotomous, [D=1] for deficit GPs and [D=0] for

surplus GPs. The same analysis also has been carried out for GPs to be

chronic deficit or not. The probit results are reported in Table-5.4. The

second column of the table indicates that percentage of per capita own

revenue generation has significantly negative influence on the probability of

a GP to be in deficit. On the other hand, GPs with higher percentage of

SC/ST population and percentage of agricultural population are positively

associated to be experiencing deficit. Similarly for analysis to determine the

chance of experiencing chronic deficit of a GP, shows that SC/ST

population, percentage of agricultural labour and own revenue generation

are significant. This analysis indicate that percentage of SC/ST population

and percentage of agricultural labour has significant positive influence,

while the amount of per capita revenue generation has negative influence.

From this, one can infer that as expected, GPs with higher percentage of

SC/ST population, agricultural labour indicate backwardness of GP, and

thus need for higher investment in development works.

Table 5.4

Probit analysis: Gram Panchayat with Financial Deficit for the Period 2002-07

Name of variable Deficit Chronic Deficit

Percentage of SC/ST population

.0209** .0504**

Percentage of literacy -.0278 -.0067 Percentage of agricultural worker

.0267* .0072*

Percentage of working population

.0032 .0230

Per capita own revenue -.0014* -.030** Constant -.625 -1.48

** Significant at the 99% level;* Significant at the 95% level.


C H A P T E R - 5 Expenditure Disparities:

Diagram 5.3: Expenditure Pattern of GPs

Establishment10.0%

Developmental Work54.7%

Electricity8.6%

Other Expenditure

12.4%Non-Development

14.3%

5.12 How do GPs spend their money and what is the extent of disparity

existing across them is shown in Diagram-5.3 and Table-5.5. It was found

that the major portion of the funds are spent on developmental work [54.7

percent] followed by non-developmental work [14.3 percent], others [12.4

percent], establishment

[10.0 percent] and

electricity [8.6 percent].

Nevertheless, the

distribution of expenditure

changes with change in

the financial condition of

GPs. For the GPs with

chronic financial deficit,

one can see that the percentage of expenditure on development work

[46.4%] was almost 10% lower than the GPs with surplus finance.

Consequently, GPs with chronic financial deficit spend more on

establishment [12.0%], non-development [17.2%], electricity bills [9.8%] and

other expenditure items [14.6%]. GPs with surplus financial condition

spend more on development work and less on other sectors as compared to

GPs in other two categories.

Table 5.5 Percentage distribution of GPs with Financial Deficit, Surplus

and Chronic Deficit by items of Expenditure Items GPs with

financial Deficit

GPs with financial surplus

GPs with chronic

financial deficit

Total GPs

Establishment 11.1 9.4 12.0 10.0Developmental Work 50.9 56.9 46.4 54.7Electricity 9.1 8.7 9.8 8.6Non-Developmental Work 15.5 13.5 17.2 14.3Others 13.5 11.4 14.6 12.4

Source: Data set collected by TSFC


C H A P T E R - 5 Patterns of Revenue and Expenditure of GPs by Population Size: 5.13 This section analyses expenditure pattern and sources of income of

GPs by their population size. Four categories of GPs according to their

population size as shown in Box-5.2 derived from Census 2001 population

data has been used for all per capita analysis.

5.14 It is common perception that bigger GPs with a larger population size

would have greater revenue capacity to spend more on its population.

However, the data in Table-5.6 depicts that per capita expenditure

decreases with the increase of population size of GPs. While smaller size

GPs have to spend Rupees 1210 per person, the bigger size GPs spend

Rupees 686 per person. Nevertheless, this result is an example of the

economics of size effect that leads smaller local governments to spend

more in per capita terms due to fixed cost of operating a local government

that is independent of population size. All local governments have in

common the need for a bill collector, waterman, accountant, support for the

local assembly and provision of basic level of physical facilities which

constitute fixed cost of GPs. Also, higher per capita expenditure for smaller

GPs can also be justified for higher per capita grant.

5.15 As far as the per capita revenue generation is concerned, the

expectation is that larger population suggests agglomeration effects, such

as regional markets or entertainment events, or more developed

infrastructure. All of these suggest a greater capacity to levy taxes, cess and

user charges resulting greater revenue generation. However, the data shows

that mid size GPs are not efficient unlike smaller and bigger GPs.


C H A P T E R - 5

Table 5.6

Average Per capita Expenditure, Own Revenue and Per capita Grant by Population Size for the period 2002-07

Categories of GPs by population size

Per capita Expenditure

[Rs.]

Per capita own

revenue [Rs.]

Per capita grant [Rs.]

Less than 4000 1210 160 1393 4001-6000 844 120 924 6001-8000 730 112 797

Greater than 8000 679 183 723 Distribution of Resources of Revenue by Population Size: 5.16 Table-5.7 indicates that, the dependency level decreases with size

of population of GPs. It also decreases the reliance of GPs on state

government funding with the increases in population size. The grant from

central government is uneven and does not indicate a consistent pattern

with the size of GPs.

Table 5.7

Percentage Distribution of Resources of Revenue by Population size of GPs for the period 2002-07

Categories of GPs by population

size

Central Government

Grant

State Government

Grant

Own revenue

Others

Less than 4000 32.38 50.17 11.35 6.094001-6000 36.32 43.75 12.97 6.966001-8000 38.70 40.25 14.13 6.92

Greater than 8000 34.57 31.67 26.25 7.51

Mobilization of Resources: District Level Pattern

5.17 Higher per capita income of district implies large economic activity in

the district leading to greater opportunity for a district to collect revenue.

Own revenue mobilized by the GPs of a district has been compared with its

per capita income. As expected the correlation analysis [Table-8] indicates

a positive association between per capita income of district and per capita


C H A P T E R - 5 own revenue collection by the GPs. From the Scatter Diagram-5.4 one

can notice that these two variables tend to be linear.

Table 5.8

Simple Correlation Coefficients of GPs Per capita own

revenue Per capita

district income

Per capita own revenue

Pearson Correlation

1 .443

Sig. [2-tailed] . .024

N 26 26 Per capita district income

Pearson Correlation

.443 1

Sig. [2-tailed] .024 .

N 26 26 * Correlation is significant at the 0.05 level [2-tailed].

Diagram 5.4

Scatter Diagram of log of per capita own revenue of GPs in relation to log of district per capita income

Log of district per capita income

10.610.410.210.09.89.69.49.2

log

of p

er c

apita

own

reve

nue

7.0

6.5

6.0

5.5

5.0

4.5

4.0

3.5

Distribution of Expenditure by Population Size:

5.18 The issue here is to observe the variation across gram panchayats

with different population size in terms of items of expenditures. The

purpose is to check whether the smaller local governments are forced to

restrict their spending to more on establishment cost, electricity bills and

non-development items. The results of cross sectional analysis are reported


C H A P T E R - 5 in Table-5.9 which indicates a population bias in the functional

distribution of gram panchayat spending. The share of expenditure for

establishment cost is lowest for smaller size GPs compared to other three

categories of GPs. The possible explanation for this pattern is that there is

greater need for housing in more heavily populated Gram Panchayats and

that funds available for housing and other infrastructure investment are

allocated disproportionately to more heavily populated places. The share of

development expenditure decreases with the increase of population size of

GPs. The expenditure on electricity bill has not come out with variation

across the GPs; it is more or less uniform irrespective of size of GP.

Nevertheless, in case of non-developmental expenditures, it can be seen that

share of expenditure increases marginally with the increase of population

size of GPs.

Table 5.9

Percentage of Distribution of Expenditure by Population Size of GPs for the Period 2002-07

Categories of

GPs by population size

Establish ment

Development Electricity Non- Development

Others

Less than 4000 7.68 59.96 8.46 12.64 11.264001-6000 9.82 55.21 8.95 13.77 12.266001-8000 10.19 54.56 8.70 14.43 12.11

Greater than 8000 10.79 53.83 8.15 14.97 12.26

Spending Pattern across Districts:

5.19 The pattern of spending varies across districts. The analysis in

Appendix-5.1 shows that GPs of nine districts viz., Bagalkot, Bangalore

Urban, Bellary, Bijapur, Chamarajanagar, Chikmagalur, Kodagu, Shimoga

and Uttar Kannada have spent more than the state average [54.7%] for

developmental works. At same time, the GPs in Mandya[38%],

Mysore[40%], Tumkur[45.5%] and Belgaum[48%] have spent less for


C H A P T E R - 5 developmental works as compared to the state average. GPs of Mandya

district with 15% top the list for spending more funds on establishment. On

the other hand GPs of Shimoga [5.9%] and Uttar Kannada [5.9%] have

the unique distinction of spending least on establishment expenses.

With regard to payments of electricity consumption GPs of Mysore district

have highest percentage [13.1%] and Shimoga has the least [5.6%].

Determinants of Per capita Expenditure of GPs

5.20 There are significant variations in the socio-economic conditions

across districts and talukas. Characteristics of district and taluk variables

which indicate the variations will be discussed in the Chapter-9. Since

GPs are the components of districts and talukas one can draw inference

that here too wide variations in socio-economic conditions prevail. These

underlying conditions are the basic factors which may determine

expenditure pattern of GPs. For this purpose ordinary least square5

[OLS] and probit model have been adopted. The same set of explanatory

variables are used to analyze the association and impact of socio-economic

conditions of the GPs. The dependent variables in this analysis are;

• Per capita expenditure

• Per capita establishment cost

• Per capita developmental cost

• Per capita electricity cost and

• Per capita non-developmental cost

5.21 The independent variables are included based on the following priori

reasoning:

• Population size should be negatively related to per capita

spending, because for smaller local governments, the fixed cost

5 Given in Annexure 19 as Technical Note-2


C H A P T E R - 5

effects will weigh heavily on budgets. Moreover, inter

governmental transfer may be allocated in disproportionate

amount to local governments with a smaller population,

resulting in higher per capita grant to the smaller GPs.

• The percent of SC/ST population is expected to be positively

related to per capita expenditures because this implies a

heavier concentration of poorer population. For this reason,

greater amounts of inter governmental transfers will flow to

local governments with higher proportion of SC/ST population

and these grants will result in higher per capita expenditures.

• The marginal effect of variations in the literacy rate on per

capita expenditures should be positive as literacy signals the

higher socio-economic condition of that region. Socio-

economically advanced GPs with greater concentration of

literate population are expected to receive lower per capita

grant resulting in lower per capita expenditure.

• The shares of agricultural labourers and marginal workers are

expected to have positive impact on expenditure because of the

likelihood that larger shares of agricultural workers and

marginal workers indicate a more agrarian economy and more

backward or poverty driven area. The simple correlations

reported in Table-5.10 suggest that where the agricultural

share of employment is high for a GP, we can expect

significantly less literacy and a greater percent of SC/ST

population.


C H A P T E R - 5

Table 5.10

Matrix of Simple Correlation Coefficients of GPs

Variables Total Population

% of SC/ST

Population

% of agricultural

labour

% of working population

% of marginal

labour Total Population --- % of SC/ST Population 0.038** --- % of agricultural labour .023 .270* --- % of working population

-0.119

-0.116**

.026 ---

% of marginal labour 0.021

0.104**

-.005 -0.933**

---

% of literacy -0.119**

-0.445

-.414** 0.232**

-0.219**

**Correlation is significant at the 0.01 level [2-tailed] *Correlation is significant at the 0.05 level [2-tailed]

Explaining Variation of Per capita total Expenditure

5.22 The results of the [OLS] analysis to explain the per capita

expenditure variation is presented in Table-5.11. About 42 percent of the

variation in per capita expenditures among the GPs in the sample can be

explained by these variables. Population size exerts the expected significant

and negative size effect. The concentration of poverty [SC/ST population] is

significant in leading to higher levels of per capita expenditures. This is an

expected result because higher proportions of SC/ST population draw in

more intergovernmental transfers to address the greater expenditure needs.

The literacy rate exerts a positive marginal effect on spending. The reason

could be that better education leads to more demand for public resources,

effective implementation of development work, greater accountability of

expenditure of funds and greater willingness to pay for services. All of these

contribute to a higher rate of economic development. A larger share in

agricultural employment leads to significantly higher levels of per capita

expenditures, as hypothesized. However, larger share of marginal and

working population does not exert any statistically significant association

on spending.


C H A P T E R - 5 5.23 From this analysis, one can conclude that expenditures are

significantly higher in less populated and more backward GPs. At the

margin, however, higher rates of literacy are associated with higher levels of

spending

Table 5.11

OLS Estimation of the Determinants of Variations in Per Capita Total Expenditures of Gram Panchayats: 2002-07 [Log Per Capita

Expenditures]

Indicators Correlation coefficient [Constant] 10.79** log of population -.528** log of literacy .317** log of agricultural labour .016* log of marginal labour -.050 log of working population -.178 Log of SC/ST pop .083*** R2 0.42

** Significant at the 99% level; * Significant at the 95% level. Explaining Variation of Per capita Establishment Cost

5.24 OLS analysis has been done simultaneously for per capita expenditure

of establishment cost, for development cost, for electricity bill and for other

non-developmental expenditure which are presented from Table-5.12

through-5.15. For the establishment cost, it is observed that population

size and level of literacy has negative influence. On the other hand, size of

SC/ST population and casual worker has positive influence on it.

Agricultural labour, marginal labour and volume of working population do

not show any significant impact.


C H A P T E R - 5

Table 5.12

OLS Estimation of the Determinants of Variations in Per Capita Total Expenditures for Establishment Cost of GPs: 2002-07 [Log

Per Capita Expenditures]

Indicators Correlation coefficient [Constant] 4.731** log of population -.194** log of literacy -.271** log of agricultural labour -.014 log of marginal labour .024 log of working population .116 Log of SC/ST pop .153** R2 0.35

** Significant at the 99% level; * Significant at the 95% level.

Explaining Variation of Per capita Development Cost

5.25 In determining the per capita developmental expenditure as shown in

Table-5.13, it was found that population and level of literacy has negative

impact. Similarly, proportion of marginal labour and working population

has also negative impact. The positive association appeared for proportion

of SC/ST and for agricultural labour. This is an expected result because

higher proportions of SC/ST population draw in more intergovernmental

transfers to address the greater expenditure needs.

Table 5.13

OLS Estimation of the Determinants of Variations in Per Capita Total Expenditures for Development Cost of Gram Panchayats:

2002-07 [Log Per Capita Expenditures]

Indicators Correlation coefficient [Constant] 14.934** log of population -.730** log of literacy -.107* log of agricultural labour .063** log of marginal labour -.071* log of working population -.619* Log of SC/ST pop .057** R2 0.32



C H A P T E R - 5 Explaining Variation of Per capita Electricity Bill

5.26 Table-5.14 shows the OLS estimates for per capita expenditure for

electricity bills. About 55 percent of the variation in per capita expenditures

among the gram panchayats in the sample can be explained by these

variables. Population size exerts the expected significant negative size

effect. The concentration of literate population is significant in leading to

higher levels of per capita expenditure on electricity bill. This is an

expected result because better education leads to more demand for public

resources and at the margin a greater willingness to pay for services. One

might think of this as the impact of economic growth effect. Expectedly,

marginal impact of agricultural and marginal labour, and SC/ST population

show negative influences. However, they are not statistically significant.

Table 5.14

OLS Estimation of the Determinants of Variations in Per Capita Total Expenditures for Electricity Bills of Gram Panchayats:


Indicators Correlation coefficient [Constant] 7.773** log of population -.525** log of literacy .174* log of agricultural labour -.035* log of marginal labour -.040 log of working population -.037 Log of SC/ST pop -.025 R2 0.55


Explaining Variation of Per capita Non-development Expenditure

5.27 From the Table-5.15, one can see per capita non-development

expenditure is not well explained by the concerned explanatory variables.

These variables explain only 15 percent of its variation. Thus it indicates

influence of non socio-economic factors on non-development expenditure.

However, level of literacy and proportion of SC/ST population show


C H A P T E R - 5 significant positive impact on it. With regard to size of population, the

impact was significantly negative.

Table 5.15

OLS Estimation of the Determinants of Variations in Per Capita Total Expenditures for Non-development of Gram Panchayats:


Indicators Correlation coefficient [Constant] 4.268** log of population -.368** log of literacy .351** log of agricultural labour .026 log of marginal labour .017 log of working population .061 Log of SC/ST pop .073** R2 0.15

** Significant at the 99% level ;* Significant at the 95% level.

Fiscal Responsibility:

5.28 Fiscal responsibility is widely discussed throughout the world. Many

countries like Brazil have constitutional provisions for various levels of

governments to mandatorily follow Fiscal Responsibility norms. By

definition Fiscal Responsibility involves three components;

1. Optimal Allocation of Resources 2. Preparing for the Future 3. Avoiding Debt

5.29 Previous sections dealt with the overall financial position of GPs

inter-alia their socio-economic conditions and sources of funding. As already

mentioned, the GPs in Karnataka are empowered with taxing powers to

raise local revenues. The relevant sections of Karnataka Panchayat Raj Act

1993 which authorize these rural institutions with taxing powers are shown

in Box-5.1. Based on these powers the GPs are supposed to have what is

known as revenue “DEMAND” for each fiscal year. This section examines

the fiscal responsibility of GPs in regard to “COLLECTION” of taxes, fees,

user charges, et cetra. Thus the Demand and Collection data has been


C H A P T E R - 5 analyzed to measure the performance of GPs. The point to be remembered

here is that the GPs in Karnataka are required to meet certain expenditures

like payment of salaries to staff [other than secretaries], payment of

honorarium and sitting fee to members from their own revenue. In view of

this compulsion every GP should collect at least an amount which would

suffice the requirement on these items of expenditure.

Diagram 5.5: Trends in Own Revenue Demand and Collection of GPs

0

100000

200000

300000

400000

500000

600000

700000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Year

Rup

ees

Demand Collection

5.30 The TSFC received data on Revenue Demand and Tax Collection

from 5450 GPs for a period of 6 years from 2001-02 to 2006-07. The

collection made by the GPs

against the each year’s

demand has been analyzed.

The mean values of Demand

and Collection for the years

2001-2002 to 2006-2007 are

given in Appendix-5.3. In

Diagram-5.5, the trends in

‘demand and collection’

[average] of own revenue by

the GPs in Karnataka is shown. It can be seen that, there was a quantum

jump during the financial year 2004-05 both in terms of demand and

collection. But, the gap between demand and collection is widening year

after year. The performance of GPs across districts reveals interesting

trends. In Appendix-5.4 [diagram-5.6 through 5.32], district-wise

trends in Collection of Own Revenue vis-à-vis Demand are shown. A cursory

look at the graphs shows that the trend lines of GPs of districts with higher

per capita income are close to one another, whereas, they are divergent in

case of districts with lower per capita income. The better performing

districts are Dakshina Kannada, Bangalore Rural [undivided], Bangalore

urban, Kodagu, Udupi and Uttar Kannada where the deficits are not severe.

At the bottom of list are districts like Bidar, Bijapur, Chitradurga,

Gulbarga, Chamarajanagar and Raichur experience chronic deficits.


56

Appendix – 5.1 Composition of Income and Expenditure of GPs in Karnataka (Percentages)

INCOME EXPENDITURE Sl. No. District Central

Grants State

Grants Own

Revenue Others Total Establishment

Developmental work

Electricity

Non-Develop

ment

Other Expenditure

TOTAL

1 Bagalkot 37.0 43.4 14.5 5.0 100.0 7.7 62.4 8.5 12.1 9.2 100.0

2 Bangalore Rural 21.7 30.9 38.4 9.0 100.0 10.3 47.0 6.5 17.9 18.4 100.0

3 Bangalore Urban 19.4 19.9 53.3 7.4 100.0 7.8 60.5 6.3 12.5 13.0 100.0

4 Belgaum 28.4 44.7 19.0 7.9 100.0 10.6 48.0 11.5 17.2 12.7 100.0

5 Bellary 44.3 37.8 10.8 7.1 100.0 7.3 66.0 5.9 10.3 10.6 100.0

6 Bidar 49.2 39.8 7.6 3.4 100.0 12.1 57.7 5.9 12.4 12.0 100.0

7 Bijapur 40.9 35.9 13.1 10.1 100.0 8.4 66.2 7.5 9.0 8.9 100.0

8 Chamarajanagar 43.8 40.2 8.2 7.9 100.0 10.4 61.7 9.4 10.2 8.1 100.0

9 ChikBallapur a

10 Chikmagalur 31.4 47.3 15.4 5.9 100.0 7.3 64.2 6.4 12.0 10.0 100.0

11 Chitradurga 54.7 32.9 8.0 4.4 100.0 11.0 53.6 8.9 17.7 8.8 100.0

12 Dakshina Kannada 26.9 39.7 25.0 8.4 100.0 6.7 55.3 11.6 14.0 12.4 100.0

13 Davanagere 51.2 33.5 9.0 6.3 100.0 8.4 50.9 7.7 19.1 13.9 100.0

14 Dharwad 39.1 45.4 10.7 4.8 100.0 8.2 55.4 10.5 13.5 12.3 100.0

15 Gadag 37.9 42.7 11.4 7.9 100.0 9.4 55.6 9.3 14.5 11.2 100.0

16 Gulabarga 47.8 35.7 10.7 5.9 100.0 13.6 57.2 6.6 12.9 9.6 100.0

57

INCOME EXPENDITURE Sl. No.

District Central Grants

State Grants

Own Revenue

Others Total Establishment

Developmental work

Electricity

Non-Develop

ment

Other Expenditure

TOTAL

17 Hassan 30.4 46.6 15.7 7.3 100.0 12.8 48.3 10.4 15.3 13.2 100.0

18 Haveri 32.6 43.1 17.3 7.0 100.0 11.2 48.4 10.5 16.9 13.1 100.0

19 Kodagu 30.8 38.7 21.9 8.6 100.0 7.1 60.9 11.0 10.1 10.9 100.0

20 Kolar 37.3 43.4 11.4 7.8 100.0 10.9 55.5 7.7 15.1 10.8 100.0

21 Koppal 38.5 40.9 13.3 7.4 100.0 12.1 52.8 7.5 13.2 14.4 100.0

22 Mandya 24.8 48.0 18.3 8.9 100.0 15.0 38.0 9.2 19.6 18.2 100.0

23 Mysore 25.5 41.9 22.4 10.2 100.0 13.9 40.1 13.1 16.9 16.0 100.0

24 Raichur 45.7 42.3 8.3 3.6 100.0 12.5 52.3 9.6 14.4 11.3 100.0

25 Ramanagaram 24.6 44.3 22.9 8.2 100.0 11.9 46.4 6.0 14.7 21.0 100.0

26 Shimoga 34.7 45.0 11.6 8.7 100.0 5.9 65.0 5.6 10.8 12.7 100.0

27 Tumkur 32.6 43.8 16.9 6.6 100.0 12.4 45.5 8.7 17.6 15.8 100.0

28 Udupi 25.9 40.6 25.6 7.9 100.0 7.7 52.5 10.6 15.1 14.1 100.0

29 Uttara Kannada 37.6 47.1 9.1 6.1 100.0 5.9 66.0 10.6 9.9 7.5 100.0

KARNATAKA 35.8 40.6 16.5 7.1 100.0 10.0 54.7 8.6 14.3 12.4 100.0

Source: Data collected by Third State Finance Commission Note: a : Data not furnished

58

Appendix - 5.2 Composition of Income and Expenditure of GPs in Karnataka (District & Talukwise)

District Taluk % of CG

% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Bagalkot Badami 38.45 43.00 13.89 4.67 100.00 8.92 56.93 12.29 13.30 8.56 100.00 Bagalkot Bagalkot 32.61 44.59 17.32 5.48 100.00 9.04 61.08 9.12 8.56 12.20 100.00 Bagalkot Bilgi 43.59 36.09 14.66 5.67 100.00 7.91 59.50 6.19 14.15 12.26 100.00 Bagalkot Hungund 36.20 42.65 16.82 4.33 100.00 9.18 57.42 13.47 10.07 9.86 100.00 Bagalkot Jamkhandi 36.46 48.47 11.90 3.17 100.00 6.51 74.87 5.75 8.71 4.15 100.00 Bagalkot Mudhol 37.08 41.21 13.90 7.82 100.00 5.61 60.75 3.87 18.58 11.19 100.00 Bagalkot Total 37.05 43.42 14.55 4.98 100.00 7.75 62.39 8.49 12.15 9.22 100.00 Bangalore Rural Devanahalli 20.43 32.42 42.74 4.40 100.00 8.40 40.35 6.70 26.22 18.33 100.00 Bangalore Rural Dod Ballapur 21.54 29.38 38.46 10.62 100.00 10.45 46.60 6.84 20.38 15.75 100.00 Bangalore Rural Hosakote 25.24 34.80 26.77 13.19 100.00 11.38 47.34 7.37 15.21 18.70 100.00 Bangalore Rural Nelamangala 20.05 27.31 44.64 8.00 100.00 11.12 55.11 4.95 7.38 21.44 100.00 Bangalore Rural Total 21.72 30.86 38.44 8.99 100.00 10.25 47.00 6.49 17.91 18.35 100.00 Bangalore Urban Anekal 23.41 23.53 49.05 4.01 100.00 7.86 72.28 3.50 8.21 8.15 100.00 Bangalore Urban Bangalore North 16.71 19.71 52.14 11.44 100.00 7.72 54.60 9.54 13.04 15.09 100.00 Bangalore Urban Bangalore South 17.57 15.88 59.60 6.95 100.00 7.69 52.81 6.19 16.88 16.43 100.00 Bangalore Urban Total 19.42 19.94 53.28 7.35 100.00 7.76 60.47 6.31 12.47 12.98 100.00 Belgaum Athni 34.16 40.26 19.43 6.15 100.00 7.59 59.14 6.41 15.64 11.23 100.00 Belgaum Belgaum 27.24 40.96 24.49 7.32 100.00 8.98 56.26 10.16 12.30 12.30 100.00 Belgaum Chikodi 26.59 35.12 21.04 17.26 100.00 16.20 28.70 13.54 21.43 20.13 100.00 Belgaum Gokak 31.17 44.61 17.84 6.38 100.00 10.45 41.95 16.28 18.81 12.52 100.00 Belgaum Hukeri 23.88 52.34 19.50 4.28 100.00 10.05 49.33 15.26 15.10 10.25 100.00 Belgaum Khanapur 22.56 53.16 17.44 6.83 100.00 9.45 54.18 7.84 18.16 10.36 100.00 Belgaum Savadatti 24.84 47.90 17.41 9.86 100.00 11.25 38.19 14.96 21.83 13.78 100.00 Belgaum Ramdurg 25.98 46.16 22.30 5.56 100.00 14.03 36.91 13.63 14.55 20.88 100.00

59


% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Belgaum Raybag 38.28 40.85 11.94 8.92 100.00 9.20 58.31 8.38 13.66 10.44 100.00 Belgaum Bailhongal 26.65 50.73 17.76 4.87 100.00 8.64 56.87 9.67 19.34 5.48 100.00 Belgaum Total 28.38 44.70 19.03 7.89 100.00 10.62 47.99 11.50 17.23 12.67 100.00 Bellary Bellary 42.18 41.09 14.37 2.36 100.00 9.84 59.45 5.99 10.06 14.67 100.00 Bellary Hadagalli 37.11 45.28 9.59 8.02 100.00 4.82 55.81 4.63 16.00 18.73 100.00 Bellary Hagaribommanahalli 38.28 42.31 10.61 8.80 100.00 8.43 57.07 6.86 17.90 9.74 100.00 Bellary Hospet 48.41 35.34 11.50 4.75 100.00 7.81 71.21 4.47 9.46 7.05 100.00 Bellary Kudligi 34.85 36.98 10.42 17.76 100.00 6.80 70.25 8.42 6.08 8.45 100.00 Bellary Sandur 50.67 27.45 16.53 5.35 100.00 7.89 68.07 7.37 8.95 7.71 100.00 Bellary Siruguppa 56.44 35.65 4.74 3.17 100.00 5.51 77.04 3.58 6.33 7.54 100.00 Bellary Total 44.32 37.77 10.83 7.07 100.00 7.26 66.01 5.87 10.27 10.60 100.00 Bidar Aurad 55.44 35.93 5.02 3.61 100.00 11.82 67.91 6.53 10.04 3.69 100.00 Bidar Basavakalyan 48.60 40.48 8.16 2.76 100.00 9.25 55.87 5.00 14.27 15.61 100.00 Bidar Bhalki 44.35 42.72 10.09 2.84 100.00 16.20 48.39 3.32 14.47 17.62 100.00 Bidar Bidar 39.16 48.95 7.41 4.48 100.00 14.80 47.59 7.48 14.57 15.55 100.00 Bidar Homnabad 54.99 33.68 7.69 3.64 100.00 10.67 65.26 7.30 8.69 8.08 100.00 Bidar Total 49.16 39.83 7.60 3.41 100.00 12.08 57.66 5.92 12.39 11.95 100.00 Bijapur Basavana Bagevadi 37.11 38.75 16.05 8.08 100.00 8.32 62.34 8.17 11.17 10.02 100.00 Bijapur Bijapur 54.25 27.54 14.03 4.18 100.00 7.72 69.71 5.81 8.95 7.81 100.00 Bijapur Indi 32.26 38.04 11.27 18.43 100.00 6.00 69.39 7.13 6.15 11.32 100.00 Bijapur Muddebihal 37.31 45.23 10.57 6.89 100.00 6.80 66.92 7.43 11.10 7.76 100.00 Bijapur Sindgi 40.09 33.87 13.96 12.08 100.00 14.03 60.44 9.50 8.60 7.43 100.00 Bijapur Total 40.88 35.90 13.13 10.08 100.00 8.39 66.18 7.46 9.01 8.94 100.00 Chamarajanagar Chamarajanagar 44.61 40.59 7.01 7.79 100.00 9.34 60.57 10.19 11.65 8.25 100.00 Chamarajanagar Gundlupet 32.72 43.47 8.93 14.88 100.00 13.26 56.06 8.49 10.15 12.05 100.00 Chamarajanagar Kollegal 54.85 34.41 9.22 1.52 100.00 9.54 65.55 9.75 9.62 5.55 100.00 Chamarajanagar Yelandur 35.63 48.70 7.26 8.41 100.00 10.53 73.51 7.05 4.69 4.22 100.00

60


% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Chamarajanagar Total 43.77 40.15 8.15 7.92 100.00 10.42 61.74 9.44 10.25 8.15 100.00 Chikmagalur Chikmagalur 34.74 43.47 14.40 7.38 100.00 7.54 57.80 5.99 18.91 9.76 100.00 Chikmagalur Kadur 26.96 51.11 13.92 8.00 100.00 8.60 58.98 7.89 11.52 13.01 100.00 Chikmagalur Koppa 28.41 51.11 16.64 3.84 100.00 5.17 74.07 7.41 6.82 6.54 100.00 Chikmagalur Mudigere 30.77 53.52 12.56 3.15 100.00 4.69 71.30 6.49 7.28 10.24 100.00 Chikmagalur Narasimharajapura 25.69 37.47 29.80 7.05 100.00 7.23 62.71 5.64 18.15 6.28 100.00 Chikmagalur Sringeri 31.08 51.67 11.61 5.64 100.00 5.08 73.24 8.66 6.88 6.14 100.00 Chikmagalur Tarikere 36.48 41.86 16.13 5.52 100.00 9.51 64.18 4.69 11.19 10.43 100.00 Chikmagalur Total 31.43 47.25 15.41 5.90 100.00 7.34 64.22 6.44 12.02 9.98 100.00 Chitradurga Challakere 53.11 33.21 8.18 5.50 100.00 12.32 48.87 8.90 21.71 8.19 100.00 Chitradurga Chitradurga 57.16 29.12 9.10 4.62 100.00 7.83 63.53 7.42 13.76 7.46 100.00 Chitradurga Hiriyur 49.35 36.01 9.46 5.18 100.00 14.94 45.22 10.88 16.05 12.91 100.00 Chitradurga Holalkere 57.06 33.08 6.98 2.88 100.00 11.87 54.51 10.00 15.99 7.63 100.00 Chitradurga Hosdurga 54.94 33.89 7.21 3.97 100.00 10.53 52.80 7.86 19.34 9.47 100.00 Chitradurga Molakalmuru 55.72 32.39 7.31 4.59 100.00 8.68 56.11 9.04 18.38 7.78 100.00

Chitradurga Total 54.71 32.86 8.01 4.42 100.00 11.01 53.59 8.86 17.74 8.79 100.00 Dakshina Kannada Bantval 26.77 44.37 21.41 7.44 100.00 5.03 58.78 10.32 15.72 10.15 100.00 Dakshina Kannada Beltangadi 27.94 42.31 20.69 9.06 100.00 6.14 57.21 13.61 12.38 10.65 100.00 Dakshina Kannada Mangalore 25.55 33.31 34.82 6.32 100.00 7.90 46.42 15.02 16.84 13.80 100.00 Dakshina Kannada Puttur 31.84 35.85 22.76 9.55 100.00 7.26 56.31 8.74 11.14 16.54 100.00 Dakshina Kannada Sulya 21.60 46.26 20.77 11.37 100.00 7.16 64.41 7.20 11.54 9.69 100.00

Dakshina Kannada Total

26.93 39.66 25.04 8.37 100.00 6.71 55.26 11.60 14.01 12.41 100.00

Davanagere Channagiri 48.77 38.27 8.95 4.01 100.00 7.18 54.59 8.60 16.45 13.18 100.00 Davanagere Davanagere 58.29 30.86 7.48 3.37 100.00 8.14 60.25 7.39 13.30 10.91 100.00 Davanagere Harapanahalli 51.98 36.70 7.37 3.95 100.00 7.00 61.37 9.29 13.32 9.02 100.00 Davanagere Harihar 38.74 25.12 11.99 24.15 100.00 10.88 26.27 4.62 34.17 24.05 100.00 Davanagere Honnali 44.55 36.90 12.55 6.00 100.00 8.22 51.63 9.67 18.65 11.82 100.00

61


% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Davanagere Jagalur 61.00 26.47 7.04 5.49 100.00 9.81 49.92 6.73 18.96 14.58 100.00 Davanagere Total 51.20 33.49 9.03 6.27 100.00 8.43 50.86 7.71 19.06 13.94 100.00 Dharwad Dharwad 35.40 53.73 8.14 2.72 100.00 7.34 58.80 9.38 12.53 11.94 100.00 Dharwad Hubli 35.91 38.76 18.76 6.57 100.00 7.86 49.47 10.28 15.52 16.87 100.00 Dharwad Kalghatgi 43.00 48.19 7.20 1.61 100.00 10.22 54.23 12.92 12.59 10.04 100.00 Dharwad Kundgol 39.15 40.10 11.23 9.53 100.00 10.04 48.69 11.03 17.81 12.42 100.00 Dharwad Navalgund 43.94 37.87 11.27 6.92 100.00 6.73 61.23 9.61 11.40 11.03 100.00 Dharwad Total 39.08 45.39 10.72 4.81 100.00 8.25 55.40 10.51 13.54 12.30 100.00 Gadag Gadag 38.91 42.50 12.52 6.07 100.00 7.55 57.45 9.48 11.36 14.15 100.00 Gadag Mundargi 36.35 45.08 10.10 8.47 100.00 11.02 53.24 8.37 16.62 10.75 100.00 Gadag Nargund 29.59 47.08 12.99 10.34 100.00 6.52 56.13 6.08 19.03 12.24 100.00 Gadag Ron 37.19 43.77 10.89 8.14 100.00 10.66 55.78 8.11 15.34 10.11 100.00 Gadag Shirhatti 45.06 36.53 10.07 8.34 100.00 11.42 53.51 13.58 14.03 7.45 100.00 Gadag Total 37.93 42.74 11.43 7.91 100.00 9.38 55.64 9.25 14.53 11.19 100.00 Gulabarga Afzalpur 44.29 39.65 12.62 3.44 100.00 9.24 71.48 6.31 10.99 1.99 100.00 Gulabarga Aland 52.71 30.72 9.92 6.65 100.00 11.52 57.15 3.41 20.18 7.73 100.00 Gulabarga Chincholi 43.34 38.90 12.49 5.28 100.00 18.00 54.71 7.02 11.04 9.24 100.00 Gulabarga Chitapur 55.44 29.76 9.44 5.36 100.00 12.53 58.43 7.42 15.41 6.21 100.00 Gulabarga Gulbarga 50.89 31.42 12.44 5.24 100.00 11.67 61.14 4.36 13.80 9.03 100.00 Gulabarga Jevargi 36.01 44.11 11.43 8.46 100.00 14.29 49.83 11.57 11.20 13.11 100.00 Gulabarga Sedam 49.51 33.07 13.42 4.00 100.00 10.32 51.55 7.43 19.25 11.45 100.00 Gulabarga Shahpur 48.78 39.64 8.44 3.13 100.00 12.84 47.94 5.03 7.89 26.30 100.00 Gulabarga Shorapur 43.61 42.25 10.35 3.79 100.00 15.60 55.95 5.52 10.81 12.11 100.00 Gulabarga Yadgir 47.14 32.66 8.89 11.31 100.00 16.90 59.58 8.86 7.73 6.92 100.00

Gulabarga Total 47.76 35.69 10.66 5.88 100.00 13.58 57.20 6.63 12.94 9.64 100.00 Hassan Alur 36.29 43.51 15.34 4.86 100.00 10.47 44.03 11.25 21.61 12.64 100.00 Hassan Arkalgud 29.13 41.92 17.54 11.41 100.00 16.08 40.86 10.41 15.82 16.83 100.00

62


% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Hassan Arsikere 33.87 50.01 13.71 2.40 100.00 12.75 46.57 7.54 21.01 12.13 100.00 Hassan Belur 25.49 50.22 11.68 12.61 100.00 13.13 56.34 11.62 10.62 8.28 100.00 Hassan Channarayapatna 33.04 42.34 15.95 8.67 100.00 12.27 48.37 10.13 16.06 13.17 100.00 Hassan Hassan 24.04 50.20 20.04 5.72 100.00 10.51 49.94 9.88 13.39 16.28 100.00 Hassan Hole Narsipur 33.15 42.69 17.33 6.84 100.00 13.74 45.33 13.75 12.79 14.39 100.00 Hassan Sakleshpur 35.82 45.44 12.85 5.90 100.00 14.41 52.38 11.81 11.23 10.17 100.00

Hassan Total 30.43 46.59 15.69 7.29 100.00 12.82 48.31 10.39 15.33 13.15 100.00 Haveri Byadgi 30.59 46.30 13.35 9.76 100.00 9.77 55.13 13.69 12.19 9.22 100.00 Haveri Hangal 25.00 44.09 21.62 9.29 100.00 12.80 42.40 10.89 18.05 15.86 100.00 Haveri Haveri 34.95 40.50 17.38 7.18 100.00 11.65 53.46 7.90 16.01 10.98 100.00 Haveri Hirekerur 36.00 43.93 16.04 4.03 100.00 11.65 49.64 10.48 18.98 9.25 100.00 Haveri Ranibennur 37.78 37.65 17.03 7.54 100.00 11.17 41.21 12.22 16.68 18.72 100.00 Haveri Savanur 35.69 46.65 14.24 3.41 100.00 9.85 49.68 11.72 17.91 10.84 100.00 Haveri Shiggaon 27.80 46.28 18.54 7.39 100.00 9.55 49.12 8.28 16.28 16.76 100.00 Haveri Total 32.58 43.13 17.28 7.00 100.00 11.17 48.39 10.46 16.85 13.12 100.00 Kodagu Madikeri 33.40 46.37 13.04 7.20 100.00 4.95 71.45 6.85 10.46 6.30 100.00 Kodagu Somvarpet 27.93 39.28 25.20 7.59 100.00 7.53 50.65 15.20 12.91 13.71 100.00 Kodagu Virajpet 32.30 33.99 23.23 10.47 100.00 7.65 65.92 8.77 7.29 10.37 100.00

Kodagu Total 30.78 38.69 21.89 8.64 100.00 7.11 60.87 10.97 10.11 10.95 100.00 Kolar Bangarapet 39.99 44.97 9.18 5.86 100.00 10.08 67.32 5.09 10.94 6.57 100.00 Kolar Kolar 33.91 38.74 16.01 11.33 100.00 11.06 57.35 3.76 13.91 13.92 100.00 Kolar Malur 33.96 46.66 14.38 5.00 100.00 12.75 46.17 6.63 23.23 11.22 100.00 Kolar Mulbagal 36.82 45.20 8.55 9.43 100.00 8.71 43.03 18.11 15.25 14.90 100.00 Kolar Srinivaspur 42.68 42.56 8.07 6.69 100.00 12.53 58.78 6.43 14.04 8.22 100.00

Kolar Total 37.34 43.44 11.44 7.78 100.00 10.90 55.50 7.67 15.12 10.80 100.00 Koppal Gangawati 37.35 32.04 20.00 10.61 100.00 12.73 48.72 7.30 15.88 15.38 100.00 Koppal Koppal 36.64 38.92 13.45 10.99 100.00 9.25 56.33 5.27 15.15 13.99 100.00

63


% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Koppal Kushtagi 42.70 40.80 11.85 4.65 100.00 11.22 51.57 5.06 12.12 20.02 100.00 Koppal Yelbarga 38.52 50.46 7.96 3.06 100.00 14.92 54.58 11.72 8.89 9.89 100.00 Koppal Total 38.50 40.89 13.25 7.36 100.00 12.08 52.85 7.49 13.15 14.44 100.00 Mandya Krishnarajpet 29.81 50.46 15.03 4.70 100.00 13.39 38.44 10.22 25.37 12.57 100.00 Mandya Maddur 24.51 46.89 19.98 8.61 100.00 13.05 40.96 7.32 22.34 16.33 100.00 Mandya Malavalli 25.91 51.07 14.26 8.76 100.00 15.45 37.18 11.42 12.07 23.88 100.00 Mandya Mandya 23.88 45.34 21.93 8.85 100.00 15.17 36.09 11.51 18.47 18.75 100.00 Mandya Nagamangala 23.75 51.91 14.60 9.73 100.00 17.49 34.72 7.85 20.35 19.58 100.00 Mandya Pandavapura 23.60 49.07 20.51 6.82 100.00 14.54 42.70 5.63 18.06 19.07 100.00 Mandya Shrirangapattana 21.74 42.06 19.60 16.60 100.00 17.38 34.16 9.51 22.17 16.78 100.00 Mandya Total 24.79 48.00 18.31 8.89 100.00 14.98 38.00 9.15 19.62 18.25 100.00 Mysore Heggadadevankote 25.87 49.73 15.92 8.49 100.00 12.46 42.07 13.02 14.34 18.11 100.00 Mysore Hunsur 31.29 40.17 15.81 12.73 100.00 13.11 42.85 13.25 11.45 19.34 100.00 Mysore Krishnarajanagara 24.57 43.17 21.26 11.00 100.00 15.79 34.98 16.39 20.26 12.58 100.00 Mysore Mysore 17.32 31.56 40.11 11.01 100.00 15.97 38.27 10.84 17.04 17.89 100.00 Mysore Nanjangud 25.25 51.31 16.77 6.67 100.00 12.67 44.22 12.44 19.26 11.40 100.00 Mysore Piriyapatna 17.71 41.56 25.67 15.07 100.00 15.84 30.42 19.06 18.74 15.95 100.00 Mysore T.Narsipur 36.60 39.35 16.04 8.01 100.00 11.04 46.06 8.91 17.39 16.60 100.00

Mysore Total 25.54 41.85 22.38 10.22 100.00 13.87 40.09 13.08 16.93 16.03 100.00 Raichur Devadurga 39.34 50.14 6.55 3.97 100.00 12.31 56.90 9.91 13.32 7.56 100.00 Raichur Lingsugur 47.89 37.43 11.61 3.07 100.00 12.53 48.61 8.65 14.19 16.02 100.00 Raichur Manvi 50.07 39.80 7.17 2.96 100.00 13.59 53.19 8.45 12.14 12.63 100.00 Raichur Raichur 45.91 41.35 6.83 5.91 100.00 14.15 50.07 8.51 16.02 11.25 100.00 Raichur Sindhnur 42.83 45.17 8.88 3.12 100.00 10.18 52.93 12.17 16.56 8.16 100.00

Raichur Total 45.68 42.34 8.35 3.63 100.00 12.45 52.33 9.60 14.36 11.25 100.00 Ramanagaram Channapatna 29.18 42.92 20.97 6.93 100.00 13.48 49.16 6.19 14.45 16.72 100.00 Ramanagaram Kanakapura 23.00 46.67 22.82 7.51 100.00 11.15 48.15 6.80 16.68 17.22 100.00

64


% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Ramanagaram Magadi 28.82 45.32 17.21 8.65 100.00 13.05 43.58 7.66 14.11 21.61 100.00 Ramanagaram Ramanagaram 19.99 40.69 29.33 9.99 100.00 10.10 43.77 2.88 12.84 30.42 100.00 Ramanagaram Total 24.61 44.28 22.89 8.22 100.00 11.87 46.40 5.98 14.75 21.00 100.00 Shimoga Bhadravati 33.47 39.20 16.63 10.69 100.00 7.82 61.72 5.21 10.80 14.46 100.00 Shimoga Hosanagara 28.28 53.30 8.41 10.01 100.00 5.30 73.94 6.60 7.10 7.06 100.00 Shimoga Sagar 45.48 37.16 11.33 6.03 100.00 4.75 63.89 7.74 13.65 9.97 100.00 Shimoga Shikarpur 33.61 48.82 8.82 8.75 100.00 5.41 67.86 3.33 11.03 12.36 100.00 Shimoga Shimoga 38.45 39.29 13.72 8.54 100.00 5.40 54.60 6.97 11.51 21.53 100.00 Shimoga Sorab 36.64 48.39 10.29 4.69 100.00 6.75 67.39 5.54 9.39 10.93 100.00 Shimoga Tirthahalli 28.55 48.92 11.02 11.52 100.00 5.40 70.13 4.35 11.98 8.13 100.00 Shimoga Total 34.72 44.97 11.62 8.68 100.00 5.88 64.98 5.58 10.84 12.72 100.00 Tumkur Chiknayakanhalli 32.89 43.40 16.33 7.37 100.00 10.42 47.58 7.95 20.56 13.50 100.00 Tumkur Gubbi 32.74 40.48 19.60 7.18 100.00 9.70 41.51 8.32 24.23 16.24 100.00 Tumkur Koratagere 28.49 40.14 22.09 9.28 100.00 11.16 46.01 7.59 18.86 16.38 100.00 Tumkur Kunigal 32.96 46.40 12.78 7.86 100.00 12.94 46.49 10.54 10.67 19.35 100.00 Tumkur Madhugiri 34.14 43.02 15.53 7.30 100.00 11.63 46.46 5.70 19.69 16.53 100.00 Tumkur Pavagada 29.46 53.79 13.68 3.08 100.00 16.70 48.62 5.83 14.75 14.10 100.00 Tumkur Sira 40.29 37.31 16.45 5.95 100.00 12.85 42.95 12.39 15.06 16.75 100.00 Tumkur Tiptur 26.36 50.10 14.88 8.66 100.00 11.17 46.82 7.64 17.92 16.45 100.00 Tumkur Tumkur 31.89 41.88 20.93 5.30 100.00 11.91 47.34 11.22 11.98 17.55 100.00 Tumkur Turuvekere 33.76 44.72 16.47 5.04 100.00 15.78 40.72 8.40 26.18 8.93 100.00

Tumkur Total 32.63 43.84 16.95 6.58 100.00 12.38 45.53 8.69 17.58 15.83 100.00 Udupi Karkala 28.04 45.21 23.38 3.37 100.00 5.15 53.95 12.30 16.02 12.58 100.00 Udupi Kundapura 25.94 45.04 18.32 10.71 100.00 6.92 56.52 7.75 14.62 14.18 100.00 Udupi Udupi 24.71 33.79 33.65 7.85 100.00 9.81 47.94 12.34 15.12 14.79 100.00 Udupi Total 25.92 40.57 25.59 7.92 100.00 7.73 52.48 10.59 15.12 14.09 100.00 Uttara Kannada Ankola 29.51 56.35 12.18 1.97 100.00 5.51 63.12 10.88 11.60 8.89 100.00

65


% of SG

% of OWN

% of Others Total

% of EST

% of DEV

% of ELEC

% of NON-DEV

% of OE TOTAL

Uttara Kannada Bhatkal 50.60 29.31 11.05 9.05 100.00 4.45 70.65 11.91 6.28 6.71 100.00 Uttara Kannada Haliyal 44.64 38.43 8.43 8.49 100.00 6.36 52.69 13.25 17.52 10.17 100.00 Uttara Kannada Honavar 40.32 41.84 10.79 7.05 100.00 4.35 68.85 9.31 8.79 8.70 100.00 Uttara Kannada Karwar 30.21 55.90 10.23 3.65 100.00 10.57 47.50 19.08 8.79 14.06 100.00 Uttara Kannada Kumta 25.45 52.03 7.03 15.49 100.00 3.96 68.08 9.13 10.65 8.18 100.00 Uttara Kannada Mundgod 44.37 43.37 7.21 5.05 100.00 8.98 61.95 10.31 11.36 7.39 100.00 Uttara Kannada Siddapur 39.40 53.05 5.59 1.96 100.00 5.36 75.75 7.50 6.71 4.69 100.00 Uttara Kannada Sirsi 36.96 49.68 10.11 3.25 100.00 4.70 71.27 9.57 9.36 5.11 100.00 Uttara Kannada Supa 23.01 65.85 7.80 3.34 100.00 11.52 66.70 9.56 8.00 4.22 100.00 Uttara Kannada Yellapur 36.85 50.83 9.49 2.83 100.00 5.64 73.68 9.02 7.73 3.93 100.00 Uttara Kannada Total 37.63 47.15 9.12 6.09 100.00 5.94 66.03 10.60 9.90 7.54 100.00 Grand Total 35.81 40.63 16.46 7.10 100.00 9.96 54.73 8.62 14.28 12.42 100.00

66

Appendix - 5.3 Districtwise and yearwise no. of GPs included and mean of Demand and Collection

Sl. No.

District Demand 2001-02

Collection 2001-02

Demand 2002-03

Collection 2002-03

Demand 2003-04

Collection 2003-04

Demand 2004-05

Collection 2004-05

Demand 2005-06

Collection 2005-06

Demand 2006-07

Collection 2006-07

1 Bagalkot N 163 163 163 163 163 162 163 163 163 162 163 163

Mean 180681 92652 220070 100877 299668 115541 574636 233039 664774 234653 743005 216357 2 Bangalore Rural N 217 218 217 219 216 219 218 219 219 218 215 216 Mean 208433 134779 228731 151426 346218 199836 694914 418708 785710 568884 937234 648469

3 Bangalore Urban N 83 83 84 84 84 84 84 84 84 84 84 84 Mean 525380 448541 687729 542861 1072194 725552 2110655 1271416 2667341 1752043 2946774 2119124

4 Belgaum N 471 471 472 472 472 472 473 472 472 472 462 461 Mean 163152 89420 191574 94099 222811 114104 487711 179651 573485 220106 674106 314085

5 Bellary N 179 179 178 179 179 179 178 178 178 178 177 176 Mean 248893 104187 265293 112977 333155 128761 554929 209001 558394 223131 637667 249127

6 Bidar N 172 172 172 172 172 172 172 172 172 172 172 172 Mean 135988 41472 167608 50867 206445 54192 385717 82053 552842 86149 722379 94586

7 Bijapur N 198 198 198 198 198 198 198 198 198 198 198 198 Mean 382686 112215 384514 133066 446133 121678 647127 189994 802070 162417 929279 179514

8 Chamarajanagar N 113 113 113 113 113 113 113 113 113 113 113 113 Mean 130293 59539 146129 60945 178207 74708 286658 110476 432780 120596 474864 128127

9 Chikmaglur N 224 224 224 224 224 224 224 224 223 223 223 219 Mean 94135 53321 113232 59174 120557 65145 367025 115875 317614 154940 311098 171530

10 Chitradurga N 184 184 184 184 184 184 185 185 184 184 185 183 Mean 168313 70612 190753 100067 276115 110861 377263 150718 522792 164202 550799 130489

11 Dakshina Kannada

N 201 201 201 201 201 201 201 201 201 201 201 174

Mean 196893 174238 212208 172187 241180 205597 272965 230813 314586 270644 378199 337587 12 Davanagere N 230 230 230 230 230 230 230 230 229 230 230 230

Mean 167056 68739 206261 78917 230949 82764 367066 142058 420115 162152 499574 159590 13 Dharwad N 127 127 127 127 127 127 127 127 127 127 127 126

Mean 156654 60273 194380 70500 200223 82447 273644 111225 358079 132204 393389 158808 14 Gadag N 103 103 103 103 103 103 103 103 103 103 103 103

Mean 191996 74359 238270 85887 266821 79436 397681 154363 509312 150235 587304 181409

67

Sl. No.

District Demand 2001-02

Collection 2001-02

Demand 2002-03

Collection 2002-03

Demand 2003-04

Collection 2003-04

Demand 2004-05

Collection 2004-05

Demand 2005-06

Collection 2005-06

Demand 2006-07

Collection 2006-07

15 Gulbarga N 309 309 311 312 312 313 313 312 314 313 311 309 Mean 207642 71819 217522 90188 279165 95164 399944 132387 545563 141245 641434 158312

16 Hassan N 258 258 258 258 258 258 258 258 258 258 258 258 Mean 136497 78270 156980 78974 187912 97386 271089 140479 379798 195068 403955 234115

17 Haveri N 198 198 198 198 198 198 198 198 197 197 197 197 Mean 187391 56543 202645 65953 248355 82119 450243 132522 623655 159169 711646 203703

18 Kodagu N 98 98 98 98 98 98 98 98 98 98 98 98 Mean 251310 173088 275839 182220 299133 193984 400526 231454 501607 305399 465434 313819

19 Kolar N 129 128 129 129 129 129 129 129 129 129 128 128 Mean 131025 71831 151362 76533 187768 104454 294000 175897 372550 182398 511014 216030

20 Koppal N 132 132 133 133 133 133 133 133 133 133 133 133 Mean 265617 112067 354424 137762 368472 135424 465482 175948 649787 176977 763633 231683

21 Mandya N 229 228 229 229 229 229 229 229 229 229 228 227 Mean 131482 122452 139684 114370 160771 146856 280685 180979 340130 225583 417170 239366

22 Mysore N 236 236 236 236 236 236 236 236 236 236 236 236 Mean 200353 118059 226118 121695 264942 145044 348055 208117 503496 248753 538951 257835

23 Raichur N 156 156 156 156 157 157 156 157 157 157 156 157 Mean 138919 56997 151617 61480 186912 67569 293630 190163 378696 91327 436417 94799

24 Shimoga N 260 260 260 260 260 260 260 260 260 260 259 259 Mean 104262 49830 123923 55753 138310 60938 282633 103665 278100 154528 314975 155348

25 Tumkur N 318 318 318 318 318 318 318 318 319 319 319 318 Mean 141378 85195 162890 118085 211888 116233 378298 184798 436126 201665 516752 245693

26 Udupi N 146 146 146 146 146 146 146 146 146 146 144 145 Mean 180579 149926 202084 166477 227754 196945 306401 233674 437332 289571 442182 364176

27 Uttara Kannada N 205 205 205 204 204 204 204 204 204 204 204 204 Mean 54810 42600 63913 47480 79950 57604 119071 107771 141960 104020 148308 110626 Total N 5339 5338 5343 5346 5344 5347 5347 5347 5346 5344 5324 5287 Mean 177018 96154 202092 105166 247695 121496 415969 190840 512152 224127 585317 258433 Excluded 111 112 107 104 106 103 103 103 104 106 126 163 Total 5450 5450 5450 5450 5450 5450 5450 5450 5450 5450 5450 5450

N: No. of GPs included; Mean (in Rs.)

68

Appendix – 5.4 District-wise Trends in Collection of Own Revenue vis a vis Demand

Diagram 5.8: T rends in Own Revenue Demand and Collection of GPs-Bangalore Urban

01000000200000030000004000000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.9: Trends in Own Revenue Demand and Collection of GPs-Belgaum

0

200000

400000

600000

800000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

YearR

upee

s

Demand Collection

Diagram 5.7: Trends in Own Revenue Demand and Collection of GPs-Bangalore Rural

0

200000

400000

600000

800000

1000000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Year

Rup

ees

Demand Collection

Diagram 5.6: Trends in Own Revenue Demand and Collection of GPs-Bagalkot

0

200000

400000

600000

800000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Year

Rup

ees

Demand Collection

69

Diagram 5.10: T rends in Own Revenue Demand and Collection of GPs-Bellary

0200000

400000600000800000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.11: T rends in Own Revenue Demand and Collection of GPs-Bidar

0200000400000600000

800000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.12: T rends in Own Revenue Demand and Collection of GPs-Bijapur

0200000400000600000800000

1000000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.13: Trends in Own Revenue Demand and Collection of GPs-Chamarajanagar

0100000200000300000400000500000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

70

Diagram 5.14: T rends in Own Revenue Demand and Collection of GPs-Chikmagalur

0100000

200000300000

400000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.15: T rends in Own Revenue Demand and Collection of GPs-Chitradurga

0100000200000300000400000500000600000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.16: Trends in Own Revenue Demand and Collection of GPs-Dakshina Kannada

0

100000

200000

300000

400000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.17: Trends in Own Revenue Demand and Collection of GPs-Davanagere

0100000200000300000400000500000600000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

71

Diagram 5.18: T rends in Own Revenue Demand and Collection of GPs-Dharwad

0100000200000300000400000500000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.19: Trends in Own Revenue Demand and Collection of GPs-Gadag

0

200000

400000

600000

800000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.20: Trends in Own Revenue Demand and Collection of GPs-Gulbarga

0

200000

400000

600000

800000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.21: Trends in Own Revenue Demand and Collection of GPs-Hassan

0100000200000300000400000500000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

72

Diagram 5.22: T rends in Own Revenue Demand and Collection of GPs-Haveri

0

200000

400000

600000

800000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.23: T rends in Own Revenue Demand and Collection of GPs-Kodagu

0100000200000300000400000500000600000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.24: T rends in Own Revenue Demand and Collection of GPs-Kolar

0100000200000300000400000500000600000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.25: Trends in Own Revenue Demand and Collection of GPs-Koppal

0200000400000600000800000

1000000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

YearR

upee

s

Demand Collection

73

Diagram 5.26: Trends in Own Revenue Demand and Collection of GPs-Mandya

0100000200000300000400000500000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.27: Trends in Own Revenue Demand and Collection of GPs-Mysore

0100000200000300000400000500000600000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.28: T rends in Own Revenue Demand and Collection of GPs-Raichur

0100000200000300000

400000500000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.29: Trends in Own Revenue Demand and Collection of GPs-Shimoga

050000

100000150000200000250000300000350000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

YearR

upee

s

Demand Collection

74

Diagram 5.30: T rends in Own Revenue Demand and Collection of GPs-Tumkur

0100000200000300000400000500000600000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.31: T rends in Own Revenue Demand and Collection of GPs-Udupi

0100000200000300000400000500000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

Diagram 5.32: T rends in Own Revenue Demand and Collection of GPs-Uttar Kannada

0

50000

100000

150000

200000

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Year

Rup

ees

Demand Collection

CHAPTER – 6

General Problems of Grama Panchayats

6.1 The GPs have to perform functions as envisaged in section 58 of

Karnataka Panchayat Raj Act, 1993. Article 40 of the Constitution

envisages that “the States shall take steps to organize village panchayats

and endow them with such powers and authority that may be necessary to

enable them to function as units of self government”. The GPs face some

problems while performing the functions assigned to them.

6.2 Funds are being released to GPs under various schemes. In addition

to this government is providing rupees six lakhs as statutory grants. GPs

also mobilise their own revenue by levying taxes, rates, fees et cetra.

6.3 TSFC has toured in the districts and held consultation meetings to

capture the views expressed by elected representatives and officials of PRIs.

In addition to this, TSFC had sent questionnaire to all the GPs and

obtained information which has been analysed and discussed in a separate

chapter.

6.4 The main observations made by TSFC are summarized below;

1. Property taxes are not being levied as per rules and not revised

regularly.

2. GPs have powers to levy tax on buildings and vacant sites. But, this is

not being properly done due to lack of awareness and for want of

suitable training to staff and elected representatives of GPs. State

Government and higher level PRIs should supervise this job.

3. Tax collection by the GPs in Bidar, Gulbarga, Raichur and other

districts is very low. Whereas, it is more in Dakshina Kannada, Udupi


C H A P T E R - 6

and other districts. Socio-cultural conditions prevailing in these

districts influence the pattern of tax collection. Literacy, people’s

participation, social obligation and economic conditions prevalent

mainly decide the tax mobilization efficiency. Tax collection is low in

areas affected by drought and also in backward areas. Inspite of this,

it is necessary that the elected representatives and officials give

attention for tax collection. If required, amendments to the Act may

be proposed to make tax collection more effective. Otherwise, it would

be very difficult for the GPs to provide basic facilities to the citizens.

4. GPs implement a few important schemes of state and central

governments. National Rural Employment Guarantee Scheme,

Ashraya Housing Scheme, Drinking Water Supply Scheme, Sanitation

Scheme are some of the major programees implemented by the GPs.

While implementing these schemes wider coverage is not visible in

most of the GPs. On the other hand, the funds received are

distributed among elected representatives to take up developmental

works in their respective constituencies. This will lead into improper

completion of schemes and outcome will not be as expected.

6.5 Hence, it is necessary that schemes are formulated with a wider scope

keeping in mind that public should get the benefits. In this regard, the pilot

project taken up by Abdul Nazeer Sab State Institute for Rural

Development in the districts of Raichur and Gulbarga is praiseworthy as

schemes have been formulated with the involvement of elected

representatives. Government should take note of this to extend the project

to all the PRIs which will result in proper utilization of funds.

Salary Protection of GP Staff

6.6 Since many years, more than 40,000 employees like clerks, bill

collectors, dalayaths et cetra are working in GPs. They are being paid a


C H A P T E R - 6 consolidated salary or daily wages. GPs are finding it difficult to make

payments to their employees in view of low tax collection and funds received

from state government are scheme bound. These employees have not been

paid salaries for many months. TSFC has taken serious note of this fact. It

is necessary that their salaries are protected. The salaries of employees

working in ULBs are already protected. As such, the salaries of employees

of GPs should also be protected. For this purpose TSFC recommends that

the Notification dated:24.4.2008 published in Karnataka Gazette by the

Labour Secretariat regarding minimum wages should be considered.

Transparency

6.7 GPs should be transparent while performing their functions. In

addition to their own revenue, the GPs also receive funds from state and

central governments and this is amounting to Rs.30-50 lakhs annually.

While implementing schemes and incurring expenditure the GPs are

required to follow certain procedures;

1. Decisions taken by the GPs should be made public. The decisions may

be related to finances or works, these should be announced at

different places in the GP area. Whenever works are taken up, the

information about that work should be displayed on a board at the

place of work. Public can verify, if they found any deviation in

execution of works, this can be brought to the notice of concerned

persons.

2. Normally information like this is provided in Grama Sabha. But,

public memory is very short, it cannot remember all these facts. Most

of the GPs are executing works on ‘Piece Work’ basis. Generally does

not follow tendering process as required by the Transparency Act.

Sometimes, benefit of exemption from Transparency Act is utilized

and works are implemented through departments or on piece work


C H A P T E R - 6

contract basis. There are complaints that contract of such works are

awarded to the relatives or those who are close to elected

representatives. It was also felt that followers of Adhyaksha and

members and people with political influence are being given

contracts. This is resulting in poor quality of work. These problems

are cropping up due to lack of transparency.

3. This problem can be addressed if a comprehensive list of works is

prepared and tenders are invited as per the requirement of

Transparency Act. It is necessary that verification of quality of works

is undertaken independently. It is difficult for the Executive Officer of

TP to supervise all the works of GPs of the taluk. As such Adhyaksha

and members of GPs should inspect the works regularly and attention

should be given to quality.

4. Shortage of technical staff is clearly visible in implementation of

works in GPs. Preparation of estimates, fixing time limits and

conducting check measurements are the duties of GPs and the

technical staff. In view of this, a method of cluster approach is

followed by posting either an Assistant Engineer or Junior Engineer

for 3-4 GPs. It is necessary that a task force consisting of taluk level

officers and technical staff be formulated for ensuring quality and for

check measurements.

5. It is noticed that a few schemes are implemented by the officers of ZP

and TP with out bringing the same to the notice of GPs. For example,

it is informed that GPs are ignored in the implementation of suvarna

grama yojane. It is also learnt that many schemes under State and

District sectors are being implemented without informing the GPs. It

is necessary that implementation of any scheme of government should

have the involvement of GPs and participation of people since

ultimately benefits flow to the people of that area.


C H A P T E R - 6 Knowledge and Training

6.8 Adhyaksha, members and staff of GPs should collectively work as per

Karnataka Panchayat Raj Act, 1993. There are instances where these

persons are discharging their duties without having adequate knowledge.

There are training programmes at different levels for officers and staff

regarding their duties and responsibilities. But, initially elected

representatives may not have knowledge of rules and regulations; it is

natural that mistakes are bound to happen. Hence, it is necessary that as

soon as Adhayaksha and members are elected, awareness about their duties

and responsibilities is created.

Accountability

6.9 It is necessary that elected representatives, officers and staff of GPs

keep the public informed about the functions performed by the Gram

Panchayat. They should also respond to the queries of the public. This is

not being done satisfactorily. As observed earlier, Grama Sabha has become

a mere formality without taking up detailed discussions on the subjects.

Hence, it is necessary that arrangement is made to clear the doubts of the

people in Grama Sabha and Ward Sabha. In addition to this, awareness

should be created among the public about the Right to Information Act.

People living in rural areas have very little knowledge about this Act. In all,

it is necessary that the administration of GPs should inculcate methods of

transparency and accountability.

6.10 Recommendations of TSFC

1. As per section 3a of the Karnataka Panchayat Raj Act, 1993, Ward

Sabha and Grama Sabha should be conducted once in six months and

its proceedings should be vediographed.

2. Government should formulate clear and special yardsticks to identify

the persons living below poverty line.


C H A P T E R - 6

3. The term of Adhyaksha and Upadhyaksha of GPs should be five

years.

4. Honorarium of Adhyaksha and Members should be enhanced.

5. The Power to Sanction financial assistance to deserving families for

performing last rights of a deceased person should be withdrawn from

Revenue Department and given to GPs.

6. Levy of tax and its collection should also be the responsibility of the

Adhayaksha of GP.

7. Proper rules should be framed for appointment of staff of GPs.

8. In case of misappropriation, the secretary should immediately inform

GP and the Executive Officer of TP.

9. As a supplement to transparency and responsibility, jamabandhi

should be held informing public and action taken on compliants

should be displayed on the notice board.

10. Suitable action should be taken for maintenance of accounts and

computerization.

11. Technical staff should be made available for executing works and they

should be held responsible for poor quality of work.

12. An ombudsman should be created to control illegal activities and

corruption.

13. Rules should be framed for participation of NGOs and SHGs in the

developmental works of GPs.

14. Secretary and Adhyaksha should be made responsible for delay in

implementation of development works and poor collection of taxes.

15. Action should be taken to integrate the works of different

departments related to Agriculture, Horticulture, Dairy and other

activities at the village level. A single window system should be

created.

16. It is necessary that a minimum of 5% of funds is earmarked to

encourage rural sports, youth development and folk arts.


CHAPTER – 7

Powers, Duties, Responsibilities and Problems of Taluk Panchayats

Constitution of Taluk Panchayat

7.1 The TPs have to perform functions as envisaged in section 145 of

Karnataka Panchayat Raj Act, 1993. In addition to the functions assigned

as per Schedule-II, the TPs are also given the responsibility related to

drinking water supply, supervision over functioning of all the GPs in the

taluk, providing adequate number of class rooms in primary schools,

sanitation and acquiring land for locating manure pits away from the

dwelling houses in the villages. Section 147 gives the general powers to TPs

to perform its functions. Schedule-II prescribes the functions of TPs, this

includes agriculture, soil conservation, minor irrigation, animal husbandry,

cottage industries, rural housing, drinking water, roads, education,

markets, women and child development, public distribution system,

libraries and others.

7.2 As envisaged in 73rd Constitutional Amendment, excluding north

eastern states having less than population of 20 lakhs, three tier panchayat

raj system is in force in all other states. In Karnataka there are 176 TPs.

7.3 As per section 120 of the Karnataka Panchayat Raj Act, 1993 TP is

constituted with the following members;

1. Elected members [a minimum of 11 members, one member for every

ten thousand population]

2. Members of Parliament and State Assembly whose constituencies lie

within the district.


C H A P T E R - 7

3. Members of State Legislative Council who are registered as electors

within the taluk.

4. One-fifth of Adhyakshas of the GPs in the taluk by rotation.

7.4 Provisions have been made for providing reservation for SCs, STs,

BCs and Women. Even though there is one-third reservation for women,

currently more than one-third women members are there in the TPs.

7.5 Functions assigned to TPs have been indicated in section 145 of

Karnataka Panchayat Raj Act, 1993. TPs have to perform its functions as

per Schedule-II. These functions have to be performed as per guidelines and

norms issued by the state government.

7.6 Functions of TPs

TP performs the functions specified in schedule-II

Provided that where the state or central governments provides funds

for the performance of any function specified in schedule-II, the TP shall

perform such functions in accordance with the guidelines and norms laid

down for performance of such function.

Not withstanding anything contrary contained in above, or schedule-

II, it is obligatory on the part of TP, in so far as TP fund at its disposal will

allow, to make reasonable provision within the area under its jurisdiction in

respect of the following matters;

1. Construction and augmentation of water supply works to the level

of not less than forty litres per capita per day.

2. Filing half yearly report regarding the activities of GPs within the

taluk regarding;

i. holding of Grama Sabha


C H A P T E R - 7

ii. maintenance of water supply works

iii. construction of individual and community latrine

iv. collection and revision of taxes, rates and fees

v. payment of electricity charges

vi. enrollment in schools

vii. progress of immunization

3. Providing adequate number of class rooms and maintaining

primary school buildings in proper condition including water

supply and sanitation.

4. acquiring land for locating manure pits away from the dwelling

houses in the villages

7.7 Powers and Duties of Adhyaksha

1. convene, preside at and conduct meetings of the TP

2. exercise supervision and control over the Executive Officer

3. exercise overall supervision and control over the financial and executive administration

4. have power to accord relief to those who are affected by the natural calamities

Staff

7.8 Section 155 of Karnataka Panchayat Raj Act, 1993 makes provision

for the staff of TP. Group-A officer of the state civil services is the Executive

Officer of the TP. The other staff of TP is provided by the state government

from time to time. Section 156 deals with the functions assigned to the

Executive Officer of the TP. He has complete control over the executive

administration of TP.


C H A P T E R - 7

7.9 General Problems of TP

1. In performing functions assigned to the TPs few difficulties have been

noticed. As many functions have been assigned to the three tiers of

PRIs, it is not clear as to which function has to be performed at what

level.

2. There is a general complaint regarding shortage of funds and

assignment of functions. There is no provision for the TPs to have

their own resources. In the three tier panchayat raj system, TP is also

an important tier. But, functions assigned and allocation of funds to

this tier is not according to the importance given to it. In view of this,

it is generally felt that TPs are being sidelined.

3. In the functions assigned to TPs confusion could be noticed. For

example, appointment of anganawadi workers is the function of TP,

but they do not have any role in the selection. Selection of inmates to

the hostels is the function of TP and Sarva Shikshana Abhiyan is to

be implemented through taluk committees. In these, there is no role

of TPs. Rural drinking water supply is the programme of TPs, but a

parallel taskforce exists. In these ways much confusion has been

created. It is felt that since the officials implementing the

programmes of TPs are on deputation, the TPs do not have control

over them. It is also heard that the powers of TPs have been curtailed

by issuing orders and guidelines to the deputed staff by the state

government.

4. Providing relief to the victims of natural calamities is one of the

programmes of TPs. But, Deputy Commissioners have been given this

responsibility and funds are directly released to them. It is learnt that

Adhyaksha of TPs have not been kept informed about the relief given

to the victims of natural calamities. Experts feel that this


C H A P T E R - 7

arrangement of state government is contrary to the concept of

decentralization.

5. It is felt that, the presence of MPs, MLAs and MLCs in TP meetings

is curtailing the importance of elected members of TP. The TP

members have expressed that they are unable to give attention and

have no powers to the works undertaken in their respective

constituencies. It appears that there is a lacuna in the assignment of

functions which is rather causing many problems.

6. Inadequate release of funds to the programmes assigned to TPs has

halted the implementation process. As TPs have not been given

powers to mobilise their own resources, they can not function

independently. It is complained that the officers of TP are

implementing schemes as per their wish and they are not caring to

bring it to the notice of elected representatives. Many experts feel

that all these issues have resulted in loss of importance of middle tier

of Panchayath Raj system i.e. Taluk Panchayat.

7. Earlier all works related to development of the taluk were

implemented by taluk level officers and extension officers of Block

Development office. Required funds were also provided promptly.

But, now it is said that as the TP programmes are indicative and

suggestive in nature, as such, it is difficult to function effectively.

8. Adhayaksha, Upadhayaksha and other elected members of TPs say

that, there is shortage of funds to work responsibly in their respective

jurisdiction. They have informed that, in respect of works related to

rural roads, drinking water facility and supervision of functions of

GPs, adequate funds and powers have not been given to them.


C H A P T E R - 7

9. It is being said that TPs do not have independent supervision over the

departments which come under TPs. The Executive Officer of TP is

finding it difficult to discharge duties as Assistant Executive Engineer

and others of engineering division are not under his control.

10. It is also being said that many Executive Officers of TPs are on

deputation from various departments. As such, it has become difficult

for them to understand the concept of various schemes.

7.10 The TSFC has seriously taken note of these issues. The government

should have posted officers of Rural Development Department or KAS

officers as Executive Officers of TPs. Since recruitment has not been done

from time to time for the posts of Rural Development Department, shortage

of officers for such responsible posts is clearly visible now. The deputation

of many officers from other departments to an important department like

Rural Development is a dangerous trend in the process of development.

Particularly, posting Executive Engineers, officers of Forest, Animal

Husbandry, Sericulture, Fisheries and other departments as TP Executive

Officers is a serious issue. These officers do not have the knowledge of

panchayat raj system and prerequisite training about rural development.

Their knowledge is confined to only works related to their parent

department. Such officers are being posted as Executive Officers of TPs.

Non-recruitment to vacant posts is the main reason for this situation.

7.11 Earlier, works related to agriculture, rural development, co-operation

et cetra were being done by the Extension Officers and they had the

knowledge of rural and community development. These posts are

discontinued and now the concerned district officers are performing these

functions. Perception about the concept of community development and

growth is not visible in them. In view of this, growth and speed of


C H A P T E R - 7

development is declining. As a result, the role of departments is limited to

customary implementation of few programmes only.

Grievance of TP Members

7.12 The members of TPs have also been elected from the constituencies

which comprise of many villages. But responsibility of implementing many

development programmes is outside their purview although those functions

were assigned to them. Digging of bore wells for mitigating drinking water

scarcity, development of roads, implementation of various programmes of

central and state governments are some of the programmes wherein TP

members have limited responsibility. This has led to a feeling in them that

the elected representatives of TPs are lower to GP members in terms of

power and grant quantum.

7.13 A GP member of Nanjangud taluk of Mysore district who was earlier

a member of TP has opted to become GP member as he feels that becoming

a TP member is of no use. There are many instances of such nature, TP

members feel that they are not doing useful service to their voters. As such,

these elected representatives of TP have expressed their unhappiness before

TSFC. They have sought more powers and grants for TPs or else to abolish

the TPs.

Necessity of more powers and grants to TP

7.14 It is necessary to give the following powers to TPs in addition to the

existing powers:

1. Supervision of drinking water supply schemes;

2. Minor Irrigation and water conservation schemes;

3. Sarva Shiksha Abhiyana Scheme

4. Area Development Programmes


C H A P T E R - 7

5. School, inter-village rural roads, bridges, Anganawadi building and

others

6. Proceeds of additional stamp duty on transfer of properties

7. Additional Government grants

8. Biogas and activities of other non-conventional sources of energy and

others.

7.15 Recommendations of TSFC

1. Prioritisation of schemes entrusted to TPs should rest with TPs only.

2. Independent responsibility should be given to TPs to comprehensively

manage the functions assigned constitutionally to them.

3. Honorarium given to Adhayaksha and Upadhyaksha of TPs should be

enhanced.

4. Arrangement should be made to give necessary information to TP

members.

5. Services of Executive Officer of TP should be brought under Cadre &

Recruitment Rules and the post should not be below the rank of

Assistant Commissioner.

6. Executive officer should be responsible for implementation of works

and for any irregularities.

7. Executive officer should have direct control over all the taluk level

officers.

8. It should be mandatory to hold monthly meetings of secretaries of

GPs to review the progress regarding their duties and tax collection.


C H A P T E R - 7

9. The term of Adhyaksha of a TP should be 5 years.

10. Utilisation of Central Finance Commission funds should rest with

TPs only.

11. Conduct of Jamabhandhi in GPs of the taluk should be the

responsibility of Executive Officer of TP and he should also be

responsible for any irregularities.

12. Technical staff should be provided to supplement the implementation

of developmental schemes.

13. Technical staff should be responsible for quality maintenance and

should see that low quality works are not taken up.

14. Transparency should be maintained in implementation of all

programmes.

15. Executive Officer of TP should make sure that a senior taluk level

officer is present in GP meetings.

16. Accounts officer should be responsible to verify the accounts of GPs

every month and should set right any mistakes

17. Ombudsman system should be introduced for conducting enquiries

related to irregularities, corruption etc.


CHAPTER – 8

Powers, Duties, Responsibilities and Problems of Zilla Panchayats

Constitution of Zilla Panchayat

8.1 The ZPs have to perform functions as envisaged in section 145 of

Karnataka Panchayat Raj Act, 1993. Functions assigned to ZPs are listed in

Schedule-III, this includes agriculture extension and horticulture, soil

conservation, minor irrigation, animal husbandry, fisheries, village

industries, minor forest produce, rural housing, drinking water, roads,

education, markets, women and child development, public distribution

system, co-operation, libraries and others. Some more functions may be

entrusted as per the provision vide section 185 of Karnataka Panchayat Raj

Act, 1993.

8.2 Consequent to 73rd Constitutional Amendment, all the states enacted

laws for constitution of Zilla Panchayats. In Karnataka also Karnataka

Panchayat Raj Act, 1993 was enacted. Constitution, powers, duties and

responsibilities of ZPs have been incorporated in the Act. Section 158 deals

with establishment of ZP and its incorporation, whereas section 159 deals

with constitution of ZP.

8.3 As per section 159 of Karnataka Panchayat Raj Act, 1993 ZP is

constituted with the following members;

1. Elected members, one member for every forty thousand population

or part thereof of the population.

2. Members of Parliament and State Assembly whose constituencies lie



C H A P T E R - 8

3. Members of State Legislative Council who are registered as electors


4. Adhyakshas of the TPs in the district

Provisions have been made for providing reservation for SCs, STs,

BCs and Women. Even though there is one-third reservation for women,

currently more than one-third women members are there in the ZPs.

8.4 The term of ZP is five years. Section 177 prescribes election of

Adhyaksha and Upadhyaksha. The term of office of every Adhyaksha and

Upadhyaksha of ZP is for twenty months only. Provision has also been

made for reservation in the election of Adhyaksha and Upadhyaksha.

Reservation is provided by rotation to different ZPs.

8.5 Presence of government officers at meetings is necessary as per

section 182. Section 184 deals with functions of ZP and in Schedule-III the

functions are listed. ZPs are required to implement schemes as per norms

and guidelines issued by state government.

8.6 Functions of ZPs

1. ZPs perform functions as indicated in Schedule-III of Karnataka

Panchayat Raj Act, 1993, provided that where the state and central

governments provide funds for the performance of any function

specified in Schedule-III, the ZPs have to perform functions as per

guidelines and norms laid down. In so far the ZP fund at its disposal

will allow, the ZPs are also required to make reasonable provision

within the area under its jurisdiction in respect of the following

matters;


C H A P T E R - 8

1. Establishment of health centres including maternity centres so as to

cover the entire population within five years, as per the norms laid

down by the government.

2. Constructions of underground water recharge structures to ensure

availability of water in the drinking water wells.

3. Prevention of drilling of irrigation borewells in the vicinity of

drinking water wells to ensure adequate drinking water specially in

lean season

4. Drawing up a plan for social forestry development in each taluk and

spending not less than such percentage of the district plan allocation

every year as may be specified by the government from time to time.

8.7 In addition to these functions, ZPs are required to perform functions

assigned by the state government from time to time. The following Standing

Committees can be constituted by the ZPs as per section 186;

1. General Standing Committee

2. Finance, Audit and Planning Committee

3. Social Justice Committee

4. Educational and Health Committee

5. Agricultural and Industries Committee

8.8 Each Standing Committee has been assigned functions. General

powers of ZP to discharge the functions assigned are mentioned in section

191. Powers and duties of Adhyaksha are given in section 193. Adhyaksha is

the executive head of ZP. Adhyaksha of ZP can use the powers given to him

in order to perform the functions assigned to ZP. He has been given power

to accord sanction up to a total sum of rupees one lakh in a year for the

purpose of providing immediate relief to those who are affected by natural


C H A P T E R - 8

calamities in the district. Section 196 deals with Chief Executive Officer and

other officers of ZP. Government needs to appoint an officer not below the

rank of the Deputy Commissioner of a district or an officer belonging to

Karnataka Administrative Service [Selection Grade] as Chief Executive

Officer and also other officers and staff.

8.9 The Chief Executive Officer of ZP has an important role to play in the

implementation of schemes and programmes. All the other officers of ZP

should obey his orders. ZPs have supervisory powers regarding functioning

of TPs and GPs of the district.

8.10 As per Schedule-III, 29 functions have been assigned to ZPs.

Supervision and coordination of schemes pertaining to district and taluk

levels are the main responsibility. For the development of district the

following functions are assigned; preparation of plans, agriculture extension

and horticulture, soil conservation, minor irrigation, animal husbandry,

fisheries, village industries, minor forest produce, rural housing, drinking

water, roads, education, markets, women and child development, public

distribution system, co-operation, libraries and others.

8.11 In addition to the functions assigned as envisaged in the Act, the ZPs

are also required to implement schemes and programmes of development

entrusted by the state government from time to time. Similarly, ZPs also

implement plan schemes of central government. Swajaladhara, ARWS,

PMGSY, Indira Awas, NREGS are some of the important schemes.

8.12 ZP Fund: Section 225 of Karnataka Panchayat Raj Act, 1993 deals

with fund of ZP. The following form part of, or be paid into, the ZP fund;

1. amounts transferred from consolidated fund of state.

2. all grants and loans

3. all fees and penalties


C H A P T E R - 8

4. all rents from lands or other properties of ZP

5. all private transfers

8.13 The ZP fund should be deposited in government treasury. Application

of ZP fund is dealt in section 227. The fund has to be utilized as decided in

budget of ZP; it should not be used for any other work [except for few

authorized issues].

8.14 In sections 233 and 237 of Karnataka Panchayat Raj Act, 1993 powers

have been given for supervision of works by Adhyaksha and Chief Executive

Officer of ZP. A report regarding quality of work and progress made as

against flow funds needs to be submitted to the ZP. This has to be approved

by the ZP with in 30 days.

8.15 Powers have been given to Adhayaksha of ZP to accord sanction of

providing immediate relief to those who are affected by natural calamities

in the district. Functions, powers and duties of Chief Executive Officer and

other officers of ZP are given in section 197. Necessary powers need to be

exercised in order to implement the programmes related to the functions

assigned as per the Act. The Chief Executive Officer of ZP can exercise

powers conferred up on him under the Act and under general

superintendence and control of Adhyaksha. He can also control the officers

and officials of ZP. He can have custody of all the papers and documents

connected with the proceedings of the meetings of ZP. He can draw and

disburse monies out of ZP fund. If any resolution or proposal is inconsistent

with the provisions of Act and Rules, then it is the duty of Chief Executive

Officer to bring it the notice of Adhyaksha and write to state government. If

no reply is received with in 15 days from the government, then Chief

Executive Officer needs to take action to implement such resolution of ZP.

The Chief Accounts Officer of ZP should perform all the functions related to

the financial matters of ZP and ensure that the expenditures are within the


C H A P T E R - 8

budget. The Chief Executive Officer has supervisory powers over ZP, TP

and GP. ZP has powers to supersede the inconsistent resolutions or

proposals of TP.

8.16 ZP Budget: Section 256 deals with presentation of accounts and

budget of ZP. A complete account of the actual and expected receipts and

expenditure for the financial year ending on thirty-first day of March next

should be laid before the ZP meeting between first day of February and

tenth day of March. Powers are given vide section 257 for revision of

budget, except grants transferred from state government for the schemes

and programmes. Revision over 10 percent of ZP grants is also not allowed.

Section 300 stipulates that the Chief Executive Officer should prepare an

administration report and place it before the ZP and after its approval it

should be submitted to the state government.

Ground Realities

8.17 Whatever may be the powers, duties and responsibilities of ZPs, it is

being said that the realities are different. Many experts have opined that

ZPs are not able to function as local self governments. Many ZPs have also

expressed their helplessness.

1. It is the general opinion that the state government is taking away the

powers given to ZPs by issuing orders and circulars now and then. It

is being said that the Chief Executive Officer is giving priority to the

circulars and orders of state government, whereas, he is sidelining the

opinion of ZP. It has also come to light that action has been taken on

circulars and orders of state government without bringing them to

the notice of Adhayaksha of ZP. On few occasions, a different stand

taken by the ZPs and state government has also been noticed. In this

regard, confusion created in release of funds under 12th CFC and the

matter reaching the High Court is an example.


C H A P T E R - 8

2. ZPs have no powers to formulate and revise its plans as per its

requirements. It is felt that state government is formulating plans

and ZPs are asked to implement. As such, it is felt that this is

contrary to the concept of local governance.

3. It should be taken note that programmes related to agriculture,

horticulture, animal husbandry, water conservation and aforestation

have completely failed. It is complained that development of

wasteland has not been taken up in a systematic manner, although

sufficient facilities are available in the northern parts of the state

which is being prone to drought conditions. Development of

horticulture in this part could be taken up. For example, trees like

pomegranate, mango, sapota, tamarind and other important

commercial crops which have market potential could be taken up in

revenue waste land. Although potential exists for inland fisheries in

the coastal districts, they are bereft of this opportunity. It is being

suggested that ZPs of northern Karnataka should be allowed to

prepare plans based on local needs and powers should be given to

implement these plans.

4. It is noticed that inspite of ZPs having adequate powers for

supervision of activities of TPs and GPs, it is not being effectively

utilized.

5. It is necessary to impart training regarding panchayat raj system to

the elected representatives who are elected for the first time.

6. There is a complaint regarding release of funds which is not timely.

As a result, it has become very difficult to execute works with in a

short span of time. Existing powers regarding technical and

administrative sanction for the estimates of works should be

enhanced.


CHAPTER – 9

The Fiscal State of Taluk and District level

Governments in Karnataka 9.1 Article 243G of the 73rd Constitutional Amendment Act specifies

that the State may endow the Panchayats with such powers and authority

as may be necessary to enable them to function as institutions of self

governments. It also says that provisions for the devolution of powers and

responsibilities upon Panchayats at the appropriate level may be given with

respect to

• the preparation of plans for the economic development and social justice.

• the implementation of schemes for economic development and social justice may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule of this Article.

9.2 There are 29 subjects listed in the Eleventh Schedule1, out of these

16 subjects/functions are related to social sector covering education, health,

housing, women and child development, social welfare and social security.

There are 10 subjects/functions relating to economic activity covering

agriculture, animal husbandry, fisheries, social and farm forestry, rural

industries and so on, where public intervention will enhance production and

employment opportunities at the village level. Even though the 73rd

Constitutional Amendment Act does not specify as to which tier of

Panchayat should perform which function, Karnataka has taken further

measures to assign specific functions and roles to each tier. The

Karnataka Panchayat Raj Act, 1993 has three separate Schedules

wherein functions entrusted to each tier are clearly mentioned. Schedule I2

1 Given in Annexure 7 2 Given in Annexure 9


C H A P T E R - 9 [Section 58] has 29 sectors assigned to the GPs, Schedule II3 [Section 145]

with 28 sectors is meant for TPs and vide Schedule III4 [Section 184] ZPs

are given 31 sectors.

9.3 Further, in 2003 an Activity Mapping Framework was completed

by Government of Karnataka [GOK] broadly positioning the Zilla and

Taluk Panchayats as planners, facilitators and owners of common executive

machinery and the GPs as the local service providers. As a followup to this,

a landmark order was issued by GOK on October 16, 2004 reallocating

the schemes/programmes among three tiers of Panchayat Raj Institutions.

With effect from the financial year 2005-2006, all the state sector schemes

and funds dealing with functions devolved to Panchayat Raj Institutions

were transferred to them by devolving matching finances.

9.4 The previous chapter dealt with the dimensions of fiscal activity of

the lowest tier of Panchayat Raj system. The emphasis in this chapter is on

the financial position of the other two higher tiers - Taluk and District level

Panchayats. In Karnataka, these two tiers of Panchayats do not have

independent sources of their own revenue. So, as per the Constitutional

provisions, TPs and ZPs are performing the role of implementation of

schemes for economic development and social justice. In view of this, it is

understandable to note that these two tiers of Panchayats manage about 90

per cent of PRI spending. As such, it is relevant to understand the structure

of finances of these two tiers also. This would give us a complete picture of

PRI fiscal activity.

9.5 Before going into the details of pattern of spending by these two tiers,

it would be relevant here to understand the “socio-economic variations”

prevailing across districts and taluks. For this purpose, the data sets of

3 Given in Annexure 10 4 Given in Annexure 11

Third State Finance Commission

98

C H A P T E R - 9 census 2001 and data published by various departments of GOK on various

socio-economic indicators have been utilised. Table-9.1 gives the

characteristics of district variables used.

Table 9.1

Characteristics of District Variables Indicators 2004-05

Percapita NDDP at constant (1999-00)

prices (Rs.)

Area (Sq.Kms.)

Total Population

Percentage of SCs &

STs

Percentage of Rural

Population

Literacy Levels

Number 27 27 27 27 27 27Mean 18197.19 7103.37 1957428.22 23.37 72.03 66.05Median 14728 6814 1669762 21.02 75.97 65.00Minimum 11200 2190 548561 9.28 11.89 49.54Maximum 46197 16224 6537124 39.71 86.26 83.91Range 34997 14034 5988563 30.42 74.37 34.37Std. Deviation 7721.487 3087.301 1178865.439 8.832 15.127 9.521Std. Error of Skewness

0.448 0.448 0.448 0.448 0.448 0.448

9.6 It can be seen that the per capita income of richest district in

Karnataka is about four times that of the poorest district. Wide

variations could also be observed in indicators like Area, Population,

Percentage of SCs&STs and Percentage of Rural Population. There is a gap

of 34.37 percent between the most and the least literate districts.

9.7 The simple correlation analysis given in Appendix-9.1 reveals that

Higher Per-capita income districts are likely to have significantly higher

literacy level, larger population, and at the same time have lower

percentage of SCs&STs, less rural population and area.

9.8 Since per capita income at the taluk level is not being computed, the

other five variables are taken for observing the variations across the

talukas. It can be noticed from Table-9.2 that across the talukas also wide

gaps persist. There is a gap of 50.1 percent between the most and the least


99

C H A P T E R - 9 literate talukas. Hagaribommanahalli taluka in Bellary district does not

have urban population, in view of this one can see a gap of 77 per cent

between the least and highest non-urbanised talukas. Similarly, the

percentage of SCs & STs population also varies across talukas. There are 73

talukas with high concentration of SCs and STs. Correlation analysis

(Table-9.3) reveals that the talukas with high concentration of SCs and

STs tend to have less literacy rates.

Table 9.2

Characteristics of Taluk Variables

Indicators Area (Sq.Kms.)

Total Population

Literacy Rate

Percentage of Rural

Population

Percentage of SCs &

STs Population

Number 167a 167a 167a 167a 167a

Mean 1093.9 266941 63.734 79.797 24.796

Median 991.5 245294 62.900 84.803 23.476

Minimum 225.4 36930 37.2 23.0 4.7

Maximum 2785.8 1038490 87.3 100.0 55.1

Range 2560.4 1001560 50.1 77.0 50.4

Std. Deviation 457.719 142480.911 10.224 14.286 10.369

Std. Error of Skewness

0.188 0.188 0.188 0.188 0.188

a: Population of cities/towns spread over in two taluks are not considered

Table-9.3

Matrix of Simple Correlation Co-efficients of Taluk Variables

Indicators Literacy Rate

Percentage of Rural Population

Percentage of SCs & STs Population

Literacy Rate Pearson Correlation 1 -.301** -.575** Sig. (2-tailed) . .000 .000 %Rural pop Pearson Correlation -.301** 1 .163* Sig. (2-tailed) .000 . .036 % SCs & STs pop Pearson Correlation -.575** .163* 1 Sig. (2-tailed) .000 .036 . ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).


100

C H A P T E R - 9 9.9 Having noticed such inter-district and inter-taluka disparities, the

issue here is how the Panchayat Raj Institutions functioning at these levels

manage their fiscal activity for the economic development and provide social

justice. As these institutions are functioning more as spending bodies than

as independent local governments, the question here is whether the

intergovernmental transfers take place in a matching way to these PRIs.

9.10 In view of the facts mentioned in Para 3 of this Chapter, only the

intergovernmental transfers effected by the State Government prior to

2005-06 and thereafter have been compared and studied. Data used pertain

to the budget allocations made by the Government to Panchayat Raj

Institutions under Plan and Non-plan grants during the years 2002-03,

2003-04, 2004-05, 2005-06, 2006-07 and 2007-08. During the first three

financial years prior to the order dated October 16, 2004 devolution pattern

has been analyzed. The next three financial years to compare the devolution

made in the post period rationalization of schemes. One can also

understand the budgetary allocation of funds made to PRIs during the 10th

Five year Plan i.e. 2002-03 to 2006-07. Here it is also necessary to keep in

mind the fact that a major component of non-plan grants is meant for

payment of salaries and allowances to the functionaries of PRIs. Currently,

there are about three lakh employees serving in the PRIs, expenditure on

school teachers salary constitutes the major portion.

9.11 The budget document popularly known as “Link Document”

prepared by the Department of Finance contains scheme-wise and district-

wise allocation of funds under both Plan and Non-plan made to Panchayat

Raj Institutions. This document does not contain allocations made to each

Taluk Panchayat or Grama Panchayat, however, it does contain the

district-wise aggregated figures for the allocations made to Taluk

Panchayats and Grama Panchayats.


101

C H A P T E R - 9 State Level Macro Analysis:

9.12 The data culled out from link documents of various years is presented

in Appendix-9.2 which portrays the intergovernmental transfers made

under Plan and Non-plan grants to the PRIs. It can be seen here that the

action taken as per the order dated October 16, 2004 has resulted in a

quantum jump of funds transferred under plan grants during the year

2005-06. Higher allocations under Non-plan during the financial year 2007-

08 could also be noticed due fact that certain plan schemes of the previous

Five Year Plan were shifted to Non-plan as 2007-08 happens to be the first

year of Eleventh Five Year Plan. It can also be seen that percentage share of

GPs has doubled over a period of five years and in absolute terms, it has

increased by fourfold.

0

200

400

600

800

1000

1200

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Rs.

Cro

res

Zilla Panchayat Taluk Panchayat Grama Panchayat

Trends in Allocation of Plan GrantsDiagram-9.1

9.13 As far as focus of this Chapter is concerned, it is observed that the

inter-mediatory tier of Panchayat Raj System has been pushed down by

reducing the Plan

grants (Diagram-9.1).

The TPs share in Plan

allocations which was

11.78 percent during

the Tenth Five Year

Plan has been further

brought down to 8.38

percent during the

financial year 2007-2008. This attitude of the Government towards the TPs,

point outs that the role of implementation of schemes by the TPs is getting

minimized. Relatively, the other two tiers are gaining more attention of the

government. It should be noted that the TPs continued to receive higher

share of Non-plan grants (Diagram-9.2) which is spent on payment of


102

C H A P T E R - 9 salary and allowances to the functionaries. More discussion on this issue is

in the next chapter in the sector-wise financial activity of PRIs.

0

1000

Rs

es

2000

3000

4000

5000

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

.Cro

r

Zilla Panchayat Taluk Panchayat Grama Panchayat

Trends in Allocation of funds(Plan+Non-plan) to PRIsDiagram-9.2

9.14 In Table-9.4, a comparative analysis of share of three tiers of PRIs in

the Plan and Non-plan

grants during the Tenth

Five Year Plan and

2007-08 is given. It can

be seen that the

quantum of Plan

transfers constitute

only one quarter of the

total transfers effected.

From the financial year

2007-2008, GPs have also received funds under Non-plan allocation.

Table 9.4

Percentage of Allocation of Funds to PRIs between Plan and Non-plan Grants

Year Plan /

Non-plan Zilla

Panchayat Taluk

Panchayat Grama

Panchayat TOTAL

Plan 31.62 11.78 100.00 25.59

Ten

th

Fiv

e Y

ear

Pla

n

Non-plan 68.38 88.22 0.00 74.41

Plan 36.36 8.38 85.24 26.60

2007

-200

8

Non-plan 63.64 91.62 14.76 73.40

District Scenario:

9.15 In the decentralisation environment the concerned grants

transferring government should adopt a set of appropriate criteria to

achieve fiscal balances. Karnataka in the year 1987-88, when it had ushered

in a new era of decentralisation, had adopted 12 (Box-9.1) and 5 (Box-9.2)


103

C H A P T E R - 9 criterion for distribution of plan grants to the Zilla Parishads and Mandal

Panchayats respectively. Consequent to passing of new Panchayat Raj Act

in 1993 wherein three tier of Panchayat Raj system was adopted, it is

claimed that the same 12 criteria are being continued for interse

distribution of plan grants to the Zilla Panchayats and the 5 criteria

adopted for Mandal Panchayats was replaced with 6 new criteria (Box-9.3).

BOX – 9.1

Criteria for Distribution of Plan Grants to Zilla Parishads

Criteria Weightage(%)

1. Population 50

2. Backwardness in agriculture as measured by the value of agricultural output per hectare

5

3. Backwardness in irrigation as measured by the proportion of irrigated area to net area sown

7

4. Backwardness as measured by the value of industrial output 5

5. Backwardness in communication as measured by road and railway milage per 100 sq.km, and per lakh of population

5

6. Backwardness in financial infrastructure as measured by size of population served by each commercial and co-operative bank

2

7. Backwardness in medical and health facilities as measured by the number of hospitals per 1000 population/bed population ratio

5

8. Backwardness in power supply as measured by the proportion of villages electrified

5

9. Problems of weaker sections: (a) as measured by the proportion of SCs/STs in the total population (b) as measured by the proportion of landless agricultural labourers

2 2

10. Special problems of malnad areas and drought-prone areas: (a) as measured by the area under forest (b) as measured by the rural population of drought-prone areas

2 2

11. Literacy percentage 5

12. Performance in family planning programme 3

Total 100


104

C H A P T E R - 9

BOX –9. 2

Criteria for Distribution of Plan Grants to Mandal Panchayats


1. Population 50

2. Area of Mandal Panchayat 15

3. Dry land area 15

4. Agricultural labour population

10

5. Per capita resources raised 10

Total 100

BOX – 9.3

Criteria for Distribution of Plan Grants to Taluk Panchayats


1. Population 50

2. Area 15

3. Literacy 15

4. SC/ST population 10

5. Dry land area 10

6. No. of Agricultural labourers

10

Total 100

9.16 As far as GPs are

concerned, the criterion

followed is providing fixed

block grants uniformly to

each of them. It can be

seen from Box-9.1 and

Box-9.2, that 43 and 25

percent weightages were

given to backwardness

indicators, while allocating funds to erstwhile Zilla Parishads and Mandal

Panchayats. Whereas, 45% weightage for backwardness indicators has been

given for distributing plan

funds to the present TPs. The

issue here is whether the

criterion followed to transfer

funds to ZPs and TPs is still in

practice or are there any

determinants by which one

can understand the pattern of

funding made to these two

higher tiers of panchayats.

Determinants of Intergovernmental Transfer of Funds to ZPs and TPs:

9.17 It is worthwhile to take a look of those factors which have been given

importance in allocating the funds to ZPs. Ordinary Least Square (OLS)

model (Table-9.5) shows relationship of total grant transferred to few

socio-economic characteristics of a district. The dependent variable has been

taken as log of total grant. The independent variables are included based on

the following priori reasoning:


105

C H A P T E R - 9

• Population size should be positively related to grant transferred,

because district with greater population need larger grants to

meet the needs.

• The Area size of the district is also important as far as

intergovernmental transfer is concerned and it should be

positively related to the grant amount.

• The percent of SC/ST population is expected to be positively

related to the grant because this implies a heavier concentration

of poorer population. For this reason, greater amounts of

intergovernmental transfers will flow to districts with a greater

percentage of SC/ST population.

• The marginal effect of variations in the literacy rate on grant

should be negative as literacy signals the higher socio-economic

condition of that area. Concentration of literate population in

socio-economically advanced districts, are expected to receive

comparatively lower grant.

• The share of agricultural labour is expected to have positive

impact on grants because of the likelihood that larger shares of

agricultural workers indicate a more agrarian economy which is

more backward or poverty driven. Such regions need greater

investment on development.

• Road length and population per hospital bed should be positively

related to grant transferred as greater volumes of both need

greater amounts of fund to maintain.

9.18 The OLS estimation shows expected relationship as far as hypothesis

is concerned. As seen in the Table-9.5 that the concerned variables explain

total 95 percent variability of total grant transferred. For the transfer of


106

C H A P T E R - 9 funds to the district mainly two factors, population and area have been

given more importance. Table-9.5 shows that these two factors are

statistically significant in relation to grant transferred and their association

is expectedly positive. Therefore, it indicates that area and population

have been given importance in the distribution of funds. Another

indicator, which is also positively associated, is the road length per sq Km.

Thus greater the road length more funds are needed for maintenance.

Other factors like percentage of SC/ST population, percentage of

agricultural labour are also positively associated and population per

hospital bed is negatively associated with the transfer of fund but they are

not statistically significant.

Table 9.5

OLS Estimation of the Determinants of Variations in Total Grants Transfers to Districts: 2003-08

(Log of Dependent Variable)

Indicators Correlation Coefficient

(Constant) -2.92** Log of total area .401** Log of population .460** Log of percentage of agricultural labour .028 Log of percentage of SC/ST population .030 Log of percentage of literate population .041 Log of road length per Sq Km .133* Log of hospital bed strength -.022 R2 .956


9.19 A similar analysis at the district level has been carried out for the

TPs, to identify the significance of factors which are associated with the

transfer of grant to the TPs. The results from OLS estimation is shown in

Table-9.6. It can be seen that the concerned variables explain total 91

percent variability of total grant transferred. The correlation of total grant


107

C H A P T E R - 9 and the explanatory variables are same as in case of the ZP analysis. For

TPs also the area, population size and percentage of literacy are positively

and also significantly associated with the total grant transferred. The other

variables like percentage of agriculutal labour, SC/ST population, road

length and population per hospital bed have not come out statistically

significant as far as the association with the grant is concerned.

Table 9.6

OLS Estimation of the Determinants of Variations of Total Grants to Taluks :2003-08

(Log of Dependent Variable)

Indicators Correlation Coefficient

(Constant) -4.87** Log of total area .357** Log of population .549** Log of percentage of agricultural labour -.041 Log of percentage of SC/ST population .056 Log of percentage of literate population .387* Log of road length per Sq Km -.058 Log of hospital bed strength .109 R2 .910


9.20 The foregoing analysis and in view of the fact that state government

was unable to consider the horizontal distribution of funds among PRIs as

suggested by the previous SFCs, have made it inevitable for TSFC to adopt

a different approach on this issue. This will be discussed in the Method of

Allocating Grants to PRIs.


108

109

Appendix - 9.1 Matrix of Simple Correlation Co-efficients of District Variables

Indicators 2004-05 Percapita NDDP at constant (1999-00)

prices (Rs.)

Area (Sq.Kms.)

Total Population

Percentage of Rural

Population

Percentage of SCs &

STs

Literacy Levels

2004-05 Percapita NDDP at constant (1999-00) prices (Rs.)

Pearson Correlation

1 -0.454* 0.473* -0.666** -0.383* 0.691**

Sig. (2-tailed) . 0.017 0.013 0.000 0.048 0.000

Area (Sq.Kms.) Pearson Correlation

-0.454* 1 0.180 0.281 0.201 0.426*

Sig. (2-tailed) 0.017 . 0.368 0.156 0.315 0.027

Total Population Pearson Correlation

0.473* 0.180 1 -0.686** -0.120 0.149

Sig. (2-tailed) 0.013 0.368 . 0.000 0.551 0.459

Percentage of Rural Population Pearson Correlation

-0.666** 0.281 -0.686** 1 0.295 -0.407*

Sig. (2-tailed) 0.000 0.156 0.000 . 0.135 0.035

Percentage of SCs & STs Pearson Correlation

-0.383* 0.201 -0.120 0.295 1 -0.670*

Sig. (2-tailed) 0.048 0.315 0.551 0.135 . 0.000

Literacy Levels Pearson Correlation

0.691** 0.426* 0.149 -0.407* -0.670* 1

Sig. (2-tailed) 0.000 0.027 0.459 0.035 0.000 .

* Correlation is significant at the 0.05 level (2-tailed). ** Correlation is significant at the 0.01 level (2-tailed).

110

APPENDIX - 9.2 Budgetary Allocations of Funds among Panchayat Raj Institutions

during the years 2002-03 to 2007-08 Budget Allocations (in Crores) Percentage of Allocations Growth Rates (Percentages)

Grants YEAR

ZP TP GP TOTAL ZP TP GP TOTAL ZP TP GP TOTAL 2002-03 306.06 168.96 198.07 673.09 45.47 25.10 29.43 100.00 2003-04 320.15 170.20 198.07 688.41 46.51 24.72 28.77 100.00 5 1 0 2 2004-05 411.74 245.33 282.65 939.71 43.82 26.11 30.08 100.00 29 44 43 37 2005-06 935.65 482.09 585.16 2002.90 46.71 24.07 29.22 100.00 127 97 107 113 2006-07 956.47 604.43 615.28 2176.18 43.95 27.77 28.27 100.00 2 25 5 9

1134.17 372.07 734.36 2240.60 50.62 16.61 32.78 100.00 19 -38 19 3

PL

AN

2007-08 (36.36) (8.38) (85.24) (26.60)

2002-03 1145.82 2140.65 3286.47 34.86 65.14 0.00 100.00 2003-04 1161.24 2270.21 0.00 3431.45 33.84 66.16 0.00 100.00 1 6 4 2004-05 1122.51 2463.17 0.00 3585.67 31.31 68.69 0.00 100.00 -3 8 4 2005-06 1286.11 2676.35 0.00 3962.46 32.46 67.54 0.00 100.00 15 9 11 2006-07 1620.36 2958.49 0.00 4578.85 35.39 64.61 0.00 100.00 26 11 16

1985.29 4068.66 127.19 6181.14 32.12 65.82 2.06 100.00 23 38 35 Non

- P

LA

N

2007-08 (63.64) (91.62) (14.76) (73.40)

2002-03 1451.88 2309.61 198.07 3959.56 36.67 58.33 5.00 100.00 2003-04 1481.39 2440.40 198.07 4119.86 35.96 59.24 4.81 100.00 2 6 0 4 2004-05 1534.24 2708.49 282.65 4525.39 33.90 59.85 6.25 100.00 4 11 43 10 2005-06 2221.76 3158.44 585.16 5965.36 37.24 52.95 9.81 100.00 45 17 107 32 2006-07 2576.82 3562.92 615.28 6755.03 38.15 52.74 9.11 100.00 16 13 5 13

PL

AN

& N

on-

PL

AN

2007-08 3119.46 4440.73 861.54 8421.74 37.04 52.73 10.23 100.00 21 25 40 25

Plan 2930.06 1671.01 1879.23 6480.29 45.21 25.79 29.00 100.00 (31.62) (11.78) (100.00) (25.59) Non-plan 6336.04 12508.86 0.00 18844.90 33.62 66.38 0.00 100.00

(68.38) (88.22) (0.00) (74.41) Xth

Pla

n

2002

-03

to

2006

-07

TOTAL 9266.10 14179.87 1879.23 25325.19 36.59 55.99 7.42 100.00 Source: Budget documents(Link Document) of various years Note: Figures in brackets indicate percentage of allocations between Plan and Non-plan

CHAPTER – 10

Analysis of Functioning of Panchayat Raj Institutions and Recommendations

10.1 Higher expenditure is being incurred in the last quarter particularly

in the last month of financial year. This needs to be avoided by suitably

phasing out implementation activities over 12 months period. This will

result in quality implementation of schemes. This is the objective of the

newly introduced ‘Monthly Programme Implementation Calendar’ [MPIC]

also. Delay in approval of Action Plan results in delay in implementation

and also delay in release of funds. Since the state government does not

provide sufficient funds for some schemes, it is necessary to seek funds in

the Supplementary Budget. This causes delay in obtaining central grants.

Example – drinking water supply schemes.

10.2 In place of Monthly Multi-level Reviews [MMR], a new ‘Monthly

Programme Implementation Calendar’ [MPIC] has been introduced. In this,

main components of programme implementation are incorporated and

reviewed. This system may bring in desired changes.

10.3 Action Plans for the next two years could be prepared in the months

of October-November. Works can be taken up as per actual release of funds.

This will avoid delay in implementation and change of works. Revision of

Action Plan, if required, could be allowed in the month of October.

10.4 GP functions such as maintenance of drinking water supply,

streetlights and cleaning could be given on annual contract basis(AMC).

This will result in savings and instances of misutilisation could also be

reduced.


C H A P T E R - 1 0 10.5 Karnataka Panchayat Raj [Budget & Accounts of GPs] Rules, 2006

has been introduced from September 1, 2007. As per this, all the works need

to be got done on contract basis. In these Rules, administrative and

technical powers have been enhanced. But, TPs have not been given much

power. It is necessary to give more powers to TPs and ZPs.

10.6 GPs are required to maintain double entry system of accounts. By

this arrangement, transparency could be maintained. When assets are

created, it is taken into assets & liabilities register. This is a good practice,

this needs to be followd in TPs and ZPs also.

10.7 ZPs and TPs have not replied to the audit para of C & A.G. In a few

districts, for the last few years, auditing of accounts has not been done by

the local audit circle. Non-submission of accounts by GPs is the reason for

this. Many ZPs and TPs have not submitted their accounts to the

Accountant General in time. Action should be initiated against defaulters

and this situation should be improved.

10.8 Excluding NREGS, all other works should be done by tender as per

rules. ‘Piece Meal’ tender should not be allowed.

10.9 The planning unit of ZP should change its working system. Many

posts in this unit have since been shifted as Taluk Planning Officers. There

is shortage of staff in the ZP Planning. There are only two posts of

Assistant Statistical Officer. Another two posts of Assistant Statistical

Officer and one post of Statistical Inspector should be created.

10.10 Emphasis should be laid on ‘outcome’ rather than ‘output’. Actions

Plans should fill the deficit of development. Implementation of schemes

should not be taken up by distributing funds. Works cannot be

accomplished by this arrangement. Public money is being wasted. District


C H A P T E R - 1 0 Planning Committees should give guidance in these matters. Top priority

should be given for this work.

10.11 The planning unit of ZP should prepare a socio-economic profile of

the district every year. This document should be presented at the time of

budget presentation of ZP to show the development indicators and deficits

of development. This will help to fill shortcomings in the actions plans.

10.12 Panchayat Raj Institutions should work for human development.

People should have better living conditions. Human development reports

should be prepared. This requires quality data. Data on enrolment in

schools, births & deaths registration and statistics pertaining to various

developmental sectors should be collected and analysed. It has come to the

notice of TSFC that there is no clarity and authenticity in the data

furnished at GP,TP and ZP levels. Hence, under District Planning

Committees, information pertaining to all the local bodies of the district

should be collected, consolidated and analysed. In this regard, importance

should be given to the following points;

10.13 District Planning Committees should take up studies of various

subjects, evaluation studies and conduct workshops. These reports should

supplement the development process and guide PRIs in this direction. In

these matters, prominent changes are necessary. Preparation of two year

advance Action Plans should be the responsibility of District Planning

Committees. This should be done before sending the draft Annual Plan to

the state government.

10.14 In the year 1982, government has issued orders considering the

Directorate of Economics and Statistics as the ‘Nodal Agency’ for collection,

consolidation and analysis of statistics and also to guide conduct of survey.

Working of statistical units in all the departments should be verified and


C H A P T E R - 1 0 necessary guidance should be given and then only it is possible to collect

quality data. This will facilitate in formulation of plans and comparing

achievements.

10.15 As per the Karnataka Transparency Act, 1999 and other related

Rules, purchases, awarding contracts and out sourcing, should be

transparent. Finance Department has given financial powers to officers.

Implementation of works incorporated in Action Plans could be taken up as

per powers given to officers. The Chief Executive Officer of ZP has

administrative powers to accord sanction up to Rs.20 lakhs. Sanction could

be obtained up to Rs.30 lakhs from ZP by placing it before general body

meeting. If it exceeds this amount, sanction from state government is

required. All these have to be verified by the standing committees and in

general body meetings.

10.16 The TSFC had a consultative meeting with the experts of Abdul

Nazeer Sab State Institute for Rural Development. As per the request of

TSFC, the institute held a workshop of elected representatives of three tiers

of PRIs and experts. The views and suggestions that emerged in the

workshop pertaining to administrative reforms, decentralisation of power,

financial decentralisation, success of elected representatives and

transparency in administration have been consolidated and sent to TSFC.

This list is given in Annexure – 22. TSFC has examined these suggestions

scrupulously. TSFC feels that these suggestions are very useful for

strengthening of lower level governments. As such, TSFC recommends that

the state government should take note of these suggestions given in

Annexure – 22.

10.17 Staff problem in Malnad, Coastal and Backward Districts

Malnad, Coastal and Backward Districts of Kodagu, Dakshina

Kannada, Udupi, Uttara Kannada, Bidar, Gulbarga and other districts are


C H A P T E R - 1 0 facing shortage of staff. The Attendance of employees of various

departments in the rural areas of districts having heavy rainfall is very less.

Shortage of staff has become a bottleneck for programme implementation

and inspection. This problem is prevailing since many years, but state

government has not found solution for this. Hence, it is essential that the

officers and staff serving in malnad and Kodagu districts should be given

special allowance and provided with better working facilities. In the

backward districts of Gulbarga, Bidar, Bijapur and other districts also

action should be taken to fill up vacant posts urgently. TSFC recommends

that government should give priority to this matter.

10.18 Summary of Recommendations

1. District Planning Committees should be strengthened and should

become active committees.

2. Planning, Programme Implementation and Statistics Department and

RD& PR Department should give continuous guidance to PRIs.

3. Ombudsman should be introduced.

4. Speed up verification of accounts and avoid misutilisation.

5. ‘Piece Meal’ tender should not be allowed.

6. Basic statistics should be collected, consolidated and analysed.

7. Shortfall in development should be found out from analyzing

statistics and suitable solution should be found in implementation of

programmes and schemes.

8. A two year Action Plan should be prepared in October in order to

avoid delay in preparation of Action Plan. Based on this, Annual Plan

should be submitted to the government.


C H A P T E R - 1 0

9. As envisaged in section 309 of Karnataka Panchayat Raj Act, 1993,

preparation of development plans should be taken up at all the three

levels of PRIs. Consolidated development plan should be submitted to

the government through District Planning Committees.

10. Double entry accounting system should be extended to TPs and ZPs.

11. Directorate of Economics & Statistics, which is the nodal agency,

should give suitable guidance to PRIs.

12. Only 64 posts of Taluk Planning Officers have been created, these

posts should be created for the remaining taluks also and plan

preparation, programme implementation, evaluation and collection of

basic village statistics should be taken up.

13. Objectives of various programmes are for local development and as

such, the implementing officers should lay emphasis on ‘outcome’

rather than ‘output’.

14. Monthly Programme Implementation Calendar should be introduced

to avoid heavy expenditures at the fag end of financial year.

15. Grants meant for schemes should be utilized properly.

16. PRIs should be strengthened by revising the activity mapping.

10.19 Suggestions and Recommendations with respect to ZPs

1. Adhyaksha of ZP should have the status of a cabinet minister and his

honorarium should be enhanced.

2. Adhyaksha of ZP should be given grants for taking up developmental

works of urgent nature.


C H A P T E R - 1 0

3. Prioritization, implementation and responsibilities regarding works of

ZP and works related programmes of central and state governments

should be with the ZPs.

4. Required knowledge about Acts and Rules should be imparted to ZP

members and awareness about their responsibility should be created

and necessary trainings should be given to them.

5. ZPs should have independent powers to utilize funds released under

CFC grants.

6. The issue of MLAs, MLCs and MPs being ex-officio members of ZPs

needs reconsideration.

7. Circulars and guidelines issued by state government should be

brought to the notice of ZP.

8. The Deputy Secretary of ZP should take up quarterly review meetings

at the TP level inviting officials of all the GPs. He should be

responsible to set right the grievances. The Chief Executive Officer of

ZP should invariably review the reports and take necessary actions.

9. Chief Executive Officer of ZP and Executive Officer of concerned TP

should have the responsibility of conducting Jamabandhi of all the

GPs.

10. Adhyaksha of ZP should visit a few GPs in a year and exchange views

and review the progress and should find out solutions to the

grievances.

11. Chief Executive Officer of ZP should visit TPs and atleast five GPs in

a month and hold review meetings. If misutilisation of funds is

noticed, he should take suitable action. He should also give guidance.


C H A P T E R - 1 0

12. ZPs should be given powers for re-appropriation of grants.

13. Implementation of programmes during rainy season is difficult in

malnad and coastal districts and as such, it is essential to give

additional time of three more months beyond March.

14. Release of Development grants through different boards, corporations

should be stopped, and all funds should be released through ZPs only.

15. Ombudsman system should be introduced to make enquiries about

corruption, misutilisation in ZPs.

16. ZPs are not supporting youth development and sports. Hence, it is

necessary that in the ZP budget a minimum of 5 percent should be

earmarked towards rural sports, development of youth and folk arts.


C H A P T E R – 1 1

District Planning Committee

District Panning Committees in Local Bodies [Section 310]

11.1 Since 1950 it is being emphasized that plans should be prepared as

per local needs. But, in view of opinion of experts, only on few occasions

plans were prepared as per the requirement at the local level. A single plan

at the state level was improper for the use of resources and expected results

could not be achieved.

11.2 73rd Constitutional Amendment and Section 310 of Karnataka

Panchayat Raj Act, 1993 makes it mandatory that a District Planning

Committee is constituted in every district to consolidate the plans prepared

by ZP, TP, GP and ULBs in the district. Even after 15 years of

Constitutional Amendment there is no progress in preparation of district

plans.

11.3 In 2005, an expert committee was constituted by the panchayat raj

department at the Centre, to prepare district plans for the year 2007-08

which was first year of implementation of eleventh five year plan. This

committee gave its report in March 2006. This report was accepted and in

April 2006 all the districts were informed to prepare district plans. But, so

far a systematic district planning has not been introduced, this has pushed

the panchayat raj system a step backwards.

Objectives and Aim of District Planning

11.4 Achievement of progress in development with the coordination of

local bodies is the main objective of district planning. Every GP and ULB

should be considered as a focal point. All round development of district


C H A P T E R - 1 1

should be considered as the aim of district planning and district should be

considered as one unit.

11.5 Taking into consideration the available local finances and human

resources, plans should be prepared to meet the local needs. Finding

solutions through local self governments should be the aim of district

planning.

11.6 The objective of district planning has been forgotten in recent times.

Various departments are formulating their own plans. This needs to be

stopped and preparation of a comprehensive district plan for village

development should be taken up.

11.7 Constitution of District Planning Committee

1. Members of House of people who represent the whole or part of

the district

2. Members of the Council of State who are registered as electors in

the district

3. Adhyaksha of ZP

4. Mayor or President of municipal corporation or municipal council

5. Such number of persons, not less than four-fifth of total no. of

members of the Committee elected amoung ZP, Town Panchayat

and councilors of municipal corporation or municipal council in

the district.

6. All the members of the State Legislative Assembly whose

constituencies lie within the district, the members of the State

Legislative Council who are registered as electors in the district

and the Deputy Commissioner shall be permanent invitees of the

Committee.

7. Chief Executive Officer is secretary of the committee


C H A P T E R - 1 1

11.8 Preparation of district planning should have the following three points;

1. Making use of own revenue with the available funds for central

and state government programmes, plans should be prepared for

rural activities and solving problems.

2. In similar way, own revenue of ULBs and resources available for

central and state government programmes should be combined to

prepare plans to facilitate implementation of programmes.

3. The objective of District Planning is to consolidate the above two

plans for the entire district and within the targets set by the State

Plan.

The responsibility of District Planning Committee is to

comprehensively consolidate plans to formulate and prepare the district

plan.

Preparation of District Plan

11.9 It is necessary to formulate a developmental picture with the

available local resources from GP level to district level for the next five

years. Minimum requirement of rural needs should be taken into account. It

is necessary to consider three important indicators in formulation of district

plan, these are;

1. Human Resource

2. Growth of basic infrastructure

3. Potential of production growth

Development of human resources mainly includes health, education,

welfare of women & child and social justice.

A basic facility means providing a minimum level of requirement.


C H A P T E R - 1 1

11.10 A Vision Document for the next 5-10 years should be prepared taking

into consideration data furnished by various departments with respect to

education, health, sanitation, housing, drinking water, poverty alleviation,

agriculture, irrigation, social justice and cottage industries and others. In

preparation of such document, the opinion of the stake holders should be

taken, if required, opinion of technical advisory group may also be taken.

Views and suggestions of retired government officers and NGOs may also be

taken in preparation of vision document.

11.11 It is necessary that production potential should be increased based on

availability of local resources. Every GP should formulate plans to achieve

these targets with in a stipulated time. Formulation of plans involving basic

facilities like drinking water, housing, health, education, sanitation and

others should be taken up by the local panchayats. Priority should be given

to welfare of women and child. Programmes should be formulated for

efficient use of local resources.

11.12 Annual Plan should be prepared based on the following guidelines;

1. Annual Plan should be prepared based on discussions held in ward

sabha and grama sabha. The schemes implemented at the village level

should be included in the GP plan. Resources to be locally mobilized

should be incorporated in the plan. Programmes to be implemented in

more than one GP should be included in the plan prepared by the TP.

2. TP should prepare the plan based on the opinion and suggestions

received from GPs. The schemes and works implemented at the taluk

level should be included in the taluk plan. The schemes and works

implemented in all the taluks should be included in the district plan.

3. ZP plan should be prepared based on the plans prepared by the GPs

and TPs.


C H A P T E R - 1 1

4. ULBs should also prepare plans which are applicable to them.

11.13 Based on the above categorization district plan should be prepared

11.14 State sector plan schemes and Central sector plan schemes should

also be included in the District Plan and it is also necessary to take into

consideration the following resources;

1. Own resources meant for development

2. State Finance Commission grants

3. Central Finance Commission grants

4. Untied grants

5. Central sector schemes grants

6. State sector schemes grants

7. Transfer of resources to ULBs

11.15 It is very essential that preparation of plans should be based on

decisions taken at ward sabha, grama sabha and panchayat levels. As a

supplement to this, wide publicity should be given to create awareness

among general public.

11.16 Emphasis should be given to mobilization of local resources.

Necessary training and proper guidance should be given to the local bodies

in this regard. Technical staff should be made available to prepare a

scientific priority list. As people’s participation is also important, proper

information should be given to them. Necessary action should be taken to

inform general public about the details of availability of local resources.

Availability of Local Area Development Fund meant for members of

parliament and state legislature should be taken in to account. Kerala

model could be adopted. District plan should be conjoined to the Five Year


C H A P T E R - 1 1

Plan. Once in five years plans should be re-examined and annual plans

should be prepared.

11.17 All these have to be taken into account in preparing a district plan by

consolidating panchayat and urban plans.

11.18 Participation of people in ward sabha and grama sabha is very

essential for the success of these plans.

11.19 Views and Recommendations of TSFC

1. The present District Planning Committees should be made active.

These Committees should hold regular meetings.

2. District Planning Committees along with preparation of plans

should have the powers to review the progress of programme

implementation.

3. District Planning Committees should take quarterly reviews and

find out measures to solve the grievances.

4. The plans prepared by the State Planning Board should confirm

that district plans are incorporated.

5. It is necessary that state government takes up its plan after

consolidation of all district plans.


CHAPTER – 12

Drinking Water Supply 12.1 Drinking water is most essential for human life. Many epidemics are

caused by unsafe drinking water. Providing safe drinking water is a prime

responsibility of the Government. Rural Water Supply works in rural areas

are taken up through the Panchayat Raj Institutions. In urban areas

(except Bangalore city) this is entrusted to Karnataka Urban Water Supply

and Drainage Board (KUWS&DB).

Rural Water Supply System

12.2 Providing safe drinking water is one of the primary duties of

Panchayat Raj Institutions. Different water supply schemes are brought

under the purview of panchayats. Even after six decades of independence,

the government has not been fully successful in providing safe drinking

water. Failure in proper planning and implementation may be the reason

for this.

Details:

1. Bore well with hand pump

2. Bore well with power pump

3. Mini Water Supply Scheme(MWS)

4. National Rural Water Supply Scheme(NRWS)

5. Swajala Dhara

6. Accelerated Rural Water Supply Scheme.

12.3 In the beginning, open wells and bore wells used to be the sources for

drinking water supply schemes. According to one estimate, there are

31,44,097 open wells and 1,42,223 bore wells in Karnataka. It is said that

about 50 percent of bore wells have become defunct. Hand pumps have

been fixed for about half of the remaining number of bore wells and the rest


C H A P T E R - 1 2 are having power pumps. This system has proved to be beneficial in Maidan

areas. But, it may be noted that the usefulness of bore wells is not much in

coastal and Malnad areas. In places where there is no habitation bore wells

are of zero utility.

12.4 As per recent reports, water table has gone down and floride content

in bore well water has gone up. Overall, this scheme has not been very

beneficial.

12.5 Later, the system of providing drinking water through Mini Water

Supply schemes was introduced. It is said that there are 3,52,582 MWS in

Karnataka. Under this scheme, a motor pump is fixed to a bore well, water

is stored in a ground level tank and supplied through taps. This also, was

able to provide some relief in Maidan areas of Karnataka. In Malnad and

Coastal areas this scheme was not much useful. Since water meters are not

fixed, misutilisation is rampant. Because of this, Grama panchayats have

to bear the burden of huge electricity bills.

12.6 If drinking water is supplied through public taps instead of fixing

water meters to individual house connections, apart from misutilisation,

poor people are subjected to hardship. As such, each house should be

provided with tap connection. Meter should be fixed and water tax should

be collected. This will also regulate the use of electricity. But, in most of the

Gram Panchayats, vested interests are coming in the way of fixing water

meters. The Government has to issue instructions to remove all public taps

and compulsorily provide tap connections to each house. In Udupi district,

on fixing water meters, there is reduction up to 60 percent in the power bills

in some Grama panchayats.

12.7 Owing to constant efforts during the past one year, most of the

Grama Panchayaths in Udupi district have successfully fixed meters for


C H A P T E R - 1 2 house tap water connections. This has regulated water consumption. The

Commission has observed that collectively, there is a saving of about Rs. 50

lakhs for Gram Panchayats in electricity charges. This is a commendable

achievement. This model may be emulated by all GPs. The Government has

to initiate action in this regard. The Commission recommends accordingly.


CHAPTER – 13

House sites and Housing in Rural Areas

13.1 After so many years of independence, even now, there are people in

our country, especially in Karnataka, who do not own a piece of land for

house construction. It is rather unfortunate to note that many people do not

have even a hut for shelter. In Karnataka itself there are lakhs of people

who are houseless. However, accurate data is not available. Various

Departments provide different figures. The TSFC has made efforts to collect

data through questionnaires sent to all Grama Panchayats and Urban Local

Bodies. But could not succeed in obtaining full information. As per the

statistics available, there are 10,43,719 site less persons and 12,10,720

house less persons in Karnataka (as per 2003 data).

13.2 It is most essential to prepare the list of siteless persons. In

Karnataka, some confusion has cropped up due to diversity in land

classification. Land classification in coastal and Malnad areas is different as

compared to other areas. Housing scheme has to be designed accordingly.

In Maidan areas, the “gram tana” land falls within the Grama Panchayat

and all the people of a village reside in gram tana area. Identified site less

persons are to be provided house sites by Gram Panchayats in gram-tana

area. Gram tana area does not belong to Revenue department. Whereas, in

coastal and malnad areas, all lands belong to Revenue Department. Lands

that are not converted and lands that cannot be considered as converted–

are classified as agricultural lands. In view of this, the task of identification

of site less is that of Grama Sabhas and site distribution work is with the

Revenue Department. Houses can be provided only after site less persons

are identified and title deeds are issued. As such, it is necessary to prepare

the list of site less persons and sites are provided on priority through the

Revenue Department.


C H A P T E R - 1 3

13.3 There are two types of people under site less category – those who

have applied for house sites and those who have not applied. The Ward

Sabhas and Grama Sabhas should identify them and prepare the list. But,

due to dereliction of duty on the part of Panchayats and negligence of

officers, correct lists of siteless are not forthcoming. The Third State

Finance Commission has sent a circular to panchayats in this regard, giving

proper guidance.

13.4 The following comprise the list of persons who have applied for sites:

1. Persons who have filed applications in Form 50 under Akrama-

Sakrama scheme

2. Persons who have filed applications in Form 53 under Akrama-

Sakrama scheme.

3. Persons who have filed applications under 94C.

There are many applications under the above scheme which are yet to

be decided. Many applications have been rejected. There is a necessity to

re-consider all such cases. Necessary amendments are to be made to the

Revenue Laws.

13.5 Many siteless persons have not filed applications due to ignorance.

They may be classified as below:

1. Persons who are residing in Government lands.

2. Persons who are residing in Government revenue lands

3. Persons who have encroached upon forest land and residing there

4. Persons residing in “Gomalas”.

5. Persons residing in non-government lands.

6. Persons residing roadside on National Highways and State High

Ways.

7. Persons residing in others’ lands as agricultural labourers or doing

other work.


C H A P T E R - 1 3

13.6 Grama Sabha has to identify such siteless persons and prepare a list

on priority. Suitable directions have to be issued accordingly. The list of site

less persons has to be sent to the Revenue Department. Law has to be

suitably amended so as to enable the government to sanction of sites at the

same places where they are presently residing or at a nearby place.

13.7 Sites may be distributed to the siteless persons residing in private

lands with the consent of the land owners or else, land owners may be

prevailed upon to provide sites at a nearby place. If they do not agree,

required extent of land may be acquired to provide house sites.

13.8 Government should issue orders to provide house sites on a war

footing. Title deeds should be issued after allotting sites. Construction of

houses should be taken up thereafter, in a phased manner. All site less

persons and houseless persons should be compulsorily covered under

various existing schemes over a period of 2-3 years. And this is the bounden

duty of the Government.


CHAPTER – 14

Activity Mapping for Panchayats

14.1 Consequent upon the 73rd and 74th Amendments to the Constitution,

the functions of Panchayat Raj Institutions are determined in Article

243(w). Government of Karnataka, vide Karnataka Panchayat Raj Act, 1993

has distributed activities among the three tiers. The activities assigned to

Grama Panchayats, Taluk Panchayats and Zilla Panchayats are listed in

Schedule I, II and III respectively.

14.2 The experience in the past 15 years has shown that there is

overlapping of activities and this has caused several problems.

14.3 While assigning activities to the three tiers of PRIs, it is essential to

bear in mind the following points:

1. The appropriate level at which a work can be done has to be assessed

and if a work can be done at a particular level it should be entrusted

to that level.

2. A work that has to be done at a higher level should not be entrusted

to lower levels.

3. A work that has to be done at a lower level should not be entrusted to

higher levels.

4. Distribution of activities should be specific.

5. The panchayat for which an activity has been assigned, to be made

totally responsible and accountable for the same.

14.4 The present Activity Mapping, which distributes the activities among

the PRIs is not comprehensive and has created confusion in many

circumstances. It is opined that responsibilities of the three tiers are not

specific. In view of this, it is necessary to re-do the activity mapping.


C H A P T E R - 1 4

14.5 I. Activities that may be assigned to Gram Panchayats

1. Selection of beneficiaries pertaining to all beneficiary oriented

schemes/programmes.

2. Supply of Drinking Water, Providing Street Lights etc.,

3. Rural sanitation

4. Supervision of the activities of Anganwadis and Primary Schools.

5. Supervision of the work of Primary Health Units.

6. Animal Husbandry Sector – Veterinary clinics, cattle breed

development programme.

7. Waste land utilisation, timely supply of seeds, fertilizers and

pesticides for Agriculture and Horticulture.

8. Implementation of programmes pertaining to Women and Child

Welfare.

9. Identification of houseless and siteless persons.

10. Other important matters related to rural life.

14.6 II Activities that may be assigned to Taluk Panchayats

1. House Construction Programme.

2. Major Taluk roads and bridges – construction and maintenance.

3. Maintenance of Higher Primary School buildings.

4. Superintendence of all poverty alleviation programmes.

5. Incentive and subsidy programmes of Agriculture, Horticulture,

Animal Husbandry and Fisheries Departments..

6. Providing infrastructure facilities through Taluk level Co-

operative societies.

7. Minor Irrigation Works – implementation and maintenance.

8. Superintendence over Gram Panchayat Programmes.

9. Human Resources Development


C H A P T E R - 1 4

14.7 III. Activities that may be assigned to Zilla Panchayats:

1. Water Supply – Plan preparation and implementation.

2. District Roads and Bridges – Construction and maintenance.

3. Implementation of medium irrigation schemes – providing water

for agriculture.

4. Rural electrification.

5. Matters pertaining to Education upto High School - maintenance

of high school buildings.

6. Rural housing schemes.

7. Encouragement for agriculture, horticulture, afforestation and

inland fisheries, waste land utilization, loans to farmers,

fishermen and those involved in dairy activities.

8. Providing house sites to the houseless identified by Gram

Panchayats.

9. Supplementary activities pertaining to the development of the

district.

10. Superintendence over Gram Panchayat and Taluk Panchayat

programmes.

14.8 With these changes to the Activity Mapping for the three tiers of

Panchayats, responsibilities also gets distributed.


CHAPTER – 15

Suggestions for better utilisation of grants provided to Panchayat Raj Institutions.

15.1 Funds earmarked by the Government for implementation of some

schemes are meagre amounts. Even those amounts are being released in

instalments. As a result, Panchayat Raj Institutions are not getting

sufficient finances. It is recommended that such schemes and programmes

be merged with those which are more beneficial.

15.2 During discussions, the TSFC was given to understand that there is

no effective control over the authorities/officers who spend money released

for certain specific programmes.

15.3 If funds being provided to Gram Panchayats are released in two

installments instead of four, it can be better utilised. Likewise, based on

seasonal requirements, more funds have to be released to Taluk and Zilla

Panchayats. It is essential to release required funds to Agriculture and

Horticulture Departments in advance. Under these circumstances, the

Government and PRIs have to reserve funds and release as per requirement

of specific schemes. In respect of schemes wherein Plan grant is less than

Rupees one crore, the release may be in two instalments. If the grant

amount exceeds one crore rupees, the same may be released in three or four

instalments.

15.4 The Commission recommends that Chief Executive Officer of ZP

should have the power to reappropriate upto 10 percent of grants estimated

to remain as unspent, from one sub-head to another sub-head within the

same Major Head of Account. Likewise, he should have powers to

reappropriate upto 10 percent of funds from one Major Head of Account to


C H A P T E R - 1 5

another Major Head with the prior approval of the Government or the Zilla

Panchayat.

15.5 Many Secretaries to Government and Heads of Line Departments,

during their interaction with the TSFC, have said that owing to delay in

according approval to the Annual Action Plan by the Zilla Panchayats and

delay in getting clearance from Standing Committees in purchase matters,

scheme implementation gets delayed. This is a serious issue. As such, PRIs

have to function in accrodance with their Business Rules.

15.6 Concerned Officers of Zilla Panchayats and Taluk Panchayats have to

take swift action to get the Action Plans approved early. Panchayat Budget

and Accounts Rules and Business Rules have to be strictly adhered to. In

case of any impediment or delay in this regard, the Chief Executive Officer

has to send a report to the Government and the concerned authorities have

to be directed to take necessary action. Action has to be initiated against

the officers/authorities who cause such an impediment or delay.

15.7 The TSFC, during its visits to districts and Gram Panchayats, has

observed that the practice of distributing the Government grants per capita

among members, is widely prevalent. This may result in schemes and

programmes becoming less useful. Therefore, the Government has to

consider this aspect seriously. All such works, wherein the estimated cost

of each work is Rs.25,000/- or more, have to be treated as a package and the

works may be got executed through the Zilla Panchayat Engineering

Division or the Karnataka Land Army or Nirmithi Kendra on Deposit

Contribution system, without any ETP Charges. Otherwise, there is every

possibility of funds provided for different schemes being spent on piece

work. The Executive Officers of Taluk Panchayats have to personally

inspect such works and certify about the quality. In order to effectively


C H A P T E R - 1 5

stabilize this system, it is necessary that the Government introduce the

Work Audit System.

15.8 25 percent of Plan Grants made available to the Zilla Panchayats and

Taluk Panchayats, amounts upto 25 percent may be reserved for “Special

Needs” and the Government may direct these bodies to utilise the same as

per their Special Action Plans. Such a system was prevalent in the

erstwhile Zilla Parishads under the nomenclature – “District Sub-Plan”.

The concerned Zilla Parishads, based on their discretion and local

necessities, used to prepare sub plans to utilise the amount. Even now,

depending upon the requirements of each district, a “Special Needs Plan”

can be formulated and implemented with the prior approval of the

Government. Initially, the Government may earmark 10 percent of the

Plan grants as per the Link Document for the “Special Needs Programme”.

Based on its success and considering the utility aspect, the earmarking may

be enhanced to 25 percent. The TSFC recommends accordingly.


CHAPTER – 16

Augmenting the resources of State Government – Some suggestions

16.1 There are 31 Integrated Multipurpose check posts in the border areas

of the State. If these are modernised and revenue leakage is plugged, it is

estimated that the state will get additional annual revenue of more than Rs.

1500 crores. The Government of Gujarat has modernised its border check

posts and its revenue has increased considerably. In this regard, M/s

Transcorp Corporation, Bangalore made a presentation before the then

Hon’ble Deputy Chief Minister and Finance Minister and senior officers.

Revenue leakage in border check posts can be plugged by adopting modern

technology. Over loaded trucks entering the State from other states may be

subjected to payment of penalty. Over loaded trucks are causing heavy

damage to State roads resulting in increased burden on the State exchequer

on road maintenance. As such, the Commission recommends to establish

multipurpose border check posts.

16.2 Excise Duty:

Presently, there is ban on sale of arrack in the State. However, illicit

liquor menace continues to exist. If this is effectively controlled, excise

revenue collection will go up. Thereby, people’s lives can also be protected.

The Government has to initiate necessary action in this regard.

16.3 Tax collection by Panchayts and Urban Local Bodies

The Commission has observed that taxes levied by Panchayat bodies

and Urban Local Bodies are not being collected fully. This has resulted in

revenue loss to the tune of hundreds of crores to these bodies. Hence,

action should be taken by these bodies to compulsorily levy and collect taxes


C H A P T E R - 1 6 (mainly the property tax). Un-authorised buildings should be listed and fine

has to be imposed.

16.4 Mining

Mining activities has to be examined on scientific basis and the

possibilities of enhancing tax may be explored. Presently, revenue to the

Government from mining activity is very megre. Very few people are getting

huge income. Necessary amendments to the existing laws may be

considered to increase the revenue.

16.5 The size of advance reservation tickets of Karnataka State Road

Transport Corporation and Bangalore Metropolitan Transport Corporation

buses may be increased so as to exhibit commercial advertisements as in the

case of Railway tickets. This will generate more revenue.

16.6 Bangalore Race Course and Golf ground are to be shifted outside

Bruhat Bangalore Mahanagara Palike limits. These lands may be utilised

for construction of buildings for locating Government offices and for other

commercial activities. This will generate revenue to the tune of thousands of

crores.


C H A P T E R – 1 7

Cadre and Recruitment Rules for Rural Development

and Panchayat Raj Department – A Necessity

17.1 In most of the State Government Departments Cadre and

Recruitment Rules are framed and implemented. Even after 60 years of

independence, the Cadre and Recruitment Rules are not systematically

framed and implemented in an important department like Rural

Development & Panchayat Raj Department. Hence, filling of posts and

promotions for various cadres in the department are not clear. Since many

years the Gram Panchayat Secretary and other Development Officers are

working in the department. There are no specific rules regarding

appointment, promotion and categorization of posts. As such, it is difficult

for them to have a vision, aptitude and ambition in performing their duties

and career growth. This has remained a problem in implementing the

programmes of the department. It is commendable to note that a sincere

attempt has been made recently to frame Cadre and Recruitment Rules for

the department. However, it is unfortunate that due to various reasons it is

yet be implemented.

17.2 Classification of Important Posts

1. Gram Panchayat Secretaries/Development Officers

2. Field level Extension Officers

3. Field Development Officers

4. Executive Officer, Taluk Panchayat

5. District level Parishad Secretary

6. District level Assistant Secretary

7. Deputy Secretary

8. Chief Executive Officer

9. Commissioner


C H A P T E R - 1 7

10. Various posts in Engineering Division of Rural Development

11. Necessary staff and officers for the above all levels.

Gram Panchayat Secretary and staff

17.3 The secretaries working in GPs are not competent enough to carry

out assigned duties and responsibilities. Many of them are promoted from

bill collectors and other posts with minimum educational qualification. It is

difficult for them to have necessary perception, knowledge and complex

aspects of Panchayat Raj Act. Government has initiated necessary action

for upgrading these posts to the grade of Deputy Tahsildar and appointing

Development Officers. It is necessary to fill up these posts through direct

recruitment and impart training on urgent basis. It is necessary, the

selected officers are trained in computer and skill development.

17.4 Bill Collectors and other staff working in GPs have minimum

educational qualification and are not trained. Most of them do not possess

the necessary knowledge and perception of development as well as

administrative skills. From earlier days they are appointed on a daily wage

basis and are given consolidated salary. Due to this they are not evincing

interest and perform their duties efficiently. The TSFC recommends that

the Government should take note of this issue urgently.

Extension Officers

17.5 During the decade 1961 Extension officers were working in the

matters related to rural development, agriculture, cooperation etc. Their

services were very useful at the field level. But in the recent decade only a

few Extension Officers are working due to reduction of the existing posts.

At GP level important schemes like National Rural Employment Guarantee

scheme, rural water supply and sanitation, Education and Health and also

women and Child Development are being implemented. In the present

context, clear understanding and perception of these schemes is not there to


C H A P T E R - 1 7

the expected level with GP secretary, staff or the concerned departmental

field officers. The implementing officers and field staff have developed the

officialdom associated with “White Collar” and lack development approach.

The necessity is felt for various Extension Officers to guide and work in

gram panchayats at hobli or taluk level. The government must incorporate

these posts in the Cadre and Recruitment Rules. The Development Officer

of a gram panchayat on promotion be made eligible for the post of Field

Extension Officer.

Field Extension Officer

17.6 There is a necessity of Filed Extension Officer at the taluk level. In

order to supervise, monitor and evaluate gram panchayats’ activities as well

as to oversee the effective implementation of various government schemes.

The post of Field Extension Officer should be included in the Cadre and

Recruitment Rules. They can supervise the duties of development Officer of

a gram panchayat and can work under Taluk Executive Officer.

17.7 The post of Chief Executive officer can be filled up from the senior

level officer of Rural Development or Indian Administrative Service or

Karnataka Administrative Service cadre. There is a necessity of separate

Directorate and the Commissioner can be appointed from the IAS cadre in

the level of Secretary to Government. Rules may be framed for promoting

officers from different categories for filling the posts like Parishad

Secretary, Assistant and Deputy Secretary, Director and other posts.

Necessity of a separate Directorate

17.8 In the Rural Development and Panchayat Raj department, there is a

necessity to create a separate directorate. For the effective implementation,

proper monitoring and evaluation of various schemes of the government

separate directorates have been created in other departments. Even in the

Revenue Department the Divisional Commissioners are now working as


C H A P T E R - 1 7

Regional Commissioner performing a very responsible job. However in the

Rural Development and Panchayat Raj Department the officers are working

at the secretariat level. TSFC feels that, in the present set up of vast Rural

Development programmes and Panchayat Raj activities it would be difficult

to undertake proper supervision. It would be difficult for the officers at the

State level to visit district, taluk and villages to inspect and impart proper

gruidance. They stay at the State Headquarters attending meetings and

discussions. Hence the TSFC is of the opinion that they will not have time

for field monitoring, supervision and guidance.

17.9 It is appropriate to appoint a Commissioner of the level of Secretary

to Government for Rural Development Department. Senior Grade Officers

may be promoted and posted as Additional Commissioner and Joint

Commissioner to assist the Commissioner. It is necessary for the

Directorate to check the accounts of panchayat raj institutions and directly

supervise and monitor the performance, followup action required legally.

17.10 The details of the field activities of various departments should be

brought under the Directorate. It is the opinion of the TSFC that it is

possible for the officers at the secretariat level to effectively examine and

review the policies of the Government.


C H A P T E R – 1 8

Introduction of Ombudsman

18.1 It has not been possible to rectify the defects in the functioning of

Zilla Panchayats and Taluk Panchayats. It has not been possible to review

the work of all the Grama Panchayats in a district, identify cases of

misappropriation and initiate quick action against defaulters. Funds made

available to a Grama Panchayats under various schemes are kept in the

joint bank Account of the Adhyaksha and the Secretary. Many cases of

misappropriation of grants have been registered. There is lot of delay in

bringing such cases to the notice of higher officers. Further, the process of

enquiry takes several months or years by which time the culprits may

escape punishment. Since there is no proper monitoring and evaluation of

grants being provided to Panchayat Raj Institutions, accountability is poor.

There is a provision to initiate disciplinary action against the officials

working in Panchayat Raj Institutions. However, cases wherein action is

initiated against elected representatives for misuse of funds and

punishments imposed are very rare. As such there is a possibility of elected

representatives taking advantage of the loopholes in the system.

18.2 Hence, it is imperative that system of Ombudsman is introduced in

Karnataka having jurisdiction over the Panchayat Raj Institutions and

Urban Local Bodies. Ombudsman will look into the aspects of procedural

irregularities in implementation of schemes/works, holds an enquiry and

initiates necessary action. The following points may be considered in the

proposed Ombudsman system:

1. Regional Commissioner may be appointed as Ombudsman at the

divisional level. He can look into the matters of Zilla Panchayats, City

Municipal Councils and City Corporations.


C H A P T E R - 1 8

2. Deputy Commissioner may be appointed as Ombudsman at the district

level. He may be entrusted with matters pertaining to taluk

panchayats and Town Municipal Councils.

3. Assistant Commissioner may be appointed at the taluk level to oversee

the matters relating to gram panchayats and Town Panchayats.

4. Ombudsman should work independently.

5. Ombudsman should be given powers of tribunal.

6. Ombudsman should be assisted by a team comprising of

administrative, accounts and technical staff.

7. His duties should be specific. Required funds should be made

available.

8. Procedures and systems should be developed to carryout decisions of

Ombudsman.

Powers and Facilities

18.3 Since the officers proposed to be appointed as Ombudsmen are

already working as Magistrates at different levels, their enquiry and

judgment will be quick and effective. They are well versed about the

functioning of Panchayat Raj Institutions and Urban Local Bodies.


C H A P T E R – 1 9

Public Awareness, People’s Participation and Citizens Charter

19.1 The success of administrative decentralisation and efficient

functioning of local bodies depends on people’s understanding, awareness

and vigilance.

19.2 It is opined that even after sixty years of independence, rural

intellectual citizens do not have full understanding of the purpose, working

methods, execution of programmes, implementation of Plans, maintenance

of accounts, duties and responsibilities of officers and elected

representatives of local bodies. For this reason, the general public does not

have a clear view about the people’s rights, duties and responsibilities. In

the democratic system, it is essential to create proper perception among the

general public that democratic administrative system is based on the

principle of government by the People, of the people and for the people. A

clear understanding of the local body’s functioning and benefits is

necessary. Public has to be educated about the benefits and plan

implementation process of these bodies. Hence, the TSFC recommends that

a public awareness campaign be taken up on the following aspects:

1. The constitution, functions and working methods of Panchayat raj

institutions and urban local bodies.

2. The objectives of Central and State Government schemes,

guidelines, grants and programme implementation.

3. Benefits available under various schemes/programmes,

identification and selection of beneficiaries and decisions there of.

4. Details of works taken up, release of grants, and utilisation under

Central and State Government schemes.


C H A P T E R - 1 9

5. Finances, maintenance of accounts, Audit and expenditure

particulars etc. of local bodies.

6. Suggestions, instructions and orders of higher authorities and the

government.

7. Action plan details and time table for implementation.

8. Budget details and Annual receipt and expenditure statement.

9. Guidelines and procedures for different schemes implemented by

local institutions.

10. Annual Plan target and achievement.

19.3 Public awareness should be created through Grama Sabha and Ward

Sabha, Sign Boards, Pamphlets and media advertising. Awareness

programmes have to be organised involving local associations, Self Help

Groups, Non- Governmental Organisations and citizen forums. For the

effective implementation of this programme, the TSFC recommends that a

separate head of account be created by the Government and funds are

released along with suitable instructions.

19.4 The TSFC opines that participation and co-operation of local

organisations, Youth Associations, Women’s Associations, service

organisations and Citizens Associations like Janagraha is essential. This

will strengthen local bodies resulting in increased awareness and vigilance.

The local elected representative should construe this as a tool for effective

development not view it as interference.

Implementation of Citizens’ Charter:

19.5 Local Bodies are providing basic civic services in their respective areas

viz., drinking water, street lights, roads, underground drainage, sanitation

etc. To ensure quality and better services these bodies should publish a

Citizens’ Charter every year and give vide publicity. Village wise/ward


C H A P T E R - 1 9

wise meetings should be held at least once a month and grievances should

be heard. Opinions and suggestions are to be obtained and follow up action

should be initiated. Citizens’ Charter is in vogue in Bruhat Bangalore

Mahanagara Palike, Transport department and other institutions. The

TSFC recommends that on similar lines, Citizens’ Charters for Panchayat

Raj institutions and other Urban Local Bodies should be published and the

following subjects and methods be incorporated:

1. Schemes and programmes likely to be implemented by a local body

in the current year.

2. Finances available for the current year

3. Benefits provided by different departments under Panchayat Raj

4. Preparation and implementation of Action plan of the local body.

5. Measures to be taken regarding Action Plan.

6. Every month, on a specified day (every third Saturday) the elected

representatives of the respective constituency should be invited for

citizens meet the programme and obtain suggestions and opinions.

7. Follow up action should be initiated as per the discussions held in

such meetings.

8. Programme list of such meetings should be prepared and published in

advance to enable the general public to participate.

9. If possible, MLAs and MPs of the constituency should be invited as

special invitees.

10. Senior officers concerned should actively participate in such

meetings.


C H A P T E R – 2 0

Effective Supervision and Monitoring of Activities of Panchayat Raj Institutions – A Necessity

20.1 Panchayat Raj Institutions are implementing many developmental

schemes and programmes. In the decentralization system of governance,

these institutions have the responsibility of working independently. But, it

is felt that effective supervision and monitoring of the activities of these

institutions is a necessity.

20.2 In most of the districts where the TSFC visited, elected

representatives of these institutions have sought for more funds and

powers. But, their duties, responsibilities, transparency and accountability

in implementation of programmes are also necessary components. At the ZP

level, Chief Executive Officer, Chief Accounts Officer, Chief Planning

Officer and Deputy Secretary are required to undertake periodical

verifications regarding programme implementation, accounts maintenance,

duties and responsibilities of GPs and TPs and proper administrative action

should taken. But, in the present situation this is not being effectively done.

20.3 Many schemes are being implemented at the ZP level. Effective

implementation of these schemes needs verification and fixing responsibility

and taking administrative actions should be followed strictly. For many

reasons, misutilisation of funds and programme implementation is not

being done properly. The officers are not independently taking up

administrative actions. Timely action on local audit is also not being done.

Many instances of delay and soft approach on misutilisation are noticed. A

proper and effective independent verification system is very much essential.


C H A P T E R - 2 0

Supervision of the Activities of GPs

20.4 GPs are taking up works related to central and state programmes and

from their own resources. Proper implementation, adoption of transparency

rules, quality verification and accounts maintenance are very important.

Although, the Executive Officer of TP has powers to supervise the activities

of all the GPs of taluk, in view of large number of activities and works it is

difficult for him to exercise these powers. As a result, instances of

misutilisation is increasing in GPs. As the finances of GPs are maintained

in a joint account by the Adhyaksha and Secretary of GP, misutilisation of

funds are being recorded before it is brought to the notice of higher level

officers. Time would have also been lost by the time it is found out by the

local audit. Even after this, un-necessary delay in taking legal actions has

also come to the notice of TSFC.

20.5 In view of these facts, TSFC has noticed that in the present system,

effective supervision and monitoring is not being done. The following

measures are recommended for correcting the errors:

1. All the financial transactions should be brought to the notice of

Accounts Superintendent of TP on the same or on the next day.

2. Accounts Superintendent should verify the accounts and cases of

unclear and doubtful nature should immediately be brought to the

notice of Executive Officer of TP.

3. The Executive Officer of TP should depute a responsible officer to the

GP for verification and reporting the same to him.

4. Based on the report of this officer, further necessary action should be

initiated. Cases of serious irregularities and misuse of funds are to be

brought to the notice of the Chief Executive Officer and Chief

Accounts Officer of the Zilla Panchayat.


C H A P T E R - 2 0

5. The Executive Officer and the Accounts Officer of the Taluk

Panchayat should take up periodical review of such cases and send an

action taken report to the CEO and CAO of ZP.

6. The Executive Officer of the TP, along with his accounts and

technical staff, should visit at least ten GPs every month, inspect

works and check the accounts. Observations should be recorded in the

GP registers. Inspection notes should be regularly consolidated and

follow up action should be taken.

7. The CEO and CAO of the ZP should visit the TP offices every month

and review this.

8. All these issues should be monitored at the ZP level.

9. If necessary, reports may be sent to the Government.

Supervision of Taluk Panchayat activities

20.6 TP activities mainly comprises of human resource development and

maintenance aspects. Apart from release of funds for education, health,

sanitation and other activities, proper utilisation of funds and maintaining

the quality should be ensured. In addition, supervision of the activities of

GPs and maintenance of accounts are the responsibilities of the EO of TP.

TP also has the responsibility of supervision and providing guidance in

agriculture, rural development, animal husbandry, minor irrigation and

watershed area development sectors.

20.7 In the present system, the EO of TP is unable to bear the huge

responsibilities and perform multifarious functions. As such, there is a need

to appoint BDOs and Extension Officers to speed up programme

implementation and to ensure effective supervision. Earlier, under the

banner “Community Development Scheme”. Gram Sevikas, Extension


C H A P T E R - 2 0

Officers and BDOs use to function very efficiently. In the present system,

there are no officers to guide the GPs. Likewise, there is a need to

coordinate the work of officers of different departments. It is a tough task

for the ZP CEO and Other district level Officers to supervise all this.

Hence, a “Nodal Officer” for each taluk has to be appointed. District

Officers may be appointed as Nodal Officers. These Officers, in addition to

their regular work, have to undertake field visits and supervise the

activities of TPs.

20.8 The TSFC is of the view that a “Task Force” under each TP may be

constituted to oversee the activities of GPs and GP accounts.

Supervision of Activities of Zilla Panchayats

20.9 Programme implementation by ZPs and its supervision is far from

satisfactory. Presently, the Directors in the Rural Development and

Panchayat Raj Department (RDPR) are directly monitoring the work of

ZPs. Since they have to perform their regular secretariat functions, they

are not in a position to review programme implementation and work of field

level officers effectively. As such, these directors are unable to provide

proper guidance to subordinate officers. Hence, there is a need to create a

separate Directorate for the RDPR Department on similar lines as that of

Directorate of Municipal Administration. An Officer of the rank of

Secretary to Government may be appointed as its Commissioner. Necessary

support may be provided by appointing senior officers of the RDPR Dept.

The subject of creation of a separate Directorate for RDPR is dealt with

separately.


C H A P T E R - 2 1

Functions and Problems of Urban Local Bodies

21.1 Urbanization is taking place through out India due to population

growth and migration to urban areas. As the cities grow, providing basic

facilities like housing, water supply, roads, drainage and sanitation becomes

a challenging task. Central and State Governments are continuously trying

to find a solution to this challenge.

21.2 Town Panchayats, Town Municipal Councils and City Municipal

Councils in Karnataka are governed by the Karnataka Municipalities Act,

1964. Whereas, City Corporation in Karnataka, are governed by the

Karnataka Municipal Corporations Act, 1976. In this chapter and in the

next chapter, an attempt has been made for suggesting solutions to the

problems faced by the ULBs.

Karnataka Municipalities Act, 1964

Objectives

21.3 The municipal councils in the state were governed by seven different

enactments in different areas and in order to have a uniform law in the

entire state this Act was introduced. This Act governs both town

municipalities and city municipalities as the provisions are similar. The Act

embodies the principal features of the enactment in force at present.

However, a separate enactment was passed in 1976 in respect of City

Municipal Corporations called the ‘Karnataka Municipal Corporations Act,

1976’.


C H A P T E R - 2 1

Main Features of Karnataka Municipalities Act, 1964

21.4 Town Panchayats

Section 349: Town Panchayats are constituted as per provisions of section 3 of Karnataka Municipalities Act, 1964

Section 3(a): population

Section 3(b): density of population

Section 3(c): local revenue generated for local administration

Section 3(d): percentage of employment in non-agricultural activities

Section 3(e): economic importance of such area

Section 3(f): such other factors as may be prescribed

Population

1. Between 10,000 and 20,000

2. Density of population - Not less than 400 persons per sq. kms

3. Not less than 50% of the population should be non-agriculturists

The above mentioned areas are separated and declared as Town

Panchayats.

Section 351 – Constitution

Section 352 – Constitution and Election

a) not less than eleven and not more than twenty Councilors

b) not more than three persons are nominated members – experienced persons having knowledge of administration and social workers [no right to vote]

c) the members of House of the people and the members of the State Legislative Assembly, representing a part or whole of the transitional area whose constituencies lie within the transitional area; and

d) the members of the Council of States and the members of the State Legislative Council registered as electors within the transitional area:


C H A P T E R - 2 1

Section 353 –Power to extend provisions of this Act to TP area.

Section 354– Consequence of the applications of the Act to TP area.

Section 355 – Effect of absorption of panchayat area into TP area.

21.5 City Municipal Councils and Town Municipal Councils in Karnataka

Constitution

1. Elected representatives: TMC - CMC

Population in urban area No. of Members.

20,000 - 40,000 - 23

40,000 - 50,000 - 27

50,000 - 1,00,000 - 31

1,00,000 - 3,00,000 - 35

2. Five persons are nominated members - nominated by government (voting power)

3. Local Legislators

4. Local Members of Parliament

5. Reservation for SCs/STs proportionate to their population and 1/3 seats reserved for women.

Section 13: Wards for elections

Section 42: Election of President and Vice-President [Reservation also provided]

Section 43: Functions of President are explained in this section

1. Preside at all meetings of the Municipal Council

2. Watch over the financial and executive administration of the

municipal council


C H A P T E R - 2 1

3. Perform all the duties and exercise all the powers specifically

imposed or conferred upon him in accordance with Act.

4. Powers to issue directions to Commissioner or Chief

Officer,to obtain necessary information and supervision of

works.

Section 45: Rights and privileges of individual Councilors and

President.

Section 63: Constitution of Standing Committees.

a) Taxation, finance and appeals

b) Public health, education and social justice

c) Town Planning and improvement

d) Accounts

The total number of members is not less than five and not more than

eleven.

Section 71(A) Subject to the provisions of Section 365 and the rules

made under Section 323, every municipal council shall

be entitled to employ such officers and servants as

may be necessary for the discharge of its duties.

Section 81: Municipal Property

Section 83: Municipal Fund

Section 84: Application of Municipal fund and property

Section 85: Power to deposit and invest surplus fund

Section 86: Power of Municipal Councils to borrow money


C H A P T E R - 2 1

21.6 Obligatory and Discretionary functions of Municipal Councils

Section 87 to 93 : Obligatory and discretionary functions of municipal councils

Section 94: Taxes which may be imposed

Section 101: Description and class of Property Tax

Section 101 A: Property Tax payable for certain years.

Section 103 : Rebate for self occupied building

Section 105: Assessment of property tax

Section 106: Preparation and publication of property tax register

Section 107: Levy of penalty on unlawful building

Section 107-A: Survey of lands and building and preparation of property register

Section 110: Tax from whom primarily leviable

Section 115: Power to assess in case of escaped from assessment

21.7 Municipal Accounts, Administration Reports and other matters

Section 286: Prohibition of Expenditure not budgeted for

Section 287: Presentation of Accounts

Section 288: Revision of Budget [with the approval of government]

Section 289: Maintenance of accounts and restrictions on expenditure

Section 290: Audit of Accounts

Section 302: Annual Administration Report

Section 302-A: Preparation of Development Plan – submission to DPC

Section 302-B: Finance Commission – Terms of Reference

Section 303: Chief Controlling Authority – Director of Municipal Administration


C H A P T E R - 2 1

Section 304: Power of inspection and supervision

Section 306: Deputy Commissioner’s power of suspending execution of orders, et cetra of municipal councils.

Section 308: Liability of councilors for loss, waste or misapplication

Section 310: Government inquiry into municipal matters.

Section 313: Power of Government to provide for performance of duties in default of municipal council

Section 316: Power of Government to dissolve a municipal council in certain circumstances

Section 323: Power of Government to make rules

Section 324: Power to make bye-laws

Section 325: Model bye-laws

Section 327: Appointment of Chief Officer

Section 329: Duties of Chief Officer

Section 330: Powers of Chief Officers subject to the control of Municipal Council

21.8 Main points of Karnataka Municipal Corporation Act, 1976

Section 108: Property tax shall be levied every year on all buildings or

vacant land or both. Tax fixation of minimum and

maximum for both Residential and Commercial

buildings and vacant land depending on location and

use.

Section 108-A: Arrears of Property Tax shall be paid on or before

31.3.2005 – Failing to pay attracts fine at the rate of two

percent per month

Section 109: Rebate for self occupation

Section 110: General Exemption


C H A P T E R - 2 1

Section 111: Property tax a first charge on property and movables

Section 112-A: Return to be submitted every year as per schedule – III

Section 112-B: Property Tax Preparation and Publication Register –

Open to public

Section 112C – Levy of Penalty on unlawful building – shall be liable

to pay twice the property tax every year – Provoked

that such levy and collection of penalty shall not be

construed as unlawful construction.

21.9 Important points of the 74th Constitution Amendment

Section 243 (P) Definitions

Section 243 (Q) Constitution of Municipalities

Section 243 (R) Composition of Municipalities

Section 243 (S) Constitution and Composition of wards committees

Section 243 (T) Reservation of seats

Section 243 (U) Duration of Municipalities

Section 243 (V) Disqualifications for membership

Section 243 (W) Powers, authority and responsibilities of Municipalities

Section 243 (X) Power to impose taxes by, and funds of the Municipalities

Section 243 (Y) Constitution of Finance Commission

Section 243 (Z) Audit of accounts of Municipalities

Section 243 (ZA) Elections to the Municipalities

Section 243 (ZB) Application to Union Territories

Section 243 (ZC) Part not to apply to certain areas.


C H A P T E R - 2 1

Section 243 (ZD) Committee for District Planning

Section 243 (ZE) Committee for Metropolitan Planning

Section 243 (ZF) Continuance of existing laws

Section 243 (ZG) Bar to interference by Courts in electoral matters.

21.10 As per Constitution 74th amendment, to enable municipalities to

function as local self governments and for economic development, social

justice and perform municipal functions 19 functions have been as

prescribed in the 12th Schedule.

21.11 As per section 87 and 91 of Karnataka Municipalities Act, 1964, the

ULBs excluding [City Corporations] perform obligatory and discretionary

functions. In a similar way as per Sections 58 and 59 of Karnataka

Municipal Corporations Act, 1976 City Corporations perform obligatory and

discretionary functions.

21.12 Some of the obligatory functions of Urban Local Bodies are as below;

1. Lighting public streets, places and buildings

2. Sanitation

3. Supply of drinking water

4. Registering births and deaths

5. Construction and maintenance of roads and drains etc.

Some of the main discretionary functions are as below;

1. Maintenance and establishment of public parks

2. Maintenance of public library

3. Constructing, establishing of homes for the disabled and destitute persons etc.

21.13 A cursory look at the district-wise population reveals that Bangalore

district has the highest urban population [88.11%] and Kodagu district has


C H A P T E R - 2 1

the lowest urban population [13.74%]. The population in urban area is

27.81% in India and in Karnataka 33.98% live in urban areas.

21.14 It is very important to understand the facilities to be provided by

Urban Local Bodies and the problems faced by them. The main basic

facilities to be provided by Urban Local Bodies are housing, Drinking water,

Street lights, Sanitation, Drainage system, sanitation, Disposal of solid

waste, Public toilets, Roads, Market facilities, Bus stands facilities.

21.15 Housing: Slums are increasing as there is no proportionate housing

facility for urban migrants. Housing problem is increasing day by day due to

growth in urban population and migration. Hence, there should be a

planned growth of towns and it is essential to increase housing facilities.

Lack of proper living space for the migrant labourers has forced them to live

in slums. In view of this, unauthorised slums are mushrooming in cities. To

solve this problem ULBs should construct multistoried buildings in a

planned way. These buildings should be self reliant units with all the

required facilities. The Government should take the requisite measures to

stop growth of slums.

21.16 Drinking water: Faulty distribution of water supply is creating

scarcity of water. In this direction, it is necessary that lakes are protected

and maintained. Rain water harvesting seems to be a better alternate

system. Installing water meters is essential for proper use of water.

Stringent action against unauthorised as well as unlawful use of water is

inevitable.

21.17 Street Light: In view of shortage of electricity, use of alternate

sources of energy is apt. The use of solar energy for street lighting is the

most possible effective way. It is worth while thinking about harvesting

wind power energy for street lighting.


C H A P T E R - 2 1

21.18 Underground drainage: Even now many towns in the State do

not have underground sewerage system. The Government should give

additional grants to provide under ground drainage to all the urban areas.

21.19 Solid Waste Management: It is very essential to implement solid

waste management system in urban areas. Many urban areas have shown

the possibility of adopting advanced scientific methods for solid waste

management. It is to be noted that solid waste management is not being

done properly in Karnataka. Prescribed guidelines should be adhered to, in

order to achieve better standards in solid waste management.

21.20 Public Toilets: It is not necessary to point out that public toilets

are very essential in ever growing urban areas. Every day people from other

places visit urban areas for different purposes. For such people and women

in particular, toilets are essential. Even the existing toilets are not properly

cleaned. Now a days non governmental organisations are constructing ‘pay

and use’ toilets for public use. It is essential to encourage private

organisations to construct public toilets in important commercial centres

and bus stands. It is utmost essential to construct and maintain toilets in

public places.

21.21 Bus Stand: It is observed that in many towns and cities buses are

parked in the middle of the road. Because of this, there is a traffic

congestion and sometimes accidents also happen. It is very essential to

construct Bus stand at a convenient place. Fees could be collected from the

bus owners for maintenance of bus stand.

21.22 Roads: In Karnataka State, many urban areas do not have well laid

quality internal roads. There are no drains on either side of the road. The

roads in urban areas become unusable very quickly because of high density

of traffic. Hence, it is necessary to lay good quality roads with scientific


C H A P T E R - 2 1

modern technology. Drains on roadside should be laid on a priority basis to

enable the rain water to flow. It is necessary that the Government should

devolve additional funds for this purpose.

21.23 Shortage of technical and administrative staff in ULBs:

Shortage of administrative and technical staff is extensive in ULBs. In

many ULBs sanctioned posts are not filled. Since 2-3 years, the devolved

grants have not been utilised because of shortage of technical staff.

Consequently, almost all the works are stagnant. Other than this, many of

the sanctioned posts in other category are still vacant. As a result, day to

day developmental works are affected. Hence all these posts need to be filled

up.

21.24 The quantum of grants received by ULBs is increasing every year.

Present technical and other staff is not sufficient to utilize these grants

completely. Hence, TSFC recommends for creation of additional posts of

officers, technical and other staff.

21.25 In Madikeri CMC, against 49 sanctioned posts, 42 posts are vacant.

This situation is prevailing in other ULBs also. Hence, TSFC recommends

filling up of vacant posts and creation of additional posts of officers,

technical and other staff.

Technical and Administrative Staff

21.26 Since 2006-07, State Government is transferring funds to ULBs for

implementation of various schemes. With additional technical and other

staff these funds could be utilised more efficiently. These funds could be

utilised for development and improvement of infrastructure like providing

safe drinking water. Thereby, lapse of funds could be avoided and better

services could also be provided to the users. The details of additional staff

required are given in the next paragraph.


C H A P T E R - 2 1

21.27 One post of Assistant Executive Engineer and one post of

Commissioner to look after all the administrative related matters may not

be sufficient. Sanction of additional posts of officers and staff is essential.

All vacant posts should be filled up for effective administration and to take

up urban reforms. Following additional posts should be created;

Designation ULBs with a Budget of more than 10 crores

ULB with a Budget Rs.5 to 10 crores

I Administration Division

1) Chief Officer – 1 1) Chief Officer – 1 1) Chief Officer – 1

2) Revenue officer -1 2) Deputy Chief Officer – 1 2) Deputy Chief Officer – 1

3) Administrative officer – 1 3) Revenue officer – 1 (For every one lakh population)

3) Revenue officer – 1 (For every one lakh population)

4) Accountant - 1 4) Administrative officer – 1 4) Administrative officer – 1

5) Assistant Health officer – 1 5) Assistant Health officer – 1

6) Accountant – 2 (One person for Receipt Section

and one for expenditure section)

6) Accountant – 2 (One person for Receipt Section

and one for expenditure section)

II Technical Division:

1) Assistant Executive Engineer – 1



2) Assistant Engineer -1 2) Assistant Engineer -2 2) Assistant Engineer -2

3) Junior Engineer – 1 A) One Development Officer A) One Development Officer

4) Junior Engineer – 1 (Electrical)

B) a. Water Supply B) a. Water Supply

b. Electricity b. Electricity

5) Environmental Engineer– 1 c. Environment c. Environment

d. Maintenance Engineer for CMC

d. Maintenance Engineer for CMC

e. Maintenance of municipal building

e. Maintenance of municipal building

3) Assistant / Junior Engineer – 8 3) Assistant / Junior Engineer – 6

a. Water Supply – 4 a. Water Supply – 2

b. Maintenance of buildings – 1 b. Maintenance of buildings – 1

c. Maintenance Streetlights – 1 c. Maintenance Streetlights – 1

d. Building permission & for other works – 1

d. Building permission & for other works – 1

e. Environment Engineer – 1 e. Environment Engineer – 1


C H A P T E R - 2 1

21.28 Reform Measures for ULBs

1. There is lack of comprehensive and consistent municipal finance

database. There is an imperative need to develop a robust database

for municipal finance and the same may be made public on a regular

basis. In the absence of reliable data source for the ULBs, accurate

plan and innovations cannot be framed. For this, National Municipal

Accounting Manual may be adopted and enabled for developing an

online Municipal Finance Information System.

2. During the early 1960s the Zakira Committee had estimated the

resource requirement of municipal services. Therefore, there is a

strong case for estimating the costs of municipal services. Estimates

of expenditure to be incurred by state governments and local bodies, a

share in the divisible pool of resources may be considered instead of

Adhoc grants.

3. In order to improve municipal amenities provided by ULBs, they need

to be made professional institutions. They have to play a specific role

in reducing the unbalanced growth of urban areas.

4. There is a need to specify the amount required and the expenditure to

be incurred for providing basic services and as to which are the

resources to be devolved to lower level governments.

5. A simple distributive formula that gives due weights to needs, rights

to minimum basic services, incentives to performance etc is

important. Unnecessary expenditure needs to be reduced and

judiciously funds should be utilized for developmental works. ULBs

should adopt best practices and new methods.


C H A P T E R - 2 1

6. There is no inbuilt freedom in devolving grants. Hence the lower level

government should gradually increase tax effort and encompass new

revenue collection avenues, project loan and public donations etc.,

7. Impact fee are one time charges levied by local governments to pay for

public infrastructure required for new developments. They are

imposed as a condition for approval to proceed with development.

8. Revolving Loan Funds – These funds are established with specific

amount of Central and/or State funds for clearly desired purposes.


C H A P T E R – 2 2

Bruhat Bangalore Mahanagara Palike

22.1 Bangalore is the fastest growing city in the Asian Continent. While

its population was 1.7 million in 1971 it is about 6.5 million in 2008. Its

population is projected to be about 12 million by 2013. If the present trend

continues, the capital city of Bangalore is likely to reach a population of

about 20 Million in the next two decades thereafter. The area of BBMP is

756 sq.kms.

22.2 Seven City Municipal Councils, one Town Municipal council and one

hundred and eleven villages have been merged in the Bruhat Bangalore

Mahanagara Palike. The estimated total area of these 7 City Municipal

Councils , one Town Municipal Council is 530 Sq Kms. Previous Bangalore

Mahanagara Palike’s area was only 226 Sq. Kms.

Composition of Bangalore Mahanagara Palike

22.3 The area of Bangalore Corporation has grown from 67.08 Sq. Kms in

1957 to approximately. 756 Sq. Kms.

Year Bangalore Urban area

limit (Sq. Kms) ULB

Population (in lakhs)

1951 67.08 BMP 7.79

1961 66.64 BMP 9.60

1971 134.42 BMP 14.22

1981 151.16 BMP 24.82

1991 - BMP 26.50

2001 226.00 BMP 45.00

2007 756.00 BBMP 56.46 Source: Census Report


C H A P T E R - 2 2

Composition of Bruhat Mahanagara Palike

22.4 Bruhat Bangalore Mahanagara Palike was constituted vide

Government Notification No. UDD/92/MNY/2006 dated.16.1.2007. As a

result, the number of wards has increased from 100 to 147. Assembly

constituencies have increased from 15 to 28.

Functions of Bruhat Bangalore Mahanagara Palike

22.5 As per Section 58 and 59 of the Municipal Corporations Act, 1976

Mandatory and Discretionary functions are performed. Some of the main

functions are:

1. Formation and maintenance of public roads

2. Solid waste management

3. Construction and maintenance of underground drainage

4. Street lights

5. Construction and maintenance of markets

6. Construction maintenance of bridges and drains

7. Maintenance of school buildings, hospitals and grave yard

8. Public recreation centers, play grounds etc.,

9. Slum Development and slum Clearance

10. Housing for the poor and workers

11. Public health and welfare

As per the above functions, works have to be taken up and to

complete the above mentioned works and schemes by 2012, it is estimated

that an amount of Rs. 25,000/- crores is required for this purpose (CRISIL

Report )


C H A P T E R - 2 2

Receipts and Expenditure of Bruhat Bangalore Mahanagara Palike

22.6 Before the formation of Bruhat Bangalore Mahanagara Palike, i.e.,

upto 2006-07, the revised estimates of Receipts and Expenditure of the

Palike was about Rs. 1217 crores and Rs. 1162 crores respectively. After the

formation of Bruhat Bangalore Mahanagara Palike during 2007-08, the

estimated revenue (revenue and capital accounts) was Rs. 3302 crores and

Rs. 3313 crores was the expenditure. As per the Budget estimates for the

year 2008-09 the estimated total receipts is Rs. 2842 crores and the

estimated expenditure is Rs. 2919 crores. The main point to be observed

here is that the revised revenue estimate is less by Rs. 1402 crores as

compared to the revised estimates of Revenue for the year 2006-07.

22.7 Resources of Bruhat Bangalore Mahanagara Palike

1. Property tax

2. Advertisement tax and licence fees

3. Grants from State and Central Governments

4. Income from other sources

Property Tax

22.8 The prominent source of revenue of Bruhat Bangalore Mahanagara

Palike is property tax. It has come to the notice of the Commission that in

many areas coming under the jurisdiction of Bruhat Bangalore Mahanagara

Palike tax is not being imposed and penalty is also not levied.

22.9 Many new areas have been merged while forming the Bruhat

Bangalore Mahanagara Palike and since details of the properties are not

available, tax and penalty are not imposed on unauthorised buildings.

There is a delay in the imposition of property tax by Bruhat Bangalore

Mahanagara Palike. There is a provision to levy penalty as per section 112

(C) of the Karnataka Municipal Corporation Act, 1976 and Section 107 of


C H A P T E R - 2 2

the Karnataka Municipalities Act, 1964. But the power to impose tax and

penalty on unauthorised buildings has not been exercised at all. As a result,

BBMP has lost crores of rupees of income. This as been significantly

observed by the TSFC.

22.10 It is mandatory to collect details of all properties and bring them

under tax net.

22.11 Classification of properties and property tax receipts & collection

details from 2004-05 to 2007-08 by BMP and BBMP are given in Annexure

20 and 21 respectively.

Year BMP Tax Collected (Rs. in crores)

2003-04 BMP 198.60

2004-05 BMP 227.25

2005-06 BMP 258.15

2006-07 BBMP 407.78*

2007-08 BBMP 488.00

* includes 7 CMCs and one TMC

Parking Facility

22.12 There are about 28 lakh vehicles in the jurisdiction of Bruhat

Bangalore Mahanagara Palike. Providing Parking facility is one of the

biggest problems faced by BBMP. The only solution to this problem lies in

creating underground / multi level parking facility in all important areas.

The TSFC recommends that special grants be made available for the BBMP

for underground / Multi level parking wherein 500 to 1000 vehicles can be

parked at a time.


C H A P T E R - 2 2

Footpath Clearance

22.13 Lot of inconvenience is caused to pedestrians because of footpath

encroachment by small vendors, hawkers, petty shopkeepers etc. Hence,

stringent measures are inevitable. For whatever reason, if this sorry state

of affairs is allowed to continue, it would be a black mark on the garden city

of Bangalore. There is an urgent need to clear the footpaths and shift

footpath vendors to an earmarked place in the respective areas. The TSFC

suggests that the Bangalore Mahanagara Palike should look into the matter

in all earnestness.

22.14 There is a need to prevent parking of vehicles on road side. Revenue

could be generated by levying penalty on vehicles illegally parked on road

side. There is an urgent need to provide basic amenities to citizens by

utilising funds as well as discretionary grants of both Central and State

Governments.

Slum Clearance

22.15 One of the functions of urban local bodies is slum clearance. This

programme has to be successfully implemented. It is very essential to look

into slum problems from the angle cited below:

1) Slums which are in existence for more than 20 years on:

a) Government land

b) Land belonging to the ULB

c) Private land

2) Slums created recently on encroached land:

a) Government land

b) land belonging to the ULB

c) Private land

d) Other land


C H A P T E R - 2 2

22.16 Land wherein slum dwellers have been living for over 20 years

should be acquired by the government and transferred to ULBs. The exact

figure regarding the families living in such places should be arrived at.

Multistoried buildings should be constructed in such places. Such

multistoried buildings should be able to accommodate four times the

number of families presently living there. The basements of such buildings

should be used for vehicle parking and shops and the income from these

should be used for building maintenance. Houses on the first floor should be

auctioned to the general public and the income from the same should be

used for construction of the building. Either single or double bed room

houses should be built in the remaining floors / storeys and distributed to

the families of the slum dwellers on priority basis. Slum dwellers who have

encroached upon recently could also be allotted the remaining houses in

the other floors. Basic infrastructure should be provided under other

schemes like JNNURM etc.

22.17 In case it is not possible to provide houses for those slum dwellers in

the place where they are living they may be provided houses in a nearby

place as mentioned above.

22.18 This system should be made applicable throughout the state. In

future, strict vigil should be kept so that no new slums come up for any

reason whatsoever. One should not be officially allowed to put up huts. If

such a thing happens it should be reckoned as an offence. ULBs should be

given strict instructions not to allow new huts (slums). Concerned officials

should be held responsible for any lapses. Construction of houses for slum

dwellers should be taken up on priority and have to be completed within a

stipulated time. The Government should issue necessary orders to ULBs in

this regard and activate them.


CHAPTER – 23

Sectoral Financial Activity of Panchayat Raj Institutions

23.1 Karnataka has been a pioneering state in establishing and supporting

Panchayat Raj Institutions; it had embarked upon a unique two-tier system

of decentralized local governance through Zilla Parishads and Mandal

Panchayats. The initiative of Karnataka in 1987 was a first in

decentralization reforms with a central theme being the creation of strong

district level local governments. Karnataka transferred all the district

sector plan schemes to these institutions which were being implemented by

the respective line departments of state government. GOK has devolved all

the functions laid down in the Eleventh Schedule of the Constitution to

the PRIs. The functions assigned to each tier of PRIs have been

incorporated in Karnataka Panchayat Raj Act, 1993. These functions

consist of many schemes and programmes related to social and economic

sectors. The financial analysis of PRIs in the preceding chapters reveals

that there are three methods of inter-governmental transfers from the

higher level government to the lower level government in the State of

Karnataka. These are:

• Assignment of taxes, fees and user charges to GPs

• Block grants to GPs

• Specific purpose grants to ZPs, TPs and GPs

23.2 In this chapter, the sector-wise distribution of funds effected by the

state government to PRIs for implementation of schemes and progrmmes

has been analyzed. The data available in the budget link document for the

financial year 2007-2008 is considered for analysis.


C H A P T E R - 2 3

23.3 During the financial year 2007-08, PRIs were provided with

Rs.2240.60 crores under plan grants and Rs.6181.14 crores under

non-plan grants. The salary component out of these grants amounts to

approximately 10% and 70% respectively. This component of the grant, a

major expenditure for the PRIs, is predetermined and non-discretionary. As

such, the PRIs are left with about Rs.2000 crores for on-going and new

programmes under plan grants and about Rs.1800 crores under non-plan

grants for items like maintenance of hostels, roads and bridges, supply of

nutritious food, payment of scholarships, et cetra.

Sectoral Non-plan Expenditures:

Diagram-23.1: Allocation of Non-plan grants to PRIs during 2007-08

1985

4069

127

3500(86%)

878(44%)

0

50010001500

20002500

30003500

40004500

ZP TP GP

Rs.

Cro

res

Non-plan Allocations Salary Component

23.4 Distribution of Non-plan grants to the three tiers of PRIs across

major sectors during the year

2007-08 is given in

Appendix-23.1. It can be

seen from Diagram-23.1 that

larger portion of non-plan

expenditure by the TPs is for

salaries (86%), whereas, ZPs

have to incur 44 percent for

salaries. Non-plan allocations

made to GPs do not have

salary component.

23.5 In Table-23.1, allocation of Non-plan grants across sectors

implemented by ZPs arranged in descending order, is given. It can be

observed that in 10 sectors, the Non-plan expenditure by the ZPs constitute

80 percent salary. Higher non-plan expenditure by the ZPs where there was

less salary component was observed in Education and Welfare of

SCs/STs & OBCs sectors which is being spent on programmes such as


C H A P T E R - 2 3

maintenance and grant-in-aid to non-government secondary schools,

maintenance of hostels, payment of scholarships and grant-in-aid to private

hostels.

Table 23.1 Sector-wise Distribution of Non-Plan grants to ZPs during

2007-08

Sl. No.

ZP Schemes/Sectors/Major Head of Account

Non-plan Allocations (Rs.lakhs)

Per cent to Total

Allocation

of which Salary

Component (Rs.lakhs)

%

1 2202 General Education 72731.46 36.64 9597.46 13.20

2 2210 Medical & Public Health 35829.56 18.05 32206.90 89.89

3 2225 Welfare of SCs/STs and OBCs 26122.92 13.16 8367.09 32.03

4 3054 Roads & Bridges 17373.00 8.75

5 2059 Public Works 11612.94 5.85 10200.35 87.84

6 2401 Crop Husbandry 6587.11 3.32 6176.00 93.76

7 2403 Animal Husbandry 6439.18 3.24 6232.71 96.79

8 2851 Village & Small Industries 5652.97 2.85 4546.45 80.43

9 2515 Other Rural Development Programmes 4661.49 2.35 1780.51 38.20

10 2402 Soil & Water Conservation 3694.39 1.86 3644.04 98.64

11 2406 Forestry and Wildlife 2234.47 1.13 1687.43 75.52

12 2702 Minor Irrigation 1680.69 0.85 321.43 19.12

13 2235 Social Security & Welfare 875.62 0.44 392.40 44.81

14 2211 Family Welfare 730.45 0.37 676.91 92.67

15 2405 Fisheries 678.78 0.34 655.04 96.50

16 3451 Secretariat Economic Services 599.03 0.30 446.92 74.61

17 2230 Labour & Employment 433.32 0.22 396.27 91.45

18 2852 Industries 328.87 0.17 295.07 89.72

19 2204 Sprots & Youth Services 262.96 0.13 173.63 66.03

Grand Total 198529.21 100.00 87796.61 44.22 Source: Link Document, GOK

23.6 It can be seen from Table-23.2 that, despite highest non-plan grants

being received by the TPs, 86 per cent of these grants are meant for

payment of salaries. TPs are left with a meager 14 percent of the non-plan

outlay for implementation of programmes/schemes. Some of the schemes

implemented out of non-plan grants are Special Nutrition Programme for


C H A P T E R - 2 3

pre-school children, maintenance of pre-matric hostels and residential

schools.

Table 23.2 Sector-wise Distribution of Non-Plan grants to TPs during

2007-08

Sl. No. TP Schemes/Sectors/Major Head of Account

Non-plan Allocations(Rs.lakhs)

Per cent to Total

Allocation

of which Salary


%

1 2202 General Education 350556.58 86.16 320783.58 91.51

2 2515 Other Rural Development Programmes 15581.84 3.83 11298.38 72.51

3 2236 Nutrition 13691.25 3.37

4 2225 Welfare of SC's/ST's and OBC's 12251.16 3.01 4486.56 36.62

5 2401 Crop Husbandry 6421.92 1.58 6305.25 98.18

6 2403 Animal Husbandry 5834.42 1.43 5831.15 99.94

7 2210 Medical & Public Health 1972.64 0.48 1267.49 64.25

8 2215 Water Supply & Sanitation 435.57 0.11

9 2501 Special Programmes for Rural Development 47.87 0.01

10 2235 Social Security & Welfare 42.55 0.01

11 2402 Soil & Water Conservation 30.55 0.01 Grand Total 406866.35 100.00 349972.41 86.02

Source: Link Document, GOK

23.7 For the first time the GPs were allocated non-plan grants (Rs.127.19

crores) during 2007-08 for meeting expenditure on establishment of

libraries and as grants under other rural development programmes.

Table 23.3 Sector-wise Distribution of Non-Plan grants to GPs during

2007-08

Sl. No.

GP Schemes/Sectors/Major Head of Account

Non-plan Allocations(Rs.lakhs)

Per cent to Total

Allocation

of which Salary


%

1 2205 Art & Culture 286.50 2.25 0.00

2 2515 Other Rural Development Programmes 12432.00 97.75 0.00

Grand Total 12718.50 100.00 0.00

Source: Link Document, GOK


C H A P T E R - 2 3

Sectoral Plan Expenditures:

23.8 As already discussed in the previous chapter, the PRIs in Karnataka

are entrusted with implementation of many programmes and schemes for

economic development and social justice. Level of functions assigned to the

three tiers of PRIs can be scaled by studying the sectoral plan expenditures.

The trends in allocation of plan funds to PRIs vis-à-vis the total plan size of

Karnataka is shown in Diagram–23.2. One can observe that the pace of

growth observed in the plan size of the state is not visible in the devolution

of plan grants to PRIs.

Diagram – 23.2 Trends in Allocation of Plan Funds to PRIs vis-à-vis

Total Plan Size of Karnataka

02000400060008000

100001200014000160001800020000

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

(Rs.

in C

rore

s)

Total Plan size of Karnataka Funds alloted to PRIs under Plan

Source: Panchayat Raj Institutions in Karnataka, Empowering Villages, Department of RDPR, GOK; Finance Department, GOK

Diagram-23.3: Allocation of Plan grants to PRIs during 2007-08

TP Rs.372.07

crores (17%)

ZPRs. 1134.17

crores(50%)

GPRs.734.36

crores(33%)

23.9 The relative share of

each tier in the plan grants

devolved during the financial

year 2007-08 is shown in

Diagram-23.3. 50 percent of

plan grants are devolved to ZPs

followed by GPs with 33

percent, whereas, TPs are at

the bottom with only 17 percent.


C H A P T E R - 2 3

23.10 Distribution of Plan grants to the three tiers of PRIs across major

sectors during the year 2007-08 is given in Appendix-23.2. The

priority/key sectors of each tier of PRIs inter alia functions assigned to them

could be studied from this data.

Priority/key sectors of ZPs:

23.11 It can be seen that two thirds of plan funds transferred to ZPs

are intended for just two sectors, viz., education and rural roads. Under

these two sectors flagship programmes like Akshara Dasoha (Mid-day

meals scheme), Sarva Shiksha Abhiyan and Mukhya Mantri

Grameena Raste Abhivrudhi Yojane (rural roads) are implemented.

The next priority sectors of ZP are rural health, welfare of women and

children and welfare of SCs, STs and OBCs. Approximately 24 percent of

plan funds given to ZPs are spent under these sectors. Most important

schemes implemented under these sectors include:

• Karnataka Health System Development Project

• National anti-malaria programme

• RIDF works

• Maintenance of Health Buildings

• State Health Transport Organisation

• Continuation of Health Centres under IPP-VIII

• Residential schools for SCs, STs and OBCs

• Navachetana Scheme

• Maintenance and Improvement of Hostels

• Starting of Residential Schools on Navodaya Pattern

• Child Welfare

Priority/key sectors of TPs:

23.12 Although Schedule II of KPR Act, 1993 provides 28 functions to TPs,

it can be seen that sectoral plan allocations made to TPs do not match with


C H A P T E R - 2 3

the functions assigned to TPs. The priority sectors are Nutrition, Welfare of

SCs, Animal Husbandary and SCP. Important schemes implemented by TPs

are;

• Pre-school children feeding programme

• Scholarship to SC students

• Pre-matric SC hostels

• Infrastructure development in SC colonies and assistance to SC

families under SCP

• Opening of rural veterinary dispensaries and their upgradation

as taluk level dispensaries

• Opening of new veterinary dispensaries in backward taluks

• For the first time during 2007-08 an allocation of Rs.78.00

crores has been made for taking up special works in 39 most

backward taluks identified by the HPCRRI

Priority/key sectors of GPs:

23.13 As per the requirement of Section 58 of KPR Act, 1993 the GPs are

required to perform certain obligatory functions. Further, it is mandated

that GPs are given grants of not less than rupees five lakhs each year

which shall be utilized for meeting the electricity charges, maintenance of

water supply schemes, sanitation and other welfare activities. As such, this

item of expenditure constitutes highest allocation of plan funds to GPs. This

is followed by allocations for housing sector for implementation of Ashraya

Housing Scheme. Three fourths of allocations are spent on these two

items of expenditure. The rest of plan grants are meant for implementing

programmes such as:

• Total sanitation campaign

• Maintenance of borewells

• State share for implementing Centrally Sponsored Schemes- NREGP, Soil Conservation and Watershed


C H A P T E R - 2 3

23.14 The foregoing analysis reveals the social sector takes the lion’s share

of plan allocations made to PRIs. At the same time, funding for the

agriculture and allied activities which is backbone of rural economy is still

controlled by higher levels of government.


Appendix - 23.1 Sector-wise Abstract of Non-Plan Grants Devolved to PRIs during 2007-08

Rs. in Lakhs

ZP Schemes TP Schemes GP Schemes TOTAL

Secto♣r Alloca tions

of which Salary

Component % Alloca

tions

of which Salary

Component % Alloca

tions

of which Salary

omponent % Allocations

of which Salary

Component %

2202 General Education 72731.46 9597.46 13.20 350556.58 320783.58 91.51 423288.04 330381.04 78.05

2204 Sprots & Youth Services 262.96 173.63 66.03 262.96 173.63 66.03

2205 Art & Culture 286.50 0.00 286.50

2210 Medical & Public Health

35829.56 32206.90 89.89 1972.64 1267.49 64.25 37802.20 33474.39 88.55

2211 Family Welfare 730.45 676.91 92.67 730.45 676.91 92.67

2215 Water Supply & Sanitation

435.57 435.57

2225 Welfare of SC's/ST's and OBC's

26122.92 8367.09 32.03 12251.16 4486.56 36.62 38374.08 12853.65 33.50

2230 Labour & Employment 433.32 396.27 91.45 433.32 396.27 91.45

2235 Social Security & Welfare

875.62 392.40 44.81 42.55 918.17 392.40 42.74

2236 Nutrition 13691.25 13691.25

2059 Public Works 11612.94 10200.35 87.84 11612.94 10200.35 87.84

2401 Crop Husbandry 6587.11 6176.00 93.76 6421.92 6305.25 98.18 13009.03 12481.25 95.94

180

ZP Schemes TP Schemes GP Schemes TOTAL

Secto♣r Alloca tions

of which Salary

Component % Alloca

tions

of which Salary

Component % Alloca

tions

of which Salary

omponent % Allocations

of which Salary

Component %

2402 Soil & Water Conservation

3694.39 3644.04 98.64 30.55 3724.94 3644.04 97.83

2403 Animal Husbandry 6439.18 6232.71 96.79 5834.42 5831.15 99.94 12273.60 12063.86 98.29

2405 Fisheries 678.78 655.04 96.50 678.78 655.04 96.50

2406 Forestry and Wildlife

2234.47 1687.43 75.52 2234.47 1687.43 75.52

2501 Special Programmes for Rural Development

47.87 47.87

2515 Other Rural Development Programmes

4661.49 1780.51 38.20 15581.84 11298.38 72.51 12432.00 0.00 32675.33 13078.89 40.03

2702 Minor Irrigation 1680.69 321.43 19.12 1680.69 321.43 19.12

2851 Village & Small Industries

5652.97 4546.45 80.43 5652.97 4546.45 80.43

2852 Industries 328.87 295.07 89.72 328.87 295.07 89.72

3054 Roads & Bridges 17373.00 17373.00

3451 Secretariat Economic Services

599.03 446.92 74.61 599.03 446.92 74.61

Grand Total 198529.21 87796.61 44.22 406866.35 349972.41 86.02 12718.50 0.00 618114.06 437769.02 70.82

181

Appendix-23.2 Sector-wise Abstract of Plan Grants Devolved to PRIs during 2007-08

Sl. No.

Sector ZP % to total allocation

TP % to total allocation

GP % to total allocation

TOTAL % to total allocation

1 Primary and Secondary Education- 2202 General Education

52655.25 46.43 597.25 1.61 53252.50 23.77

2 Mass Education-2202 General Education-04 281.50 0.25 281.50 0.13

3 Sports and Youth Services-2204 656.96 0.58 656.96 0.29

4 Medical and Public Health Services – Rural Health-2210

9442.73 8.33 478.43 1.29 9921.16 4.43

5 AYUSH-2210 373.13 0.33 373.13 0.17

6 Family Welfare Programmes-2211 1141.10 1.01 1141.10 0.51

7 Rural Water Supply-2215 27.19 0.02 5656.86 7.70 5684.05 2.54

8 Welfare of Scheduled Castes 4025.94 3.55 3681.14 9.89 7707.08 3.44

9 Welfare of Scheduled Tribes 2538.53 2.24 687.53 1.85 3226.06 1.44

10 Special Component Plan-2225 2891.82 7.77 2891.82 1.29

11 Welfare of BCM-2225 4072.41 3.59 898.06 2.41 4970.47 2.22

12 Welfare of Women & Children-2235 5264.28 4.64 728.62 1.96 5992.90 2.67

13 Nutrition-2236 11228.24 30.18 11228.24 5.01

14 Agriculture-2401 3023.69 2.67 151.44 0.41 3175.13 1.42

15 Horticulture-2401 1805.22 1.59 196.77 0.53 2001.99 0.89

16 Animal Husbandry-2403 1383.68 1.22 3154.04 8.48 4537.72 2.03

17 Fisheries-2405 475.65 0.42 475.65 0.21

18 Forest -2406 66.68 0.06 171.56 0.23 238.24 0.11

19 Co-Operatin-2425 296.69 0.26 121.80 0.33 418.49 0.19

20 Area Development and Other Rural Development Programmes

16.15 0.02 16.15 0.01

21 Area Development and Other Rural Development Programmes

406.27 0.36 1401.15 1.91 1807.42 0.81

22 Rural Energy Programmes 511.20 0.70 511.20 0.23

23 Rural Employment Programmes 1549.93 1.37 2324.85 6.25 3874.78 5.28 7749.56 3.46

182

Sl. No.

Sector ZP % to total allocation

TP % to total allocation

GP % to total allocation

TOTAL % to total allocation

24 Grants To Panchayat Raj Institutions 1520.00 1.34 7800.00 20.96 9320.00 4.16

25 Grants To Panchayat Raj Institutions 432.94 0.38 742.40 2.00 28180.00 38.37 29355.34 13.10

26 Grants To Panchayat Raj Institutions 851.33 0.75 851.33 0.38

27 Minor Irrigation-2702 16.67 0.01 85.14 0.12 101.81 0.05

28 Village and Small Scale Industries-2851 311.07 0.27 311.07 0.14

29 Sericulture-2851 312.62 0.28 46.95 0.13 359.57 0.16

30 Roads & Bridges-3054 18852.81 16.62 486.30 1.31 19339.11 8.63

31 Secretariat Economic Services Dist. Planning Unit-3451

180.64 0.16 180.64 0.08

32 Tribal Sub Plan - 2225 737.56 1.98 737.56 0.33

33 Handloms & Textiles (V & SI)-2851 201.52 0.18 201.52 0.09

34 Science & Technology - 3425 49.25 0.04 49.25 0.02

35 Art & Culture and Library 64.00 0.06 1122.60 1.53 1186.60 0.53

36 Housing 188.40 0.51 26274.40 35.78 26462.80 11.81

37 Employment and Training 41.39 0.11 41.39 0.02

38 Welfare of Disabled and Senior Citizens 245.32 0.22 245.32 0.11

39 Watershed Development 6142.11 8.36 6142.11 2.74

40 Agriculture Marketing 90.50 0.08 90.50 0.04

41 Welfare of Minorities 801.21 0.71 23.92 0.06 825.13 0.37

Total 113416.71 100.00 37206.91 100.00 73435.95 100.00 224059.57 100.00

183

CHAPTER – 24

Status of Urban Governance in Karnataka

24.1 The 73rd and 74th Constitutional Amendments in 1992 envisaged

creation of local self-governments for the rural and urban populations

wherein panchayats and municipalities were provided with the

constitutional status for governance. The 74th Constitutional

Amendment brought about some principal changes in the urban

fabric of the country; it mandated that the municipalities shall have a life

for five years, establishment of an independent State Election

Commission for the superintendence and conduct of municipal elections. It

also mandated that a State Finance Commission shall be constituted at

the expiration of every fifth year for reviewing the financial position of

municipalities. The spirit of the 74th Constitutional Amendment was to

empower Urban Local Bodies [ULBs] to function efficiently and

effectively as autonomous entities for delivery of usable capital goods and

services. To accomplish this goal, Local Bodies should have larger financial

resources at their disposal.

24.2 The urban population of Karnataka was 17.62 million as per 2001

Census and ranks fourth among the highly urbanized States in India.

The increase in urban population since 1901 in Karnataka was eleven fold

as compared to the rural population which was three fold. Karnataka has

the following five categories of Urban Local Bodies:

1. Eight City Corporations [CC]

2. Forty Four City Municipal Councils [CMC]

3. Ninety Four Town Municipal Councils [TMC]

4. Sixty Eight Town Panchayats [TP]

5. Four Notified Area Committees [NAC]


C H A P T E R - 2 4

24.3 Categorization of ULBs is based on population, local revenue

generation and level of employment within their jurisdiction. City

Corporations are governed by the Karnataka Municipal Corporations

Act 1976 [KMCA] and other ULBs are governed by the Karnataka

Municipalities Act 1964 [KMA].

24.4 Urban Local Bodies are required by the KMCA and KMA to perform

both obligatory and discretionary functions. In addition, ULBs also

perform additional functions as stipulated in the 12th schedule

[Annexure-8]. Major Obligatory functions include the maintenance of

roads, street lights, sanitation, water supply, registration of births and

deaths, public immunization and regulation of residential and non-

residential construction. Discretionary functions include formation and

maintenance of parks, schools, libraries and hospitals.

24.5 Urbanisation and globalization have resulted in shifting the

responsibility of coping with the increased demand for urban services on

local governance. However, corresponding financial resources are often not

devolved to ULBs. This is due to inadequate financial resources and powers

allocated by the State Government to meet fast growing urban

infrastructure demand.

24.6 ULBs do not have a large independent tax domain. They are

largely devoid of autonomous revenue sources. The property tax is the

mainstay of ULB’s own finance. The receipts of ULBs may broadly be

classified as [a] Tax and Non-tax revenue and [b] Grants and loans.

The state laws reveal that while power to collect certain taxes is vested with

the ULBs, powers pertaining to the rates and revision there of, procedure of

collection, ceiling and floors, method of assessment, exemptions and

concessions et cetera are vested with the State Government.


C H A P T E R - 2 4

24.7 Enhancing fiscal sustainability would require: [a] Reigning in the

growth of local expenditure, [b] Enhancing local revenue mobilisation by

expanding and dispensing property tax reforms, [c] Improving cost recovery

of charges and fees and [d] Linking the payment of taxes and fees with the

delivery of services.

24.8 Municipal governments are legally required to have a balanced

budget. The municipal expenditures are thus conditioned by the level of

resources available. Low municipal receipts lead to low municipal

expenditures and low level of municipal services have a major impact

on the quality of life and standard of citizens living in the urban

areas.

24.9 The focus of this chapter is to make an assessment of financial

conditions of the ULBs and their performance in improving the standard of

living in the urban localities. For analyzing the fiscal position of urban local

bodies, the TSFC obtained primary data on fiscal variables through

Questionnaire from all the ULBs of Karnataka. The data received from 160

ULBs has been analysed and presented in the following sections. A

separate section is devoted to analyze data related to Bruhat

Bangalore Mahanagara Palike[BBMP]. Besides, the accuracy of the

data, the analysis has some other limitations. Since local bodies are

statutorily not allowed to have deficits in their budgets, their resource gaps

cannot be assessed from the budget documents. Hence, the ULBs budgets

can indicate the trends in revenues and expenditure and their

composition.

24.10 Before discussing the financial dimensions of ULBs, it would be

relevant here to look into certain socio-economic characteristics and

urbanization phenomenon of these bodies. The data from Census 2001

has been used to study the comparative analysis of characteristics of


C H A P T E R - 2 4

different types of ULBs in Karnataka. Table-24.1 gives the characteristics

of variables used among different types of ULBs.

Table 24.1

Characteristics of Variables of ULBs in Karnataka Civic

Status of ULBs

Characterstics Area (Sq.Kms)

Population (No)

Litracy Rate

SCs&STs % of SCs&STs

CC Min 64.48 316766 73.57 24069 4.73 Max 549.84* 5726830 91.14 721891 22.70 Mean 180.28 1179921 82.04 151019 13.63 Median 145.94 507781 82.95 70475 13.83 % to Total 27.94 52.55 45.15 Sum 1442.22 9439369 1208151 CMC Min 8.42 53290 65.75 3935 5.24 Max 102.59 274352 90.69 75059 47.78 Mean 36.88 120474 79.73 19985 16.08 Median 29.57 101251 80.82 13894 14.17 % to Total 22.15 20.79 23.15 Sum 1143.18 3734700 619550 TMC Min 1.46 14962 54.67 1129 2.75 Max 63.37 101264 91.20 34172 40.28 Mean 14.95 37402 74.84 6386 16.46 Median 11.69 34507 76.25 5579.5 14.17 % to Total 23.18 16.66 19.09 Sum 1196.18 2992160 510889 TP Min 0.43 4249 36.80 306 1.83 Max 126.51 54820 90.85 11198 58.87 Mean 14.68 19409 74.56 3599 18.93 Median 6.16 18067.5 74.66 3112.5 16.84 % to Total 25.59 9.73 12.10 Sum 1320.99 1746771 323898 NAC Min 2.98 4792 74.73 1066 18.63 Max 45.43 27142 90.18 9475 34.91 Mean 14.73 12132 80.83 3414 23.67 Median 5.26 8297.5 79.21 1557 20.57 % to Total 1.14 0.27 0.51 Sum 58.93 48529 13655 Total Min 0.43 4249 36.80 306 1.83 Max 549.84* 5726830 91.20 721891 58.87 Mean 24.23 84326 75.82 12564 17.48 Median 11.34 28068 76.47 4491 15.30 % to Total 100.00 100.00 100.00 Sum 5161.5 17961529 2676143

* Area of villages merged with BBMP not considered Source: Census 2001


C H A P T E R - 2 4

24.11 One can observe wide variations in indicators like Area and

Population, decrease in the minimum levels of indicators could also be

observed with the civic status of ULBs. Composition of area and population

of different types of ULBs is portrayed in the following pie graphs[24.1a

and 24.1b]. It can be seen that although the four types ULBs occupy

approximately equal extent of area, the percentage of population indicates

the pressure on the higher level of ULBs.

Composition of Area and Population by type of ULBs

Graph-24.1a Graph-24.1b

Analysis of financial conditions:

24.12 Financial assessment of Urban Local Bodies [ULBs] has been done

using data for the period of 2002-03 to 2006-07. The analysis indicates

that in total 7.35 percent [Table-24.2] of ULBs are facing financial

deficit [Income minus Expenditure]. City Corporations [33.30%] have

higher percentage of financial deficit compared to Town Municipal Councils

[9.80%], Town Panchayats [6.12%] and City Municipal Councils [3%].

Composition of Area by type of ULB

CC28%

CMC22%

TMC23%

TP26%

NAC1%

Composition of Population by type of ULB

CC52.6%

CMC20.8%

TMC16.7%

TP9.7%

NAC0.3%


C H A P T E R - 2 4

Table-24.2 Percentage Distribution of Financial Condition of ULB [2002-07]

[in percent]

Type of ULB Deficit Surplus Total City Corporations 33.30 66.70 100% City Municipal Councils 3.03 96.97 100% Town Municipal Councils 9.80 90.20 100% Town Panchayats 6.12 93.88 100% Total 7.35 92.65 100%

24.13 However, in aggregate, ULBs have spent lesser amount per

person than the per capita revenue. It implies that although few ULBs

are in deficit but in most cases ULBs are unable to spend their

entire revenue. The per capita revenue and per capita expenditure for the

financial years 2002-03 to 2006-07 are presented in Table-24.3. It is clear

that irrespective of type and size, the ULBs were unable to utilize their

revenues. Over the time, the increasing gap between revenue and

expenditure is also noticeable. For the financial year 2006-07 the per capita

revenue reached to double of their per capita expenditure and this picture is

uniform across all types of ULBs. This gap simply indicates the inability of

ULBs in spending money.

Table-24.3

Per capita Revenue and Expenditure for the period 2002-07 [in Rupees]

Financial Years 2002-03 2003-04 2004-05 2005-06 2006-07

Type of ULB

Rev Exp Rev Exp Rev Exp Rev Exp Rev Exp City Corporations

380 470 513 482 521 387 696 505 1198 502

City Municipal Councils 378 256 427 308 467 293 513 304 879 425

Town Municipal Councils

296 277 394 314 498 237 484 310 1115 423

Taluk Panchayats

362 216 442 288 595 285 606 346 1362 514

Total 339 275 420 334 523 264 536 323 1141 440

Rev: Revenue, Exp: Expenditure


C H A P T E R - 2 4

Revenue Mobilization:

24.14 The percentage distribution of average amount of revenue for the

period 2002-07 by various sources and type of ULB are shown in Table

24.4 & 24.5 respectively. It can be seen that expectedly, government grants

are the mainstay of finances of ULBs. In aggregate, 47 percent in the form

of specific purpose grants and 13 percent comes from the general purpose

grants. Nevertheless, these grants also vary in percentage by type of ULBs.

The percentage is highest for TP followed by TMC, CC and CMC.

24.15 After the government grants, property taxes come as second major

source of finance for ULBs. Property taxes are relatively more important for

bigger ULBs than the smaller ULBs. The share of property tax decreases

from bigger to smaller ULBs; while city corporations generate 20.47 percent

of their total revenue from property taxes, 9.23 percent is for TPs. Other

important sources are fees & fines [3.16 percent] and cess [3.03percent].

By and large, the fiscal sources of City Corporations indicate an

advantageous position and their share of revenue is comparatively higher

than the other type of ULBs.

24.16 Table-24.4 consists of per capita revenue by various sources and

type of ULBs which indicate that city corporations get more per capita fund

than the others. Also TPs get more funds as compared to CMCs and TMCs.

After government grants, property tax has remained the most important

item in generating revenue for all the ULBs. Expectedly, City Corporations

get greater opportunity to generate more funds from property taxes. The

negative association between per capita property taxes and size of ULBs has

been observed. Other two important sources of revenue generation are

fees/fines and cess. City Corporations are again at advantage than the

others in generation and collection of their revenues. Here a negative

association with the size of ULBs was noticed.


C H A P T E R - 2 4

Table-24.4

Percentage Distribution of Revenues of ULBs [2002-07]

Type of Urban local body Types of revenue sources

CC CMC TMC TP Total Property taxes

20.47 15.99 12.07 9.23 15.76Advertisement

0.15 0.07 0.04 0.00 0.08Theatre tax

0.00 0.00 0.00 0.01 0.00Entertainment tax

0.00 0.00 0.00 0.00 0.00Professional tax

0.03 0.02 0.02 0.04 0.03Construction or building tax

0.27 0.23 0.13 0.16 0.22Consumption tax

0.00 0.56 0.17 0.66 0.33Duties

0.00 0.04 0.52 0.11 0.13Transfer of immovable properties 1.32 1.16 0.58 0.39 1.00

Registration and stamps 0.10 2.24 0.43 0.40 1.05

Charges, fees and fines 7.10 1.95 1.11 0.90 3.16

Cess 5.09 2.15 2.14 2.38 3.03

Tolls - 0.09 0.69 0.05 0.19

General grants 11.12 14.69 13.03 13.45 13.17

Specific grants 47.51 44.27 50.07 57.48 47.83

Head of transfer - 3.59 9.25 6.80 4.06

Scheme 0.15 0.07 0.04 0.00 0.08

Others 6.67 12.89 9.72 7.93 9.89

Total 100% 100% 100% 100% 100%


C H A P T E R - 2 4

Table-24.5

Per capita Revenue of ULBs [in Rupees]

Type of Urban local body Types of revenue sources CC CMC TMC TP Total

Property taxes 176.57 96.02 62.84 57.20 100.64

Advertisement 1.32 0.39 0.19 0.02 0.50

Theatre tax 0.00 0.00 0.00 0.07 0.01

Entertainment tax 0.00 0.00 0.01 0.00 0.00

Professional tax 0.29 0.12 0.11 0.22 0.16

Construction or building tax 2.36 1.39 0.68 1.01 1.38Consumption tax

0.00 3.34 0.87 4.12 2.08Duties

0.00 0.22 2.71 0.70 0.86Transfer of immovable properties

11.35 6.98 3.01 2.40 6.41

Registration and stamps 0.89 13.48 2.22 2.46 6.69

Charges, fees and fines 61.27 11.69 5.76 5.58 20.18

Cess 43.94 12.89 11.16 14.75 19.34

Tolls 0.00 0.56 3.61 0.33 1.19

General grants 95.87 88.17 67.84 83.36 84.14

Specific grants 409.74 265.82 260.70 356.26 305.54

Capital Account 0.00 21.56 48.15 42.17 25.94

Others 57.49 77.40 50.61 49.16 63.19

Expenditure Pattern of ULBs:

24.17 As shown in Table-24.6, the major heads of expenditure are salaries

and allowances, costs of collecting all type of taxes and other charges

including water supply, public health, solid waste management, street

cleaning, maintenance of roads and street lighting et cetra. This pattern is

more or less similar across all types of ULBs with some variation in

percentage share. It can be observed that for City Corporations the


C H A P T E R - 2 4

percentage of expenditure for salaries is highest [47.84 percent] and for

CMCs the percentage is lowest with 13.51 percent.

Table-24.6 Percentage Distribution of Expenditure of ULBs

Type of Urban local body

Types of revenue sources CC CMC TMC TP Total

Collection of all types of taxes, 12.24 6.78 7.34 9.75 9.13

Salaries and Allowances 47.84 13.51 34.35 27.69 31.90

Education 0.23 0.12 0.10 0.20 0.16

Libraries 0.03 0.09 0.09 0.12 0.07

Water Supply 5.26 12.67 12.62 11.74 9.98

Public Health 5.01 4.16 3.84 3.15 4.28

Solid waste Management 6.47 6.72 1.98 2.91 5.15

Street cleaning, drains and sewerage 4.30 5.54 5.61 5.17 5.07

Maintenance of Roads 6.32 10.70 9.63 12.56 9.09

Maintenance & repairs of Buildings 0.47 1.27 1.83 2.56 1.25

Street Lighting 4.80 7.98 5.84 6.53 6.25

Land acquisition 0.56 0.67 0.92 0.36 0.65

Fire services 0.00 0.01 0.02 0.01 0.01

Gardens, parks and road side trees 0.65 0.84 0.21 0.43 0.59

Markets and slaughter houses 0.05 0.35 0.16 0.58 0.22

Maintenance of Burial and Cremation Grounds

0.16 0.24 0.13 0.46 0.21

Others 5.60 28.37 15.32 15.78 16.00

Total 100% 100% 100% 100% 100%

24.18 Table-24.7 shows the per capita expenditure on various items and

by type of ULBs. For all types of ULBs, the highest per capita expenditure

is for salaries and allowances. On an average City Corporations spend Rs.

339 while CMC, TMC and TP spend Rs 43.88, Rs. 130 and Rs. 116

respectively. The other major items of per capita expenditure are collection

all types of taxes, water supply, public health, solid waste management,


C H A P T E R - 2 4

street cleaning, maintenance of roads and street lighting. In general, City

Corporations spend more as compared to other types of ULBs. In a few

exceptional cases like water supply and maintenance of roads, the TPs have

spent more than City Corporations.

Table-24.7

Per Capita Average Expenditure of ULBs [in Rupees]

Type of Urban local body Types of revenue sources CC CMC TMC TP Total

Collection of all types of taxes, 86.99 22.01 27.90 41.15 39.66

Salaries and Allowances 339.90 43.88 130.54 116.94 138.53

Education 1.62 0.38 0.39 0.86 0.70

Libraries 0.22 0.28 0.34 0.50 0.33

Water Supply 37.37 41.13 47.94 49.57 43.33

Public Health 35.61 13.50 14.60 13.31 18.58

Solid waste Management 46.00 21.83 7.54 12.28 22.35

Street cleaning, drains and sewerage

30.52 17.99 21.32 21.84 22.03

Maintenance of Roads 44.90 34.75 36.59 53.02 39.47

Maintenance & repairs of Buildings

3.33 4.12 6.95 10.82 5.42

Street Lighting 34.12 25.92 22.20 27.57 27.13

Land acquisition 4.00 2.17 3.51 1.52 2.83

Fire services 0.00 0.04 0.07 0.03 0.04

Gardens, parks and road side trees

4.64 2.72 0.78 1.82 2.54

Markets and slaughter houses 0.32 1.13 0.61 2.46 0.97

Maintenance of Burial and Cremation Grounds

1.15 0.78 0.49 1.93 0.92

Others 39.81 92.13 58.21 66.62 69.49

Relationship between Per Capita Expenditure and Per Capita Revenue:

24.19 It is expected that there will be positive association between per

capita expenditure and per capita revenue. However, as it has been


C H A P T E R - 2 4

observed that there is a huge gap between per capita revenue and per capita

expenditure, it is worthwhile to see the relation through scatter diagram

[Grap-24.2] which confirms perfect positive association.

Graph-24.2 Positive Association Between Per-capita Expenditure and

Per-capita Revenue.

total per capita revenue

16001400120010008006004002000-200

tota

l per

cap

ita e

xped

iture

1000

800

600

400

200

0

-200

Explaining Variation in Per Capita Own Revenue Generation:

24.20 There may be variations among the ULBs in terms of population

size, percentage of SC/ST population and those could affect revenue

generation. These underlying conditions are the basic factors that could

determine expenditure pattern of ULBs. To determine the concerned issue

Ordinary Least Square [OLS] method of analysis has been adopted. Table-

24.8 shows the correlation of per capita own revenue with the size of

population, percentage of SC and ST population, and percentage of level of

literacy. Here, the dependent variable has been taken as log of per capita

own grant. The independent variables are included based on the following

priori reasoning:


C H A P T E R - 2 4

1. Population size should be negatively related to the per capita

own grant, because ULB with greater population would be

unable to collect taxes efficiently from all people resulting less

per capita own revenue. In aggregate larger ULBs would collect

greater amount than the smaller ULBs, but in per capita terms

it would be less.

2. Percentage of SC/ST population is expected to have negative

impact on per capita own revenue generation. In general, SC/ST

people are poor in terms of social and economic aspects. Thus

higher percent of SC/ST population indicates backwardness of

the ULBs and economically backward ULBs would generate less

revenue. ULBs, sometimes, may need to give tax exemption to

the poor SC/ST population.

3. The marginal effects of variations in the literacy rate on per

capita own revenue generation should be positive as literacy

signals the higher socio-economic condition of that area. Thus,

ULBs with greater concentration of literate population are

expected to generate comparatively higher per capita revenue.

24.21 The OLS estimation result in Table-24.8 confirms the hypothesis.

However, the variables that have been taken into account for the analysis

have little explanatory power for the whole variation of per capita revenue.

Results in Table-8 indicate that variables explain only 19 percent variability

of total variation. In case of variations of per capita revenue, two factors,

population size and level of literacy have been important. These two factors

are statistically significant in association with per capita own revenue.


C H A P T E R - 2 4

Table-24.8

OLS Estimation of the Determinants of Variations in Per Capita Total revenue for ULBs: 2002-07 [Log Per Capita Expenditures]

Indicators Correlation coefficient [Constant] 2.79* log of population -0.11** log of literacy 1.06** Log of SC pop 0.00 Log of ST pop 0.04 R2 0.19


Explaining Variation in Per Capita Expenditure:

24.22 The association between per capita expenditure and population size,

literacy level, and percent of SC/ST population is explained below:

24.23 The dependent variable has been taken as log of per capita

expenditure. The independent variables are included based on the following

priori reasoning:

1. Population size should be negatively related to per capita

spending, because for smaller ULBs, the fixed cost effects will

weigh heavily on budgets.

2. The percent of SC/ST population is expected to be positively

related to per capita expenditures because this implies a larger

concentration of poorer population. Thus, greater amounts of

specific schemes or grants will flow to ULBs with higher

proportion of SC/ST population which will ultimately result in

higher per capita expenditures.

3. The marginal effect of variations in the literacy rate on per

capita expenditures should be negative as literacy signals the

higher socio-economic condition of that area. With greater

concentration of literate population in socio-economically


C H A P T E R - 2 4

advanced ULBs, which are expected to receive lower per capita

grant resulting in lower per capita expenditure.

4. Per capita grant is expected to have positive relationship with

the per capita expenditure.

24.24 The OLS estimates in Table-24.9 indicate that results do not stand

the tests of assumed hypothesis, except for the per-capita grant. In the

regression analysis, two variables-size of population and level of literacy,

have been statistically significant in association with per capita

expenditure. These two factors are negatively associated with the per capita

expenditure. The concerned variables explain 51 percent variability of total

variation. The possible explanation of this contrary result could be inability

of smaller ULB to spend the grants for the benefit of people.

Table-24.9

OLS Estimation of the Determinants of Variations in Per Capita Total Expenditures for ULBs: 2002-07

[Log Per Capita Expenditures]

Indicators Correlation coefficient [Constant] -5.10** log of population 0.12** log of literacy 1.08** Log of SC pop -0.05 Log of ST pop 0.08 Log of per capita grant 0.77* R2 0.51



CHAPTER – 25

Implications of Previous State Finance Commissions of Karnataka

25.1 Formation of State Finance Commission [SFC], which is a

Constitutional requirement, plays a vital role in fiscal decentralization. SFC

has the onerous responsibility of reviewing the financial position of PRIs

and ULBs.

25.2 The State Finance Commission is required to function in accordance

with the provisions made in Articles 243 (I) and 243 (Y). The Terms of

Reference given to the TSFC have already been discussed in the

Introduction Chapter. This chapter is devoted to study the nature of

recommendations made by the previous two SFCs in Karnataka and the

concern and commitment of the state government towards

implementation of the recommendations made in those reports.

Constitution of State Finance Commissions:

25.3 Article 243[I] and Article 243[Y] of the Constitution [73rd

Amendment] Act, 1992 envisages Constitution of State Finance

Commissions at the expiration of every 5th year to review the financial

position of the PRIs and the ULBs. Section 267 of the Karnataka

Panchayat Raj Act, 1993, Section 503-C of the Karnataka Municipal

Corporation Act [Amendment] 1994 and Section 302-B of the Karnataka

Municipalities Act [Amendment] 1994 are the related sections which

mandate for the constitution of SFC in accordance with the provisions of

the 73rd and 74th Amendment to the Constitution of India.


C H A P T E R - 2 5

25.4 The Government of Karnataka vide Order No.RDP 313 ZP 93

dated:10-06-1994 constituted the First State Finance Commission [FSFC]

with the following members;

1. Sri. G. Ashwathnarayan, IAS [Retd.] - Chairman

2. Dr. Abdul Aziz - Member

3. Sri. R. Suresh, IAS - Member Secretary

25.5 Subsequent to resignation of Sri.G.Ashwathnarayan from the post of

Chairmanship, Government of Karnataka vide Order No.FD 122 PA 95

dated:28-02-1995 reconstituted the First SFC with the following members:

1. Dr. G. Thimmaiah - Chairman

2. Dr. Abdul Aziz - Member

3. Sri. R. Suresh, IAS - Member Secretary

25.6 Later, the Government vide Notification No. DPAR/371/SAS/95[I]

dated: 9-06-1995 transferred Sri. R. Suresh and posted Sri A.K. Agarwal,

IAS as Member Secretary of the First SFC.

25.7 The First SFC gave its first report relating to Urban Local Bodies in

January, 1996. The second report of the Commission relating to

Panchayat Raj Institution was submitted in July, 1996.

25.8 The Government of Karnataka in exercise of powers conferred by

article 243[I] and 243[Y] which envisages the State Governments to

constitute the Finance Commission at the expiration of every 5 years

constituted the Second State Finance Commission [SSFC] in October 2000

vide Notification No. FD 1 ZPA 2000 dated: 25-10-2000 with the following

members:

1. Sri. T.N. Narasimha Murthy, Former MLC- Chairman

2. Prof. M. Govinda Rao, - Member

3. Sri. K.P. Surendranath, IAS[Retd.] - Member


C H A P T E R - 2 5

25.9 Consequent upon the untimely demise of Sri.T.N.Narasimha Murthy

in October, 2001 and resignation of Prof. M. Govinda Rao, Government of

Karnataka reconstituted the Second SFC vide Notification No. FD 1 ZPA

2000 dated: 28-02-2002 with the following members:

1. Sri. K.P. Surendranath, IAS[Retd.] - Chairman

2. Dr. M.C. Kodli - Member

3. Sri. K.R. Shashidhara, IAS - Member Secretary

The reconstituted Second SFC submitted its report in December,

2002.

Key Recommendations of First SFC:

25.10 The First SFC of Karnataka recommended transferring one

consolidated share from the total Non-Loan Gross Own Revenue

Receipts [NLGORR] of the State government to Panchayat Raj

Institutions and Urban Local Bodies in Karnataka. The NLGORR of the

State government include all taxes, duties, fees, interest receipts and other

non-loan non-tax receipts levied and collected by the State government.

Although the term of reference to the Commission was specifically to

suggest the principles governing the sharing of the net proceeds of the

taxes, duties, tolls and fees and other revenues levied by the State

Government, the First SFC decided to recommend a share in the NLGORR

of the State Government, considering the practical difficulties in

arriving at the net yield. The First SFC recommended that the total

share of PRIs and ULBs out of NLGORR of the State Government should

be 36 percent. Based on weightages fixed to the indicators, the FSFC

recommended that the share of PRIs should be 85 percent of 36

percent i.e., 30.60 percent of NLGORR and that of ULBs was 15

percent i.e., 5.40 percent of NLGORR. The indicators and the weights


C H A P T E R - 2 5

made use by the First SFC are given in Table–25.1. The complete list of

recommendations of First SFC is given in Annexure-12.

Table–25.1 Criteria and Weightages used by First SFC

Criteria for PRIs Weights Criteria for ULBs Weights

1. Proportion of rural population 23.03% 1. Proportion of urban population 10.30%

2. Proportion of rural area 32.59% 2. Proportion of urban area 0.74%

3. Road length per sq.km 8.34% 3. Road length per sq.km 2.78%

4. Illiteracy rate 4. Illiteracy

5. No. of persons per hospital bed 20.34%

5. No. of persons per hospital bed 1.88%

Total weight 84.30% Total weight 15.70%

Rounded off to 85% Rounded off to 15%

Source: Report of First State Finance Commission

25.11 The State Government accepted the recommendation

regarding main devolution pattern suggested by the First SFC and

issued a G.O.No.FD 9 ZPA 94 Dated: 31.3.1997 [Annexure-14]. As per this

order;

• the recommendations of First SFC regarding devolution of 36 percent of NLGORR to PRIs and ULBs came into force from the financial year 1998-99.

• the ratio of 15:85 interse devolution between ULBs and PRIs to be achieved by the year 2001-02

• the year-wise devolution for ULBs was 1998-99=11%, 1999-2000=12.5%, 2000-01=14% and 2001-02=15%

25.12 The other recommendations of the First SFC including the inter-se

devolution among three tiers of PRIs and among all the ULBs have not

been accepted by the Government.


C H A P T E R - 2 5

Key Recommendations of Second SFC:

25.13 The Second SFC retained the concept of NLGORR as the basis

for devolution of funds to the PRIs and ULBs. Considering the fact that

the State government had caused 39 plus percentage of devolution during

the period from 1997-98 to 2001-02 to the PRIs and ULBs put together, it

enhanced the share from 36 percent to 40 percent. The indicators and

weightages were slightly modified [Table–25.2] and relative share of PRIs

and ULBs was arrived at 80 and 20 percent respectively. In other words

the share of Panchayat Raj Institutions was 32 percent and that of

Urban Local Bodies was 8 percent of NLGORR. The Second SFC

suggested that its recommendations be made effective from the financial

year 2003-04. Complete list of recommendations of Second SFC is given in

Annexure-13.

Table–25.2

Criteria and Weightages used by Second SFC


1. Proportion of rural population 19.81% 1. Proportion of urban population 10.19%

2. Proportion of rural area 29.33% 2. Proportion of urban area 0.67%

3. Proportion of rural SC&ST Population

11.75% 3. Proportion of urban SC&ST Population

3.25%

4. Proportion of rural Illiterates 12.03% 4. Proportion of urban Illiterates 2.97%

5. Ratio of rural population per hospital bed

7.50% 5. Ratio of urban population per hospital bed

2.50%

Total weight 80.42% Total weight 19.58%

Rounded off to 80% Rounded off to 20%

Source : Report of Second State Finance Commission

25.14 Ironically, the Government of Karnataka took considerable time to

react to the recommendations of Second SFC. In April 2006, vide G.O.

No.UD 121 SFC 2005, dated:12.4.2006 [Annexure-15], recommendations


C H A P T E R - 2 5

of Second SFC regarding interse distribution of funds among ULBs were

modified and a new formula has been introduced by the government. Later,

in June 2006, Government issued another G.O.No.FD 338 Exp-9/2006,

Dated: 29.06.2006 [Annexure-16]. As per this order;

• the basis for devolution was altered to Non-Loan Net Own Revenue Receipts [NLNORR] instead of Non-Loan Gross Own Revenue Receipts [NLGORR]

• as PRIs share in case Second SFC recommendations are accepted is likely to be lower than the current devolution, the formula proposed by the Second SFC is restricted to the ULBs share only

• here too, 20% share of ULBs should be achieved in a graduated fashion starting from 2005-06 financial year as was the decision on the First SFC’s recommendations

• the PRIs will continue to receive untied developmental grants at current levels subject to prompt clearance of user charges levied by public utilities.

• as the current levels of grants are much higher than that recommended by the Second SFC, no increases would be made for the Second SFC period and any incentivisation would have to be fashioned within the existing level of grants.

• formula indicated by Urban Development Department vide its order No.UD 121 SFC 2005, dated:12.4.2006 would be used for inter-se allocation of funds to ULBs.

25.15 The other recommendations of the Second SFC have not been

accepted by the Government.

25.16 In view of the fact that as per the constitutional requirement, the

State Finance Commissions are constituted at the expiration of every fifth

year indicate that their recommendations have to be made operational for a

period of five years. As there was a considerable delay on the part of the

state government reacting to recommendations of Second SFC and as there

was no mention in the orders issued by the government regarding the year

from which its recommendations have been considered, clarification was


C H A P T E R - 2 5

sought from the Department of Finance, GOK on this issue. It was clarified

that the implementation of recommendations of Second SFC has started

from the date of issue of Government Order dated 29.06.2006, i.e., financial

year 2006-07. It was also clarified that the devolution as per this order

would be in force till a decision on the recommendations of Third State

Finance Commission is taken.

25.17 The TSFC took note of all these facts and studied the trends and

pattern of funding made by the State Government to the rural and urban

local bodies from the financial years 1998-99 to 2007-08. The data on this

aspect is detailed in Appendix - 25.1.

25.18 It can be seen that until the financial year 2002-03, the transfers to

PRIs were on the higher side, but from the financial year 2003-04

devolution has abruptly started declining. There was a sudden decline of

9.35 percent between these two years. In the case of ULBs, there is a steady

increase in devolution of funds. The percentage of devolution to ULBs in

1998-99 which was 3.95 percent of NLGORR has increased to 6.67 percent

in 2007-08. But, it has never reached its due share as recommended by the

previous two State Finance Commissions.

25.19 The foregoing analysis shows that setting up of State Finance

Commissions seems to be only to meet the Constitutional obligation for the

state government. The irony is that it never tabled the Action Taken

Report on the recommendations of previous two State Finance

Commissions in both houses of Legislatures.


Appendix - 25.1Resources Transferred to PRIs & ULBs from State's Own Revenue

Year

Non-Loan Gross Own

Revenue Receipts

(NLGORR) Rs.Crores

Non-Loan Net Own Revenue Receipts

(NLNORR) Rs.Crores

Panchayat Raj Institutions Urban Local Bodies

Devolution (Rs.Crores)

Percent of Devolution to NLGORR (Col 4/Col 2 )

Percent of Devolution to NLNORR (Col 4/Col 3)

Required % of Devolution

as per G.O.FD 9 ZPA 94

dt:31.3.97


as per Recommendation of First

& Second SFCs

Shortfall (col5-col 8)

Devolution (Rs.Crores)

Percent of Devolution to NLGORR

(Col 10/Col 2)

Percent of Devolution to NLNORR

(Col 10/Col 3)


as per G.O.FD 9 ZPA 94

dt:31.3.97 and

G.O.No.FD 338 Exp-

9/2006, dated:29-6-2006

Required %

of Devolutionas per

Recommendation of First

& Second SFCs

Shortfall

(col 11-col 14)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 151998-99 8412.96 3089.01 36.72 30.60 30.60 6.12 332.37 3.95 3.96 5.40 -1.45

1999-00 9355.65 3499.95 37.41 30.60 30.60 6.81 415.66 4.44 4.50 5.40 -0.96

2000-01 10702.35 3854.82 36.02 30.60 30.60 5.42 531.43 4.97 5.04 5.40 -0.43

2001-02 10946.69 4337.68 39.63 30.60 30.60 9.03 563.81 5.15 5.40 5.40 -0.25

2002-03 11717.38 4409.32 37.63 30.60 30.60 7.03 573.71 4.90 5.40 5.40 -0.50

2003-04 15528.58 4391.54 28.28 30.60 32.00 -3.72 628.84 4.05 5.40 8.00 -3.95

2004-05 20544.65 5246.15 25.54 30.60 32.00 -6.46 798.34 3.89 5.40 8.00 -4.11

2005-06 22506.26 20065.20 6466.11 28.73 32.23 30.60 32.00 -3.27 1158.96 5.15 5.78 5.40 8.00 -2.85

2006-07 (R.E) 28184.76 24941.02 7995.85 28.37 32.06 32.00 -3.63 1530.29 5.43 6.14 6.00 8.00 -2.57

2007-08 (B.E) 28548.26 28222.93 9071.33 31.78 32.14 32.00 -0.22 1904.39 6.67 6.75 6.50 8.00 -1.33

Source: Finance Department, Government of Karnataka

206

CHAPTER – 26

Analysis of Grama Panchayats in Backward Taluks as Identified by High Power Committee for Redressal of

Regional Imbalances [HPCFRRI] Background and methodology:

26.1 Government of Karnataka in their Order No.PD 637 PMM 97 dated:

October 3rd 2000 constituted a High Power Committee1 to study the

regional imbalances in the State and suggest remedial measures to redress

the regional economic imbalances. The HPCFRRI headed by

Dr.D.M.Nanjundappa – Ph.D, submitted its report to the government in

June 2002. The HPCFRRI selected 35 relevant indicators to compute

both sectoral indices of development as well as a Comprehensive

Composite Development Index for each taluk for measuring regional

imbalances. The following are the indicators selected by the HPCFRRI

which were grouped into five sectors;

I. Agricultural and Allied Sector:

1. Percentage of total cropped area to net area sown.

2. Percentage of area under food grains to total cropped area.

3. Percentage of area under horticultural crops to total cropped area. 4. Percentage of area under commercial crops to total cropped area.

5. Percentage of net area irrigated to net area sown.

6. Fertilizer (NPK) consumption in kilograms per hectare (total cropped area).

7. Number of tractors per lakh rural population.

8. Livestock units per lakh rural population.

9. Per capita bank credit (commercial and regional rural banks) to agriculture (in rupees).

1 Composition of the High Power Committee: Dr.D.M.Nanjundappa, Chairman; Dr.Abdul Aziz, Member; Dr.B.Sheshadri, Member; Dr.Gopal K.Kadekodi, Member; Dr.M.J.Manohar Rao, Member and Sri.P.S.Nagarajan, I.A.S (Rtd.), (from 5.1.2001 to 8.8.2001); Sri.M.R.Sreenivas Murthy, I.A.S (from 8.8.2001 to 19.4.2002); Sri.V.Shantappa (from 19.4.2002 to 30.6.2002) were Member Secretaries


C H A P T E R - 2 6

II. Industry, Trade and Finance:

10. Number of industrial units per lakh population

11. Percentage of industrial workers to total workers

12. Per capita development credit by banks.

13. Number of bank branches per lakh population

14. Number of enterprises engaged in trade, hotels and transport per lakh population.

III. Infrastructure (Economic):

15. Number of post offices per lakh population

16. Number of telephones per lakh population

17. Road length in kilometers per 100 square kilometers

18. Proportion of villages having access to all weather roads (in percentage)

19. Railway track in kilometers per 1000 square kilometers

20. Number of motor vehicles per lakh population

21. No. of co-operative credit societies (agri. & non-agriculture) per lakh population

22. Proportion of electrified villages and hamlets to total villages and hamlets.

23. Number of regulated markets and sub-markets (equivalent regulated markets) per lakh population.

IV. Infrastructure (Social):

24. Number of doctors (govt. & private) per 10,000 population

25. Number of government hospital beds per 10,000 population

26. Literacy rate (in percentage)

27. Pupil-teacher ratio (1st to 10th standard)

28. Percentage of children out of school in the age group 6 - 14 years

29. Number of students enrolled in government and aided first grade degree colleges per lakh population

30. Percentage of habitations having drinking water facility of 40 or more LPCD


C H A P T E R - 2 6

V. Population Characteristics:

31. Sex ratio

32. Percentage of urban population to total population

33. Percentage of SC and ST population to total population

34. Percentage of non-agricultural workers to total workers

35. Percentage of agricultural labourers to total workers

26.2 The HPCFRRI adopted criteria in determining the backwardness of a

taluk with reference to the state average expressed in terms of normalized

value ‘1’ in any indicator/sectoral index/composite index of development.

The taluks whose Comprehensive Composite Development Index [CCDI]

values are equal to or above ‘1’ are classified as “relatively developed

taluks” whereas, the taluks whose CCDI values are less than ‘1’ are

classified as “backward taluks”.

Box-26.1

Type of Taluk Index in the

range Most backward 0.53 to 0.79 More backward 0.80 to 0.88 Backward 0.89 to 0.99

26.3 Among ‘backward taluks’ again three classifications have been done

as shown in Box-26.1 taking

into consideration the index

values coming in different

ranges.

Findings:

26.4 The HPCFRRI has identified 114 taluks as backward taluks. The

number of taluks coming under three categories is summarized in Table-

26.1 below;

Table-26.1

Category No. of Taluks Most backward taluks 39 More backward taluks 40 Backward taluks 35 Total 114


C H A P T E R - 2 6

26.5 Districtwise list of taluks in each of the above three categories of

backward taluks is given in Appendix-26.1.

26.6 One can notice that there are no backward taluks in Dakshina

Kannada, Udupi and Kodagu districts. At the same time all the taluks of

Bijapur, Gulbarga, Koppal and Raichur districts are identified in backward

category.

Recommendation and Response of the Government:

26.7 The HPCFRRI has suggested formulation of a Special Development

Plan with a time profile of eight years and has also suggested that an

investment of Rs.16000 crores spread over major sectors and programmes

in these 114 taluks.

26.8 The State Government has initiated action in the Budget 2007-08 to

implement the recommendations of HPCFRRI. In this regard a Special

Eight Year Development Plan has been prepared to address regional

disparities in 114 taluks. A sum of Rs.15356 crores would be spent in the

ratio of 50:30:20 in most backward, more backward and backward taluks

respectively. The government has estimated the amount required to be

invested annually starting from 2007-08 over the next eight years with an

annual inflation of 5%. Year-wise breakup of allocation envisaged in the

document is given below;

Table-26.2

Sl. No.

Year Amount (Rs. Crores)

1 2007-08 1536.25 2 2008-09 3226.25 3 2009-10 2540.57 4 2010-11 2667.60 5 2011-12 2800.98 6 2012-13 1960.69 7 2013-14 2058.72 8 2014-15 1080.83


C H A P T E R - 2 6

Analysis of Grama Panchayats in Backward Taluks for the Purpose of TSFC:

26.9 An attempt has been made by the TSFC in this Chapter to analyze

the number of GPs falling under three categories of backward taluks and to

make an assessment about Internal Revenue Mobilisation [IRM] by

these GPs in comparison with GPs of ‘other taluks’. Currently, there are

5628 GPs in the State. Belgaum district [485] has the highest no. of GPs

whereas, Bangalore Urban district [93] in view of merger of 17 GPs in

BBMP has the least number of GPs.

Diagram-26.1: GPs located in Backward Taluks

1343 (23.85%)

1244 (22.07%)

1141 (20.24%)

Most backward More backward Backward

No

. of

GP

s

26.10 The HPCFRRI has

identified 114 as

backward taluks in

Karnataka i.e. 65 % of the

taluks are backward. Out of

5628 GPs in the state, 3728

GPs are in backward taluks.

The number of GPs coming

under three categories of

backward taluks is given in Diagram-26.1 and Table-26.3.

Table-26.3

Category No. of Taluks

No. of Grama

Panchayats

Percentage to total GPs

Most backward taluks 39 1343 23.85

More backward taluks 40 1244 22.07

Backward taluks 35 1141 20.24

Total 114 3728 66.15

26.11 Districtwise analysis of GPs located in three categories of backward

taluks as identified by the HPCFRRI is given in Appendix-26.2.


C H A P T E R - 2 6

26.12 It was observed that all the GPs in Bijapur, Gulbarga, Koppal and

Raichur districts come under backward category. In Chamrajanagar district,

91 percent of GPs are in backward category. About 80 to 85 percent of GPs

in the districts of Bidar, Chitradurga, Haveri, Chikballapur, Ramnagaram,

Mandya, Mysore and Tumkur are in backward category. Also 50 to 77

percent of GPs in eight districts viz., Bagalkot, Kolar, Belgaum, Bellary,

Davanagere, Dharwad, Gadag and Hassan are in backward category. Only

five districts of the State viz., Bangalore Urban, Bangalore Rural,

Chikmagalur, Shimoga and Uttara Kannada have less than 50 percent of

GPs in backward category.

26.13 It would be useful to analyse the number of Grama Panchayats

falling under the three classification of backwardness. 14 Districts out of

29 have Grama Panchayats under ‘Most Backward taluk’ category.

Gulbarga district tops the list with 90 percent of Grama Panchayats

which are in ‘Most Backward taluk’ category. Raichur and Bidar districts

come next with 81 percent followed by Bijapur district with 77 percent of

Grama Panchayats which are in ‘Most Backward taluk’ category. In all,

about one fourth of Grama Panchayats in the State are located in ‘Most

Backward Taluk’ category.

Internal Revenue Mobilisation in GPs of Backward Taluks:

26.14 It would be interesting to study the internal revenue mobilization in

Grama Panchayats belonging to Backward Taluks. The data collected by

the SSFC shows that the average tax collection in these districts during the

years 1997-98 to 2000-01 was below the State average [57 percent]. It was

20 percentage points less in Bidar and Raichur districts and 10 percentage

points less in Gulbarga and Bijapur districts. The trend has not changed

even during the last five years. The data collected by TSFC pertaining to

analysis of DCB of Grama Panchayats during the period from 2001-02 to

2006-07 shows that the Grama Panchayats in these districts are finding it


C H A P T E R - 2 6

difficult to mobilize their own revenues in view of the prevailing

backwardness.

Comparisons in Percapita Revenue Mobilisation:

Diagram-26.2: Average Percapita Own Revenue

1521 23

30

05

101520253035

Most Backw ardTaluks

More Backw ardTaluks

Backw ardTaluks

Other Taluks

26.15 In Chapter-5, the dimensions of finances of GPs have been

discussed at length. Using the same data sets, an attempt has been made

here to study the fiscal performance of GPs located in Backward Taluks vis-

à-vis GPs located in ‘other Taluks’. A stratified random sampling method is

used for selection of GPs across all four Revenue Divisions of Karnataka.

One taluk each from all the

four categories of Taluks are

selected for every Revenue

Division. Care has been

taken not to repeat districts.

In all, 16 Taluks representing

four taluks from each

category have been selected.

The selection matrix is portrayed in Appendix-26.3. The GPs which have

furnished information for all the five years are only selected for analysis. It

was observed that the average Percapita revenue collection of the GPs

increases as the economic well being of the taluk increases. One can notice

that the Annual Per capita Internal Revenue Mobilisation

[Diagram-26.2] by the GPs of ‘Most Backward Taluks’ was half compared

to the GPs in ‘Other Taluks’. Detailed analysis are depicted in Appendix-

26.4.

These Grama Panchayats need concerted support of State

Government to provide basic facilities like supply of drinking water, street

lights, drainage et cetra. Keeping these observations in mind, the TSFC is

recommending an additional financial component to all GPs

located in Backward Taluks category. The details are discussed in

Chapter-28.


Appendix - 26.1Sl. No. District

Taluks Categorized asMost Backward More Backward Backward

1 Bagalkot Bilgi Badami, Hungund2 Bangalore Rural Hosakote3 Bangalore Urban Anekal4 Belgaum Athani, Gokak, Soundatti Raybag, Bailhongal,

Ramdurg, Hukkeri5 Bellary Sandur, Kudligi Siraguppa,

Hagaribommanahalli, Hadagali

6 Bidar Bhalki, Humnabad, Basavakalyan, Aurad

7 Bijapur Muddebihal, B. Bagewadi, Indi, Sindgi

Bijapur

8 Chamarajanagar Chamarajanagar Gundalpet, Kollegal

9 ChikBallapur Bagepalli Gudibanda, Gowribidanur Chintamani, Sidlagattha

10 Chikmagalur Kadur Tarikere11 Chitradurga Hosadurga Hiriyur, Molakalmuru,

Holalkere, Challakere12 DakshinaKannada13 Davanagere Channagiri, Harapanahalli Honnali, Jagalur

14 Dharwad Kalghatagi Navalgund, Kundagol15 Gadag Mundargi Ron16 Gulabarga Sedam, Shorapur, Yadgir,

Chitapur, Afzalpur, Shahapur, Aland, Chincholi, Jewargi

Gulbarga

17 Hassan Arakalgud Holenarasipur, Belur, Channarayapatna, Arasikere

18 Haveri Savanur, Shiggaon, Hirekerur

Haveri, Byadagi, Hanagal

19 Kodagu20 Kolar Mulbagal Srinivasapur, Bangarpet,

Malur21 Koppal Kushtagi, Yelburga Koppal Gangavati

22 Mandya Malavalli, Nagamangala, Krishnarajpet

Srirangapatna, Maddur, Pandavapura

23 Mysore H.D.Kote Hunsur, T.Narasipur, Nanjangud

Periyapatna, K.R.Nagar

24 Raichur Sindhanur, Manvi, Lingasuur, Devadurga

25 Ramnagaram Kanakapura, Magadi Channapatna

26 Shimoga Soraba Shikaripura

27 Tumkur Kunigal, Madhugiri, Gubbi, Sira, Pavagada

Turuvekere, Koratagere, C.N.Halli

28 Uttara Kannada Supa, Bhatkal Ankola, Siddapur29 Udupi

Source:High Power Committee for Redressal of Regional Imbalances

214

No. of GPs

% to district

total

No. of GPs

% to district

total

No. of GPs

% to district

total

No. of GPs

% to district

total1 Bagalkot 163 20 12.27 64 39.26 84 51.53

2 Bangalore Rural 97 26 26.80 26 26.80

3 Bangalore Urban 93 32 34.41 32 34.41

4 Belgaum 485 145 29.90 170 35.05 315 64.95

5 Bellary 189 54 28.57 72 38.10 126 66.67

6 Bidar 175 141 80.57 141 80.57

7 Bijapur 199 153 76.88 46 23.12 199 100.00

8 Chamarajanagar 120 42 35.00 67 55.83 109 90.83

9 Chikballapur 151 24 15.89 44 29.14 61 40.40 129 85.43

10 Chikmagalur 226 59 26.11 46 20.35 105 46.46

11 Chitradurga 185 33 17.84 116 62.70 149 80.54

12 D.Kannada 203

13 Davanagere 230 96 41.74 70 30.43 166 72.17

14 Dharwad 127 27 21.26 44 34.65 71 55.91

15 Gadag 106 15 14.15 54 50.94 69 65.09

16 Gulabarga 337 301 89.32 36 10.68 337 100.00

17 Hassan 258 29 11.24 148 57.36 177 68.60

18 Haveri 208 82 39.42 91 43.75 173 83.17

19 Kodagu 98

20 Kolar 156 30 19.23 90 57.69 120 76.92

21 Koppal 134 61 45.52 35 26.12 38 28.36 134 100.00

22 Mandya 232 100 43.10 87 37.50 187 80.60

23 Mysore 235 33 14.04 111 47.23 57 24.26 201 85.53

24 Raichur 164 133 81.10 31 18.90 164 100.00

25 Ramanagaram 130 75 57.69 32 24.62 107 82.31

26 Shimoga 260 39 15.00 43 16.54 82 31.54

27 Tumkur 321 177 55.14 77 23.99 254 79.13

28 U.Kannada 207 31 14.98 40 19.32 71 34.30

29 Udupi 146

Total 5635 1343 23.83 1244 22.08 1141 20.25 3728 66.16

Source: High Power Committee for Redressal of Regional Imbalances

Appendix - 26.2

Sl. No. District No. of GPs as on

1.4.2007

Analysis of GPs coming under three categories of Backward Taluks as identified by the HPCFRRI

TotalMost backward More backward Backward

215

Appendix - 26.3Selection Matrix of Grama Panchayats

RevenueDivision

District Other Taluks Most Backward Taluks

More Backward

Taluks

Backward TaluksB

anga

lore Tumkur (321) Tiptur (26)

Davanagere (232) Harapanahalli (35)

Chitradurga (185) Challekere (39)

Shimoga (260) Shikaripur (43)

Bel

gaum

Belgaum (485) Khanapur (50)

Bijapur (199) Indi (44)

Bagalkot (163) Badami (34)

Uttar Kannada (206) Siddapura (21)

Gul

barg

a Bellary (191) Hospet (23)

Bidar (174) Aurad (38)

Koppal (134) Koppal (35)

Gulbarga (338) Gulbarga (36)

Mys

ore

Udupi (143) Kundapur (56)

Chamrajanagar (120) Chamrajanagar (42)

Mandya (233) Malavalli (39)

Hassan (257) Belur (37)

Figures in brackets indicate no. of GPs

Source: Third State Finance Commission

216

Appendix - 26.4Analysis of Revenue Mobilisation by GPs Across Different Regions

[Amount in Rupees]

Type of Taluk District Taluk No. of

GPs PopOwn

Revenue 2002-03

Own Revenue 2003-04

Own Revenue 2004-05

Own Revenue 2005-06

Own Revenue 2006-07

Average Own

Revenue (2002-07)

Per Capita Own

Revenue

Average Percapita

Own Revenue

Mos

t Bac

kwar

d T

aluk

s

Bidar Aurad 27 160079 1518969 1506672 1840015 1941785 1508282 1663144.6 10

Bijapur Indi 43 317427 5055158 4714704 7189256 6367637 6728378 6011026.6 19

Chamarajanagar Chamarajanagar 38 250869 2415816 3095303 3277888 3566228 3542972 3179641.4 13

Davanagere Harapanahalli 26 170699 1914650 2915917 3811006 3951574 4178396 3354308.6 20 15

Mor

e B

ackw

ard

Tal

uks

Bagalkot Badami 33 210230 3943067 3403765 5024283 6687553 6604190 5132571.6 24

Chitradurga Challakere 29 208765 2238480 2577949 4502027 3793343 4119439 3446247.6 17

Koppal Koppal 29 201636 3834992 3692754 5353078 5177169 6930403 4997679.2 25

Mandya Malavalli 31 199857 2162439 2247665 4001106 4713272 5291691 3683234.6 18 21

Bac

kwar

d T

aluk

s

Gulbarga Gulbarga 14 101387 1148620 1471601 1763319 2646707 2751616 1956372.6 19

Hassan Belur 35 154832 2594583 2591617 4460297 4916506 6560519 4224704.4 27

Shimoga Shikaripur 40 154290 2635113 2887437 4293391 6071245 6269895 4431416.2 29

Uttara Kannada Siddapur 20 81573 956706 953189 1256438 1407666 1453220 1205443.8 15 23

Oth

er T

aluk

s Belgaum Khanapur 43 191793 2740629 2940980 6175428 6508386 9240854 5521255.4 29

Bellary Hospet 21 139350 2574488 3080603 4530361 5942299 7221091 4669768.4 34

Tumkur Tiptur 25 158241 2914324 2283921 4196712 3779792 3896327 3414215.2 22

Udupi Kundapura 55 335113 9367357 10503793 11123317 13910061 17066447 12394195 37 30Source: Third State Finance Commission

217

C H A P T E R – 2 7

Approach, Methodology and Selection of Indicators

27.1 The 73rd and 74th Constitutional Amendment Act, 1992 made it

mandatory for the States to enact new legislations for local self-

governance by rural and urban local bodies. Accordingly, in Karnataka

also a new Karnataka Panchayat Raj Act, 1993 was enacted replacing

the Karnataka Zilla Parishads, Taluk Panchayat Samithis,

Mandal Panchayats and Nyaya Panchayast Act, 1983 for rural self-

governance. Similarly, Karnataka Municipal Corporation Act, 1976

for City Corporations and Karnataka Municipalities Act, 1964 for other

urban local bodies were suitably restructured for urban self-governance.

27.2 The new legislations are intended to devolve power, functions,

responsibilities and finances to these local bodies in the State with the

ultimate objective of enabling them to function as autonomous institutions.

In accordance with the provisions specified in Articles 243[I] and 243[Y]

as regards creation of State Finance Commission, necessary sections

have also been incorporated in the State’s Acts.

27.3 The main task of TSFC is to ensure that, the functions and

responsibilities given by the State Government to the PRIs and ULBs

should have corresponding matching financial powers and funds at their

command. The TOR given to the TSFC have already been mentioned

earlier. However, it is pertinent here to mention that the TOR are to a large

extent guided by the provisions of the Constitution. The TSFC, within the

framework of its TOR has proceeded to formulate its approach to the tasks

entrusted to it.

27.4 The TSFC had the benefit of referring to the precedents set by the

previous two SFCs. The report of FSFC was a launching pad and bench-


C H A P T E R - 2 7

mark for subsequent SFCs to take up their approach and

methodology. The FSFC termed its approach as “Pragmatic Normative

Approach” which was based on the philosophy that any person living

anywhere in Karnataka should have access to a minimum level of public

services. Whereas, the SSFC took note of requirement of funds to meet the

responsibilities of the lower level governments as well as those of the State

Government and called its approach as “Balanced Financial Allocation

Approach”.

27.5 The outline of responsibilities of the TSFC are given below:

1. Undertake an appraisal of the finances of PRIs and ULBs

2. Determine the size of divisible pool out of net own tax revenue of the

State

3. Determine the share of PRIs and ULBs in the divisible pool

4. Allocate the total share of PRIs among GPs, TPs and ZPs on the basis

of criteria

5. Allocate the total share of ULBs among CCs, CMCs, TMCs, and TPs

on the basis of criteria

6. Assignment of revenue

7. Evolve criteria for determining grants-in-aid and their inter-se

distribution

8. Measures needed for best utilization of resources

Review of Financial Position of Lower Level Governments:

27.6 Besides the main TOR, the TSFC is also expected to review the

financial position of all the PRIs and ULBs. Taking note of the

technological advancements in terms of usage of data entry and

processing, it was decided that the required primary data would be

obtained from all the PRIs and ULBs and also decentralize the

computerization of data at the district and taluk levels itself.


C H A P T E R - 2 7

Accordingly, formats were devised to capture the necessary financial and

other related data. A one day workshop was also held at Bangalore

inviting all the Chief Executive Officers of ZPs and necessary training

was imparted to them regarding filling up of the formats. A time bound

program was formulated for conducting trainings at the district and taluk

levels and for systematic collection of data from the GPs. An in-house

data entry structure was developed and communicated to all the districts

to take up data entry job. Soft copy of the data obtained from all the

districts was consolidated and distilled for further usage.

27.7 A huge database for the GPs and ULBs was created appending data

of few more variables from the secondary source- Census 2001. As a

result of this method, the TSFC could analyse the data making use of

various statistical tools like Correlation, Regression and Ordinary

Least Square [OLS] methods to obtain the relationship among

different variables. The analysis of finances of PRIs and ULBs are discussed

in detail in Chapters 5, 9 and 24.

Aspirations of People:

27.8 The democratic multi level governance system over the years has

created a dependency syndrome in the mindset of people. Any

developmental activity, however small, rests exclusively with the

government. Vote Bank polity is also one of the drivers of this

phenomenon. As a result, one can notice a considerable gap between the

aspirations and availability of resources. The TSFC formed a strategy to

interact with all the stake holders in order to obtain feedback from them.

As such, interactive sessions at the district level were held inviting

Adhyakshya, Upa-Adhyakshya and all the members of ZP; all the

Adhyakshyas, Upa-Adhyakshyas of TPs of the district; Adhyakshyas, Upa-

Adhyakshyas of three GPs from each taluk of the district [one each from


C H A P T E R - 2 7

SC/ST, Woman and General] besides the concerned officers. As regards

ULBs, the TSFC was able to interact with only the officers in view of

delay in conduct of elections and subsequent selection of Mayors, Deputy

Mayors, Adhyakshyas and Upa-Adhyakshyas. However, after the elected

bodies of ULBs were in position, the TSFC had interacted with the elected

representatives of several CCs, CMCs, TMCs and TPs. The views expressed

by the Hon’ble elected representatives of PRIs and ULBs and valuable

suggestions given by them have been taken note of by the TSFC. All these

aspects along with the observations made by the TSFC during its field

visits, along with the historical background of local self governance, the

changes that have taken place in the field of Panchayat Raj Administration

and Urban Governance have been dealt at length in previous Chapters.

Views and Opinions:

27.9 The TSFC felt it necessary to seek views and opinions from

experts, academicians, former chairpersons of SFCs, members of parliament

of Karnataka state and state legislature, NGOs and general public. This was

accomplished by circulating questionnaire, through advertisement in print

media and holding one-to-one discussions.

Vertical Dimension:

27.10 Vertical division relates to the total fiscal transfers from the State

Government to local level governments viz., PRIs and ULBs. As per the first

TOR, the TSFC is expected to devise the principles to determine the

division of the “net proceeds of the taxes, tolls, duties and fees

leviable by the State between the State and Panchayats and also

between the State and Municipalities”. This implies that the TSFC has

to determine the size of the Divisible Pool and the principles regarding its

division. The most important instruments provided in the scheme of

transfers to lower level governments are revenue sharing and grants-in-


C H A P T E R - 2 7

aid. The revenue sharing may either be in the form of share of specific

taxes levied and collected by the state government or a combined share

in the gross/net proceeds of the state government.

27.11 This TOR of the TSFC does not restrict sharing revenue out of

specific taxes, tolls, duties and fees levied and collected by the State

government. In other words, the TSFC is not bound to restrict its

recommendations in respect of sharing of revenues to certain specific taxes

and duties. Instead, if the TSFC decides, it may consider dividing the funds

from the state to the local bodies out of the total proceeds. The FSFC of

Karnataka set a trend in recommending the concept of Non-loan Gross

Own Revenue Receipts [NLGORR] of the state government as the

Divisible Pool. The SSFC retained this concept while formulating its

recommendations. However, the TSFC would base its recommendation as

per the constitutional obligations and the TOR. Hence, the TSFC is of the

view that the Divisible Pool should be the net proceeds of the taxes,

tolls, duties and fees levied and collected by the State government.

27.12 The State Government has deputed a large number of its employees

to the PRIs as per the functions assigned to them. In view of this, the

salaries and allowances are distributed through the PRIs and as a result of

this the percentage share of PRIs in the divisible pool gets magnified. In

fact, during the financial years 2007-08 and 2008-09 there was a quantum

jump in the allocations to the PRIs due to the award of State’s Fifth

Pay Commission. As this is a committed expenditure for the State

Government, the TSFC has taken an approach to de-link and insulate

the salary component from the divisible pool. The TSFC has also

examined the extent of salary component commitment and the trends in

devolution of funds to ULBs and their demands in view of rapid


C H A P T E R - 2 7

urbanization. This approach of the TSFC is a deviation from the approach

of the previous SFCs.

27.13 The rationale for such an approach is that the funds for payment

of salaries, allowances and arrears of salary obviously cannot be

determined using indicators and weightages. This scenario is not

applicable for the ULBs as the employees working in the ULBs are not state

government employees. However, keeping in mind the present system of

devolution of funds to the ULBs, the TSFC feels that the expenditure on

this account should also be neutralized.

27.14 The relative shares of PRIs and ULBs from the divisible pool shall be

decided by selecting such variables which are simple, measurable and

the data is easily understandable and available. The TSFC decided to

assign suitable weights to the indicators which would ultimately determine

the justifiable percentage of share between the rural and urban local

bodies. The indicators selected by the TSFC are Population, Area,

SC&ST Population, Illiterates, Population per Hospital Bed and

Density of Population. Among these indicators, population index is given

the highest weight of 40 percent followed by area with 20 percent weight

and remaining 40 percent is divided equally among the other four

indicators. The rationale for selecting these indicators is explained below:

27.15 Population: The assumption behind the relatively greater

weightage for population is that, expenditure for growth and development is

strongly correlated with the size of population. Population is an important

and widely used factor for allocation of funds, it is simple and transparent

and highly predictable. It targets every citizen who is the ultimate

consumer of public services. The decade 1991-2001 witnessed an increase of

five percent in the urban population of the State; the proportion was 66:34

between rural and urban in the year 2001. With the same trends one could


C H A P T E R - 2 7

expect this proportion to be around 62:38 in 2008. In view of this, the TSFC

decided to assign highest weightage to the population index.

27.16 Area: The area index is meant for addressing the cost disadvantages

to the PRIs and ULBs for provision of basic services to its citizens. There is

a high degree of variation in the proportion of area between rural and

urban. Hence, a moderate weightage should be assigned to this indicator for

maintaining equitable division. As such, the weight for area index is

reduced by 50 percent of population index.

27.17 SC&ST Population: The state has around 120 lakhs SC and ST

population of which 78 percent reside in rural areas and 22 percent are in

urban areas. Locales inhabited by SC and ST population characterize socio-

economic backwardness and hence requires special attention. Therefore,

proportion of SC & ST population between rural and urban areas of the

state has been considered as one of the criteria for vertical division.

27.18 Illiteracy Index: Literacy and level of education are two basic

indicators to measure the development achieved by a group or section of the

society. Thus, areas having more number of illiterates should be supported

for their social advancement. The rural areas of the state are inhabited by

large number of illiterates. The proportion of illiterates between rural and

urban areas, which is in the ratio of 80:20, has been considered as an

indicator for fund distribution.

27.19 Population per Hospital Bed: The previous SFCs had taken

‘population per Hospital bed’ as one of the indicators under index of

backwardness. The level of infrastructure facility in public health could be

measured from this indicator. The physical well being of population also

determines productivity and output. The TSFC decided to retain this

indicator in its scheme of fund distribution.


C H A P T E R - 2 7

27.20 Density of Population: The areas with high density of population

create tremendous pressure on the local bodies for creation of

infrastructure as well as its maintenance. Keeping this point in mind, the

TSFC has decided to use ‘density of population’ as an indicator for

addressing the challenges of congestion and other negative externalities.

Horizontal Dimension:

20.21 Horizontal aspect of division refers to inter-se distribution of funds

among each PRI and ULB. The second part of the first TOR mandates that

the TSFC should determine the share of all the PRIs and ULBs from their

respective share of divisible pool. The demands, suggestion and views of the

stakeholders and the pattern of transfer of funds from the higher level

government to lower level governments and also the analysis of finances of

lower level governments are given utmost importance in this stage of fund

distribution.

27.22 The prorata distribution of Statutory Development Grants to

GPs has been modified based on population size. The economic conditions of

GPs in relation to their location in the three categories of taluks identified

by Dr.D.M.Nanjundappa’s Committee Report are contemplated to

recommend additional statutory development grants. Further, a

“fiscal responsibility” based “incentive grant” for the better

performing GPs is also envisaged. The TSFC suggests upfront earmarking

of funds for this purpose out of the total share of PRIs.

27.23 In the next stage, the share of ZPs, TPs and GPs for the

implementation of programmes/schemes assigned to each one of them

would be based on the Activity Mapping and the schemes transferred as

per Government Order dated October 16, 2004. The three tiers of PRIs

implement the programmes and schemes in accordance with the guidelines

and norms laid down by the state government.


C H A P T E R - 2 7

27.24 The variations in the socio-economic conditions across the State

necessitate equitable distribution of resources. As such, the TSFC is of

the opinion that it is necessary to adopt indicators and apply

weightages thereon to determine the relative shares of each ZP, TP and

GP. The variables selected are Rural Population, Geographical Area,

SC&ST Population and Illiterates. Population and area of the districts

and taluks are given equal weight of 40 for balancing the geographical

characteristics prevailing across the State. SC&ST population and illiterates

which indicate the social backwardness of the area are given weightage

of 10 each. Instead of adopting indicators and weightages to each GP, for

the sake of convenience the shares of each GP will have to be determined

based on the taluk or district level indicators and later distributing as per

the three categories of GPs based on population size.

27.25 As far as ULBs are considered, the TSFC has taken note of present

pattern of transfer funds to them. A concept of Global Level Protection

and Global Level Provision has been adopted by the State Government to

ensure payment of salaries and pension contributions, payment of

electricity charges and repayment of Water Board loans. Upfront

earmarking of funds is ensured before distributing the untied funds on a

modified formula in place of one which was recommended by the SSFC to

each of the ULB. The same set of indicators used for inter-se

distribution among the PRIs is considered for ULBs also with

assigning different weightages. Population has been given the highest

weight of 40 and other three indicators are allotted equal weight of 20 each.

Assignment of Taxes, Duties, Tolls and Fees:

27.26 The second TOR stipulates that the TSFC should determine the

principles which govern “the determination of taxes, duties, tolls and

fees which may be assigned to, or appropriated by Zilla


C H A P T E R - 2 7


Corporations, City Municipal Councils, and Town Panchayats”.

Assigning any additional taxes, duties, fees and tolls to any of the PRIs and

ULBs necessitate strengthening as well as creation of the tax collecting

machinery. As a result, there would be an involvement of additional

expenditure on new positions and other required infrastructure.

Furthermore, the TSFC is of the view that any such assignment will

ultimately result in reduction of own revenue receipts of the State and

to that extent the quantum of funds available for distribution out of

the net proceeds of the State gets reduced. In view of this observation, the

TSFC recommends continuance of present system of assignment and

appropriation of taxes, duties, fees and tolls to PRIs and ULBs.

Grants-in-Aid:

27.27 The third TOR specifies that the TSFC should determine the

principles which govern the “grants-in-aid to the Zilla Panchayats,


City Municipal Councils, and Town Panchayats from the

consolidated fund of the State”. The TSFC is of the view that the ZPs

and the TPs should be given support through this TOR. For this purpose

the TSFC has made categorization of ZPs based on population and TPs

based on categories as identified by Dr.D.M.Nanjundappa Committee.

The TSFC recommends “Block Untied Grants” to the ZPs and TPs from

the State Consolidated Fund. The details are discussed in Chapter-28.

Checks and Balances:

27.28 The TSFC is also expected to suggest measures for checks and

balances, a system of accountability and best utilization of resources. The

best practices like conduct of ward and grama sabhas and also the rights


C H A P T E R - 2 7

available in the Right to Information Act are kept in mind while

formulating the suggestions.

Conclusion:

27.29 The above approach and methodology which are by and large based

on the terms of reference set by the State Government, Constitutional

obligations, views and suggestions, demands and aspirations and the

wisdom of the TSFC has laid down a well-devised criteria for vertical and

horizontal distribution of funds to the lower levels governments. Details of

methods and procedures for distribution of finances to the lower level

governments are discussed in Chapter – 28.


C H A P T E R – 2 8

Methods and Procedures for Distribution of Finances

Background:

28.1 Some of the provisions in the 73rd and 74th Constitutional

Amendment Act, 1992 are “mandatory” in nature. Among them, the

provisions specified in Articles 243[I] and 243[Y] regarding formation of

State Finance Commission and its Terms of Reference [TOR], also fall

in this category. According to the first TOR given to the TSFC, it is

mandated that the “net proceeds of the taxes, tolls, duties and fees

leviable by the State is required to be distributed between the State

and Panchayats and also between the State and Municipalities”. In

other words, the shares of State Government, PRIs and ULBs have to be

determined out of the net proceeds of the taxes, tolls, duties and fees

leviable by the State Government.

28.2 The Constitutional provision makes it very clear that the State’s

share of tax devolution effected by the Central Government should not

be considered for further distribution of resources to PRIs and ULBs. Also,

the resources mobilized by the State through public debt or loans are

outside the scope of this TOR. With this background, the TSFC in this

chapter, has embarked upon suggesting the principles that govern the

determination of

“distribution of net proceeds of the taxes, tolls,

duties and fees leviable by the State between the

State and Panchayats and also between the State

and Municipalities”.


C H A P T E R - 2 8

28.3 In the post 73rd and 74th Constitutional Amendment period, two

State Finance Commissions in Karnataka have already been constituted

and their reports are currently in public domain. Implications of these

reports have been discussed briefly in Chapter-25.

Existing Pattern of Devolution of Finances to PRIs - Some Questions:

28.4 From the sectoral analysis made in Chapter-23 it was observed that

during the financial year 2007-08, out of the funds transferred to ZPs and

TPs, about 35 and 80 percent respectively constitute the salary

component. These percentages in absolute terms are quite substantial

[Rs.4600 crores]. As on 1.4.2008, there are a total of 3,59,994 positions in

PRIs, of which 42,928 are employed in Plan sector and 3,17,066 in

Non-Plan sector.

28.5 It is evident from the data

in Table-28.1 that salaries of

teachers and health workers

who are State Government

employees on deputation in

PRIs are paid through these

institutions. There is a

substantial increase in these

items of expenditure in the

financial years 2007-08 and

2008-09 on account of

implementation of the State’s Fifth Pay Commission Award1. It can

be seen from the Budget provisions that there is a quantum jump in Non-

plan allocations for PRIs in 2008-09 [Diagram-28.1]. Rs.7588 crores has

Table-28.1 Posts in Major Departments/Sectors of PRIs

Department/Sector Plan Non-Plan Total

General Education 7959 226556 234515Medical and Public Health

6104 27135 33239

Social Security & Welfare 8137 8598 16735

Animal Husbandry 3379 11219 14598

Family Welfare 12290 614 12904Other Rural Development Programs

1053 11394 12447

Agriculture & Horticulture 10076 10076

SC,ST & OBC Welfare 3474 5296 8770

Public Works 7392 7392

1 Medium Term Fiscal Plan [MTFP] for Karnataka 2008-12, Finance Department, GOK, 2008


C H A P T E R - 2 8

Diagram 28.1: Non-plan Allocations to PRIs

4869

5869

7588

2006-07 A/c 2007-08 RE 2008-09 BE

Rs.

cror

esbeen allocated for the year 2008-09 as against an allocation of Rs.5869

crores provided during

the previous year 2007-

08. This is due to the

payment of arrears of

salaries of financial year

2006-07. In any case,

there would be a normal

growth of 2.75 percent in

the basic pay and 10

percent in dearness

allowance.

28.6 Having noticed such a phenomenon in transfer of funds to the PRIs,

is it appropriate to adopt parameters or indicators and apply

weightages thereon to determine “the distribution of net proceeds of the

taxes, tolls, duties and fees leviable by the State between the State and PRIs

and also between the State and ULBs”. This is discussed in detail in the

later sections.

Composition of State’s Revenue Receipts:

28.7 The taxes, tolls, duties and fees leviable by the State are broadly

classified as Own Tax Revenue and Own Non-tax Revenue. Components of

these are shown in Diagram-28.2.


C H A P T E R - 2 8

Diagram-28.2 Flow Chart on composition of State’s Revenue Receipts

R E V E N U E R E C E I P T S

Own Tax Revenue Own Non-Tax Revenue

Resources from the Centre

Commercial Taxes Non-Commercial Taxes

State Excise Agricultural Income Tax

Professional Tax

Sales Tax

Entry Tax

Entertainment Tax

Betting Tax

Luxury Tax

Motor Vehicle Tax

Stamps & Registration Fees

Land Revenue

Electricity Duty and Tax

Other Taxes & Duties*

Interest Receipts

Dividends & Profits

General Services

Social Services

Economic Services

Devolution Grants

Source: Derived from Karnataka State Development Report-2007, Planning Commission, GOI and Budget Documents of GOK * consisting of Forest Development Tax, Health Cess and Education Cess

28.8 Before suggesting the share of PRIs and ULBs out of the net proceeds

of taxes, tolls, duties and fees leviable by the State, it may not be out of

context here to look into the performance of these fiscal indicators. Details

of revenue receipts under each of these items as shown in the above flow

chart during the years from 1998-99 to 2007-08 are given in Appendix-

28.1. State’s financial position to a larger extent depends on consistent

growth in its tax revenues. Table-28.2 shows the growth in the State’s

revenues under major taxes during last 10 years.


C H A P T E R - 2 8

Table-28.2 Major Own Tax Revenues of Karnataka

[Actuals in Rs.Crores] Commercial Tax State Excise Stamps & Regn Motor Vehicle Tax Year

Actuals Growth Rate

Actuals Growth Rate

Actuals Growth Rate

Actuals Growth Rate

1998-99 4811 1005 548 387

1999-00 5305 10.27 1215 20.89 566 3.23 449 16.04

2000-01 6166 16.22 1523 25.34 638 12.78 502 11.81

2001-02 6079 -1.41 1977 29.79 855 33.99 712 41.96

2002-03 6313 3.85 2094 5.93 1115 30.44 676 -5.15

2003-04 7733 22.49 2334 11.45 1356 21.55 800 18.40

2004-05 10057 30.05 2806 20.20 1760 29.81 983 22.86

2005-06 11484 14.19 3397 21.07 2212 25.70 1105 12.46

2006-07 13714 19.42 4495 32.33 3206 44.92 1374 24.29

2007-08 16474 20.13 4669 3.87 3813 18.93 1806 31.44 Cumulutive Growth Rate 242 364 596 367

Source: Finance Department, GOK

28.9 Commercial Taxes are the main source of own tax revenue of the

State; of which, sales tax on goods is the major item. Karnataka has adopted

the Value Added Tax [VAT] system in tune with national design from the

financial year 2005-06. The transition to VAT resulted in negligible growth

in 2005-06 and around 20 percent in 2006-072. In the financial year 2007-

08, a major change was introduced in the State’s Excise Policy by imposing

a ban on country liquor. As a result of this, there was a substantial revenue

loss of about Rs.2000 crores. However, this gap was reduced due to

increased consumption of Indian Made Liquor. Stamps & Registration fees

is next main supplier to the own tax revenue receipts of the State. It can be

seen that until the financial year 2006-07, growth in the revenue from this

source was very encouraging. However, in the financial year 2007-08

revenues from this source was lower than the budget estimates. This is

attributed to the sharp reduction in the number of documents registered in

important revenue contributing areas in and around Bangalore city.

2 MTFP for Karnataka 2008-12, Finance Department, GOK, 2008


C H A P T E R - 2 8

Growth in the revenue from the Motor Vehicles Taxes has increased during

last five years after recording a negative growth during the financial year

2002-03.

Past and Present Trends in Devolution of Finances:

Diagram-28.3Trends in Distribution of Funds to PRIs and ULBs vis-à-vis Own Revenue Mobilisation in Karnataka

0

5000

10000

15000

20000

25000

30000

35000

4000019

98-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08 (R

.E)

2008

-09 (B

.E)

Rs.

cror

es

Ow n Revenue Receipts (Tax&Non-Tax) PRIs ULBs

28.10 An analysis of trends in distribution of funds to PRIs and ULBs vis-

à-vis Own Revenue Receipts may complement to assess the share of lower

level governments. The

trends in Diagram-28.3

indicate a steep raise in the

own revenue receipts of the

State from the year 2003-04.

At the same time, one can

observe that there was a

secure pattern in

distribution of funds to PRIs

and ULBs. It can also be

noticed that for the financial

years 2007-08 and 2008-09 higher allocations have been proposed for

meeting additional expenditures due to the implementation of the

State’s Fifth Pay Commission Award.

28.11 In chapter-25, the recommendations of previous SFCs of

Karnataka have already been discussed. Nevertheless, it is important here

to remember that the earlier SFCs recommended distribution of funds to

lower level governments from the Gross Own Revenue Receipts of State.

The state government had accepted this method while considering the

recommendations of FSFC. But, it retreated while considering the

recommendations of SSFC. Instead, it was ordered that the distribution

would be based on Net Own Revenue Receipts of State. It is evident from


C H A P T E R - 2 8

the analysis as shown in Table-28.3 that from the financial years 2003-04

till 2007-08 there was decline in Distribution of funds to lower level

governments. But it was inevitable that for the financial year 2008-09 a

higher allocation had to be maintained in order to meet the expenditure for

payment of arrears of salaries. As a result, one can notice that the

percentage of devolution as recommended by SSFC for the PRIs has been

achieved atleast during the financial year 2008-09. This may not be the

situation during the financial year 2009-10 and onwards as there would be a

normal growth in the basic pay and dearness allowance of employees.

Table-28.3

Distribution Pattern of Funds to PRIs and ULBs from Gross Own Revenue Receipts of State

[Rs.in Crores] Distribution of funds to lower level

governments Year

Own Revenue Receipts

(Tax&Non-Tax)

PRIs Percent ULBs Percent Total Percent

1998-99 8413 3089 36.72 332 3.95 3421 40.66 1999-00 9356 3500 37.41 416 4.45 3916 41.86 2000-01 10702 3854 36.01 531 4.96 4385 40.97 2001-02 10947 4077 37.24 564 5.15 4641 42.40 2002-03 11717 4409 37.63 574 4.90 4983 42.53 2003-04 15529 4392 28.28 629 4.05 5021 32.33 2004-05 20545 5246 25.54 798 3.88 6044 29.42 2005-06 22506 6466 28.73 1159 5.15 7625 33.88 2006-07 27399 7712 28.15 1639 5.98 9351 34.13 2007-08 (R.E) 29020 8866 30.55 1904 6.56 10770 37.11 2008-09 (B.E) 33808 11058 32.71 2995 8.86 14053 41.57


TSFC Adopts NLNORR concept:

28.12 The TSFC, taking cognizance of the mandate given and action taken

by the State Government on the recommendations of SSFC, has decided to

make recommendations based on Net Own Revenue Receipts of the

State. It is pre-requisite here to have data pertaining to Net Own Revenue

Receipts of the State. As data on this count was not readily available in any


C H A P T E R - 2 8

of the budget documents, the TSFC sought information from the Finance

Department, Government of Karnataka. The data on Net Own Revenue

Receipts of the State for the financial years 2005-06 to 2007-08 and

projections for the financial years 2008-09 to 2012-13 was provided by the

Finance Department. It was also clarified that these figures are without

netting collection charges. Nonetheless, the TSFC has decided to

formulate its procedures and methods based on this data. The Distribution

of funds to lower level governments based on Net Own Revenue Receipts of

State is given in Table-28.4.

Table-28.4

Distribution Pattern of Funds to PRIs and ULBs from Net Own Revenue Receipts of State

[Rs.in Crores]

Distribution of funds to lower level governments Year

Net Own Revenue

Receipts * (Tax&Non-

Tax) PRIs Percent ULBs Percent

Total Percent

2005-06 20065 6466 32.23 1159 5.78 7625 38.002006-07 24941 7712 30.92 1639 6.57 9351 37.492007-08 (R.E)

28223 8866 31.41 1904 6.75 10770 38.16

2008-09 (B.E) 32147 11058 34.40 2995 9.32 14053 43.71

* It is without netting collection charges, Source: Finance Department, GOK

A Separate Devolution Component for Salaries:

28.13 The TSFC is of the view that it would be inappropriate and

unreasonable to use any indicators and weightages to determine the share

of PRIs to pay salaries and arrears of pay. In view of this situation TSFC

recommends that the salary component of officials working in the

PRIs should be de-linked while working out the total share of PRIs

and ULBs.


C H A P T E R - 2 8

28.14 TSFC recommends that the salary component of officials

working in the PRIs on deputation should be determined as a separate

component of the devolution. This should be based on the actual

requirement. The TSFC opines that, this will insulate the PRIs from getting

lesser funds owing to periodical growth in the salary expenditure. The

TSFC reiterates that there should not be any change whatsoever in

the existing procedures of release of funds to the PRIs for payment of

salaries. The ZPs and TPs will continue to exercise superintendence and

control pertaining to release of funds towards salary, monitoring the

expenditures under salary heads of accounts, review and such other powers.

This should be included as an exclusively separate section in the

Budget Link Document prepared for PRIs.

An Appropriate Devolution Pattern:

28.15 In view of the facts discussed in the preceding paragraphs, the TSFC

recommends a new pattern of devolution of finances to PRIs and ULBs.

There are three main components in the scheme of devolution. The

distinctiveness of each of the three components is as follows;

Component A: Comprises of salary of officials of various

sectors/departments working in PRIs both

under Plan and Non-plan.

Component B: Comprises of devolution of finances to the

PRIs [Statutory and Incentive Grants to GPs

and for implementation of programmes and

schemes under Plan and Non-plan].

Component C: Comprises of devolution of finances to the

ULBs [Global Protection, Global Provision

and SFC grants].


C H A P T E R - 2 8

28.16 In chapter-23, TSFC has assessed the salary component under

Plan and Non-plan grants allocated to PRIs based on the Budget Estimates

for the financial year 2007-08. It was found that around 51 percent of

funds allocated were meant for payment of salaries. Keeping this in mind

and the commitment of State Government towards payment of pensions,

interests, debt servicing and other committed expenditure and also its

revenue sources from Central Government, public debt and borrowings, the

TSFC recommends that 33 percent of Net Own Revenue Receipts of

state should be distributed to PRIs [Component-B]and

ULBs[Component-C].

Relative Shares of PRIs and ULBs:

Box-28.1 Criteria for determination of Financial Share

of PRIs and ULBs Sl. No.

Weightage (Percent)

Indicator

1 Population 40 2 Geographical Area 20 3 SCs & STs Population 10 4 Illiterates 10

5 Population per Hospital Bed

10

6 Density of population 10

28.17 The focus now shifts to evaluate the relative shares of PRIs and

ULBs. To accomplish this goal, parameters or indicators alongwith

relative weightages have been identified [Box-28.1]. In doing so, the

functions and powers

assigned to these bodies

have been taken into

account. It was observed

that in addition to the

obligatory functions, the

PRIs are also required to

implement innumerable

schemes and programmes,

whereas, the functions of ULBs are mainly obligatory in nature. The

criteria and weightages selected by the previous SFCs are mentioned in

Chapter-25. The TSFC, after taking into consideration changes in the

environment and functions of ULBs has decided to append one more

indicator while retaining all the indicators selected by the SSFC

and has restructured the assignment of weightages [Box-28.1].


C H A P T E R - 2 8

Indices for Calculation of Relative Shares:

28.18 The following method has been adopted for calculating the Indices to

determine relative shares of PRIs and ULBs and the weights assigned to

each indicator are shown in Table-28.5;

616-1

100pri

PRIs of Share −×= w

616-1

100pui

ULBsof Share −×= w

Where,

pri=proportion of rural indicator pui=proportion of urban indicator w= weightage assigned to ith indicator

Table – 28.5 Weights Assigned to Indicators for Determination of

Relative Shares of PRIs and ULBs for Distribution of Funds

Criteria for PRIs Propor tions

Share of

PRIs

Criteria for ULBs Propor tions

Share of

ULBs Proportion of rural population

66.01 26.41 Proportion of urban population

33.99 13.59

Proportion of rural area 97.28 19.46 Proportion of urban area 2.72 0.54Proportion of rural SC&ST Population

77.75 7.78 Proportion of urban SC&ST Population

22.25 2.22

Proportion of rural Illiterates

79.97 8.00 Proportion of urban Illiterates 20.03 2.00

Proportion of rural population per hospital bed

81.36 8.14 Proportion of urban population per hospital bed

18.64 1.86

Proportion Density in rural areas

5.14 0.51 Proportion Density in urban areas

94.86 9.49

Total PRIs Share 70.28 Total ULBs Share 29.72

Rounded off to 70% Rounded off to 30%Source: Census 2001

28.19 Thus, the relative shares of PRIs [Component-B] and ULBs

[Component-C] would be in the ratio 70:30 out of 33 percent of Net Own

Revenue Receipts of the state. In other words, 23 percent of Net Own


C H A P T E R - 2 8

Revenue Receipts of the state is the share PRIs and 10 percent of Net

Own Revenue Receipts of the state is the share of ULBs. If the

projection figures related to Net Own Revenue Receipts of the state as

indicated by the Finance Department are considered as basis for

distribution, then the relative shares of PRIs and ULBs for distribution of

funds in absolute terms for the financial years 2008-09 to 2012-13 is as

shown in Table-28.6.

Table-28.6

Relative Shares of funds to be distributed to PRIs and ULBs from Net Own Revenue Receipts of State

[Rs.in Crores]

Year

Net Own Revenue Receipts*

(Tax&Non-Tax) (Projections)

Share of PRIs (23%)

[Component-B]

Share of ULBs (10%)

[Component-C]

2008-09 32147 7394 32152009-10 36779 8459 36782010-11 41958 9650 41962011-12 47783 10990 47782012-13 54425 12518 5443

* It is without netting collection charges

Distribution of Finances among PRIs and ULBs:

28.20 In the second part of the first TOR, the TSFC has a mandate to

determine the principles which should govern the allocation

between the Zilla Panchayat, Taluk Panchayats, Grama

Panchayats, Municipal Corportions, City Municipal Councils,

Town Municipal Councils and Town Panchayats to the respective

shares of “net proceeds of the taxes, tolls, duties and fees leviable by the

State”. In other words, the TSFC has to work out the share of each ‘PRI’ of

its share of 23 percent [Component-B] of Net Own Revenue Receipts of

the state. Similarly, share of each ‘ULB’ of its share of 10 percent

[Component-C] of Net Own Revenue Receipts of the state has to be


C H A P T E R - 2 8

determined. The finances of these institutions have been analyzed in

Chapters 5, 9, 23 & 24. The analysis revealed wide ranging differentials

among the lower levels of governments. The TSFC has decided to adopt

indicators and apply weightages thereon for determination of

share of institutions/local bodies. The principles for distributing funds

to the lower level governments in Karnataka are described in the following

paragraphs:-

Distribution of funds to PRIs:

28.21 Having determined the share of PRIs under Component-B as 23

percent of Net Own Revenue Receipts of the state, in the next stage of

devolution, the TSFC has to work out share of each PRI. In other words,

Component-B is further divided into sub-components in the following

manner;

Component-B1: Statutory Development Grants to GPs.

Component-B2: Additional Statutory Development Grants to GPs.

Component-B3: Incentive Grants to GPs.

Component-B4: Scheme Obligated Distribution of Funds to ZPs, TPs and GPs.

Grama Panchayats:

28.22 Grama Panchayats- the lowest tier of governance are required to

provide basic services at the village level and they have also been assigned

taxing powers to mobilize local revenue. The main source of local revenue of

Grama Panchayats is through property tax which is lax in most local

governments. They often plead their inability to collect taxes giving reasons

like: low income population, dependence of agricultural labour on seasonal

income, migration of labour force, natural calamities including scarcity and

floods and in many instances property owner’s refusal to comply with

mandated tax laws. There is also a compelling reason for members of

Grama Panchayats not to force tax collection for fear of “loosing vote


C H A P T E R - 2 8

bank”. This has resulted in non-clearance of payments by the GPs towards

electricity consumption. In view of this situation, the state government had

to resort on deduction at source the amounts due for payments, from the

statutory development grants being given to them. The quantum of

statutory development grants to Grama Panchayats has been regularly

enhanced since 1993 from rupees one lakh to rupees five lakhs till 2007-

08. From the financial year 2008-09 this has been further enhanced to

rupees six lakhs per GP. There was a general demand from the elected

representatives of these institutions that these grants are inadequate. It

was also demanded that the anomaly of giving a fixed statutory

development grants irrespective of the size of GPs should be rectified.

28.23 The TSFC has deliberated on these aspects and taken note of the

fact that the statutory development grants distributed is grossly

inadequate and distribution of these grants at a flat rate per GP is also

inappropriate. Selection of indicators and applying weightages

thereon for determination of share of each of over 5600 Grama

Panchayat would be cumbersome. Instead, the TSFC recommends the

following pattern of distribution for statutory development grants

to GPs:

First - based on population as shown in Box-28.2.

Second- the TSFC has noted the disparities prevailing

across the regions of the State and on this issue the

findings and recommendations of

Dr.D.M.Nanjundappa’s Committee Report are

contemplated to recommend additional statutory

development grants.

Third - a “fiscal responsibility” based “incentive grant”

for the better performing GPs.


C H A P T E R - 2 8

Box-28.2 ♦ Category I : Population Below 4000 [14%] ♦ Category II : Population 4001 to 8000 [71%] ♦ Category III : Population Above 8000 [15%]

Component-B1: Statutory Development Grants:

28.24 Based on Census 2001 data, it was found that the above categorized

GPs are approximately in the ratio 14:71:15. In the financial year

2008-09, an amount Rs.342.20 crores has been allocated to GPs towards

this item of expenditure. Considering all these aspects, the TSFC

recommends distribution of statutory development grants to the

above three categories of GPs in the following manner;

Category I : Rupees 9.00 lakhs per GP per year

Category II : Rupees 12.00 lakhs per GP per year

Category III : Rupees 15.00 lakhs per GP per year

28.25 As this pattern of distribution recommended by the TSFC gives the

GPs adequate financial leverage to meet their demands, it is

recommended that the existing exclusive grant given to GPs for

maintenance of water supply schemes under Head of Account 2215

should be merged with the above pattern of distribution. It was noticed

that an amount of Rs.63.52 crore has been allocated for this head of

account during the financial year 2008-09.

Component-B2: Additional Statutory Development Grants for Relatively Backward GPs:

28.26 GPs located in backward talukas have been analysed and discussed

in detail in Chapter-26. The TSFC is of the view that, the GPs located in

backward regions of the state should be given special consideration. As

such, the TSFC recommends consideration of backwardness factor.

TSFC recommends distribution of an additional amount over and above the


C H A P T E R - 2 8

Statutory Development Grants to the GPs located in three categories of

backward talukas in the following manner:

♦ All GPs located in ‘Backward Taluks’: Rs. 1.00 lakh per GP per year

♦ All GPs located in ‘More Backward Taluks’: Rs. 2.00 lakh per GP per year

♦ All GPs located in ‘Most Backward Taluks’: Rs. 3.00 lakhs per GP per year

Component-B3: Incentive Grant for Performance:

28.27 In Chapters-5 and 26, an attempt was made to measure the fiscal

performance of GPs vis-à-vis the influencing factors of fiscal performance.

The related DCB datasets of GPs were analyzed and it was noticed that

during the period 2001-02 to 2006-07 there was a declining trend in the

number of GPs collecting higher percent of taxes against their total

demand. If this trend needs to be reversed, an element of

competitiveness and reward system should be introduced.

28.28 The SSFC had also suggested an incentivisation scheme for

both GPs and ULBs. The state government has not implemented

incentivisation scheme for GPs. However, from the financial year 2006-07

vide G.O.No.UDD 121 SFC 05, dated:12.4.2006 an amount of Rs.50.00

crores has been earmarked for each year for implementation of an

incentivisation scheme for ULBs based on the following revenue and reform

performance. The Director of Municipal Administration has been

authorized to draw up a monitorable matrix for this fund;

♦ Adoption of self assessment scheme

♦ Actual increase in revenue receipts

♦ Adoption of double entry accounting system

♦ Per capita performance of tax and water charges collection

♦ Adoption of e-governance initiatives

28.29 The TSFC strongly reiterates that an incentive scheme for GPs

should also be drawn up based on their performance in fiscal responsibility


C H A P T E R - 2 8

and other functions. TSFC feels that the amount of reward should be

attractive so as to create competitiveness among the GPs. The TSFC

recommends that an amount of Rs.3.00 lakhs should be given as

‘incentive grant’ to a GP every year. The TSFC has identified the

following parameters;

Sl. No.

Parameters Performance

1 Own Tax Mobilisation Collection of property tax should be 75% and above to the total demand for the financial year (arrears & current year’s demand)

2 Collection of Water Rates Collection of water rate should be 75% and above to the total demand (arrears & current year’s demand)

3 Listing of Properties & Providing satisfactory Civic Amenities

All properties including illegal construction that are liable to be taxed as per KPR Act, 1993 should be listed and taken into ‘Demand Register’.

Streetlights, Drinking Water supply and Drainage

4 Extent of coverage of Sanitary facilities

10% of the households should be provided with sanitary latrines

5 Computerisation Creation of Databank containing all details pertaining to activities of GP. Adoption of appropriate Software for proper monitoring.

Creation of Website.

28.30 The TSFC assigns 20 weightage points to each of the above

parameters and recommends sanction of Incentive Grant accordingly. In

other words, if any one parameter is achieved, the quantum of incentive

grant will be 20 percent of Rs.3.00 lakhs i.e. Rs.60,000/= per annum. The

TSFC further recommends that monitoring mechanism may be designed by

the RD&PR Department to identify the eligible GPs as to their satisfactory


C H A P T E R - 2 8

performance in respect of the parameters fixed. The RD&PR Department

should design a suitable format to assess and quantify the performances of

each of the parameters.

28.31 Initially, every year an amount of Rs.50.00 crores should be set

apart as Incentive Grant. If more GPs perform, state government should

provide the requisite funds.

28.32 To sum up, the total financial implications towards the entitlement

of GPs according to the scheme of distribution recommended by the TSFC

is shown in Table-28.7. It can be seen that, including the incentive scheme,

the net financial implications for the financial year 2008-09 is about Rs.400

crores which is around 90 percent of the allocations made during the

year 2008-09.

Table-28.7 Financial Implications for the Entitlement of GPs towards Statutory Development Grants (SDG), Additional SDG and

Incentive Scheme

Entitlement Title Category of GP Amount of Entitlement (Rs.Lakhs)

No. of

GPs

Financial Implications (Rs.Lakhs)

Statutory Development Grants Category I 9 790 7110 Category II 12 4000 48000 Category III 15 846 12690 Sub-Total 5636 67800 Additional Statutory Development Grants All GPs in Backward Taluks 1 1141 1141 All GPs in More Backward Taluks 2 1244 2488 All GPs in Most Backward Taluks 3 1343 4029 Sub-Total 3728 7658 Incentive Grant for Performance

Performance in Fiscal responsibility and other functions 5000

Gross Implications 80458 Allocations in 2008-09 Statutory Development Grants 34220

Grants for Maintenance of Water Supply Schemes 6352

Sub-Total 40572 Net Implications 39886

Source: TSFC


C H A P T E R - 2 8

28.33 A few illustrations (excluding Incentive Component-B3) are given in

Box-28.3. In Karnataka,

as per the distribution

pattern recommend by

TSFC, the Statutory

Development Grants are

in the range-Rs.9

lakhs and Rs.18 lakhs.

Recommendations on

implementation of

programmes and

schemes are dealt separately.

4. A GP with a population of above 8000 and located in ‘Other Taluk’ is eligible to receive Rs. 15 lakhs as ‘SDG’.

3. A GP with a population of 4000 which is located in ‘Other Taluk’ is eligible to receive Rs. 9 lakhs as ‘SDG’ and nil additional ‘SDG’.

2. A GP with a population of 5000 which is located in ‘Backward Taluk’ is eligible to receive Rs. 12 lakhs as ‘SDG’ and Rs. 1 lakhs as ‘additional SDG’. The total entitlement would be Rs. 13 lakhs.

Box-28.3 Illustrations

1. A GP with a population of more than 8000 which is located in ‘Most Backward Taluk’ would have an entitlement of Rs. 15 lakhs as ‘SDG’ plus Rs. 3 lakhs as ‘additional SDG’. The total entitlement would be Rs. 18 lakhs.

Component-B4: Programme/Scheme Obligated Distribution of Funds:

28.34 In the previous section, the entitlement of GPs with regard to

statutory development grant, backwardness component and

incentive grants were determined out of the ‘PRI’ [Component-B] share

of 23 percent of Net Own Revenue Receipts of state. It was also estimated

that around Rs.805 crores is the total requirement. After setting aside these

funds upfront for the GPs, the remaining funds should be utilized for

distribution among the three tiers of PRIs for the implementation of

programmes/schemes assigned to each of them based on the Activity

Mapping and the Government Order dated October 16, 2004, which is

discussed in Chapter-9 and 23. The TSFC terms this distribution as

“Programme/Scheme Obligated Distribution of Funds”. The three

tiers of PRIs implement the programmes and schemes in accordance with

the guidelines and norms laid down by the state government.


C H A P T E R - 2 8

Inter-se distribution of funds:

28.35 In the previous paragraph the TSFC has determined the principle

for “Programme/Scheme Obligated Distribution of Funds”. In the

final stage of distribution of funds to the PRIs, the relative shares of each of

Zilla Panchayat, Taluk Panchayat and Grama Panchayat should be

determined. While analyzing the finances of ZPs and TPs in Chapter-9 it

was observed that the variables viz., population, area as well as to some

extent the SCs and STs population and the number of illiterates were the

main determinants for distribution of plan grants. An important aspect of

distribution is that the quantum of allocation made in a financial year to a

district was never reduced compared to the preceding financial year. In view

of these facts, it is pertinent that the TSFC should take utmost care while

suggesting the pattern for determining the shares of each ZP, TP and GP.

The TSFC is of the opinion that it is necessary to adopt indicators and

apply weightages thereon to

determine the relative shares of

each ZP, TP and GP. Instead of

adopting indicators and

weightages to each GP, for the

sake of convenience the shares

of each GP will have to be

determined based on the taluk or

district level indicators. The criteria alongwith weightages for

determination of financial shares of each ZP, TP and GP are given in

Box-28.4.

Sl. No.

Indicator Weightage (Percent)

1 Rural Population 40 2 Geographical Area 40

3 SCs & STs Population

10

4 Illiterates 10

Box-28.4 Criteria for Determination of

Financial Share of each ZP, TP and GP

Formula for Calculation of Relative Shares each ZP, TP and GP:

28.36 The Distribution Index of each ZP and TP is determined using the

datasets of 2001 census. The rationale for selection and assignment of

weightages to these indicators is explained in Chapter-28. The following


C H A P T E R - 2 8

formula is considered for computing the shares of each ZP and TP. The

combined wightages of talukas are used for computing the

entitlements of GPs located in a particular taluka; the share of each GP

in that taluk should be calculated using the “categorization of GPs

concept as shown in Box-28.2” based on population. The proportions of

each of the above indicators and the weights for each district and taluka are

computed and given in Appendix-28.2 and 28.3 respectively.

414-1

176-129-1 100pi TPor each ZP of Share −×= wi

where,

pi= proportion of indicator ‘i’

wi= weightage of indicator ‘i’

1-29= Number of ZPs for 1-29

1-176= Number of TPs for 1-176

28.37 The foregoing pattern of distribution of funds to the PRIs as

recommended by the TSFC facilitates the PRIs to have a healthy

financial base; in turn they could fulfill the aspirations of people. The

TSFC recommends that the value added finances should be judiciously

utilized for those programmes and schemes which would be a catalyst to

the human development.

Component C: Distribution of Funds to ULBs:

28.38 The TSFC has already recommended the relative shares of PRIs

[Component-B] and ULBs [Component-C] in the ratio 70:30 out of 33

percent of Net Own Revenue Receipts of the State. In other words, it is

23 percent for the PRIs and 10 percent for the ULBs of Net Own

Revenue Receipts of the state. If the projection figures related to Net Own

Revenue Receipts of state as indicated by the Finance Department are

considered as basis for distribution, then the relative share of ULBs for


C H A P T E R - 2 8

distribution of funds in absolute terms for the financial years 2008-09 to

2012-13 will be as shown in Table-28.6. Having recommended the share of

ULBs, the next stage of distribution of funds is the share of each ULB in

the state. The TSFC is of the view that distribution of funds to the ULBs

also should be based on parameters and weightages. As such, the principles

for determination of shares of each ULB are explained in the following

paragraphs.

28.39 Currently, the State Government is devolving funds to ULBs

according to the scheme of devolution stipulated vide G.O.No.UDD 121

SFC 05, dated:12.4.2006 [Annexure-15]. In this scheme of devolution, a

concept of Global Level Protection and Global Level Provision has

been adopted. Under Global Level Protection, the committed expenditure

on salaries and pension contribution to municipal employees, shortage in

repayment of loans and power sector dues are protected. Under Global

Level Provision, the following items are included;

1. The requirement towards shortfall in Urban Local Bodies share for

water supply and sewerage projects should be earmarked.

2. Shortages in externally aided projects arising out of fiscal space

should be earmarked for each year, subject to a maximum of Rs.50

crores per annum.

3. Settlement of one time dues comprising the dues of BWSSB, audit

charges, pension arrears in 2005-06.

4. In respect of arrears of cess dues, 50% will be cleared during 2005-06

and balance 50% in 2006-07.

5. An amount of Rs.10.00 crore would be earmarked each year towards

water scarcity fund and kept with Director of Municipal

Administration with the stipulation that this should be released for


C H A P T E R - 2 8

non-capital relief work and measures through Deputy

Commissioners in urban areas.

6. In addition, as recommended by, a common purpose fund of Rs.5.00

crore shall be set apart each year and kept with Director of Municipal

Administration for utilizing the same for such common activities

benefiting several ULBs.

7. An amount of Rs.20.00 crores shall be earmarked for special

circumstances or special events connected to development in ULBs.

8. An amount of Rs.50.00 crores shall be earmarked for each year from

2006-07 as Incentive Fund and given to ULBs for the following

revenue and reform performance; Adoption of Self Assessment

Scheme, Actual increase in revenue receipts, Adoption of Double

Entry Accounting System, Per capita performance of Tax and Water

Charges collection, Adoption of e-governance initiatives.

9. An amount of Rs.10.00 crore shall be earmarked for rain water

harvesting and shall be released to ULBs based on action plan from

the year 2006-07.

28.40 Upfront earmarking of funds is ensured before distributing the

untied funds on a modified

formula in place of one which

was recommended by the SSFC

to each of the ULB. The

variables and weights used for

this are given in Box-28.5. The

State Government during the

fiscal 2007-08 has allocated the

SFC grants to the ULBs as per

the procedures incorporated in the Government Order referred to above

Sl. No.


1 Population 40 2 Geographical Area 15 3 Illiterates 10 4 Road Length 15

5 Normative Gap of O&M & PCPTCD

20

Source: Urban Development Dept., GOK

Box-28.5 Criteria for Determination of Financial Share of each ULB


C H A P T E R - 2 8

and GO No.UD 22 SFC 2007 dated:05-06-2007. It can be seen from Table –

28.8 that about more than 50% is meant for Global Level Protection and

Global Level Provision. Whereas, about 46% is distributed based on

modified formula [Box-28.5] towards Untied grants to the ULBs.

Table – 28.8

Devolution of funds to ULBs under SFC for the year 2007-08

Sl. No.

COMPONENTS 2007-08

(Rs. Lakhs) % to sub-

total % to total

A GLOBAL PROTECTION A1 Salaries to Municipalities (100%) (*) 16341.00 18.48 A2 Salaries to Corporations (<100%) (*) 18841.00 21.31 A3 Pension contribution 700.00 0.79 A4 Power Sector Dues 36500.00 41.28

A5 Repayment of Water Board Loans (on behalf of ULBs) 12912.49 14.60

A6 Repayment of KREDL (Securitisation on payment of Electricity dues)

2686.90 3.04

A7 DUDC - Establishment charges 439.19 0.50 A8 Fund for KMDS 0.00

Sub-Total A 88420.58 100.00 46.43 B GLOBAL PROVISION

B1 ULB Share/SFC project Share for water supply and sewerage

5200.00 36.62

B2 Water Scarcity Fund 1000.00 7.04 B3 Common Purpose Fund 500.00 3.52

B4 Fund for Special Circumstances or Special events connected to development in ULBs

4000.00 28.17

B5 Incentivisation Fund 3000.00 21.13 B6 Rain Water Harvesting 500.00 3.52 B7 Eradication manual scavenging 0.00 B8 Funds for Fire Services 0.00

Sub-Total B 14200.00 100.00 7.46 C UNTIED AMOUNT 87818.61 46.11 Total A + B + C 190439.19 100.00

Source: Urban Development Department, Government of Karnataka * Salaries to ULBs worked out by effecting 10% increase over 2006-07

28.41 Making 100 percent Global Level Protection for payment of

salaries and pension contribution for lower level ULBs and not providing

100 percent protection to higher level ULBs may lead to discrimination,

although the lower level of ULBs require more support of the state

government. As such, the TSFC recommends 100 percent

neutralization of salary and pension components of all the ULBs


C H A P T E R - 2 8


28.44 The pattern of transfer of finances to the PRIs and ULBs

recommended by Third State Finance Commission is summarized as

Devolution Matrix and given in Table-28.9.

28.43 ULB-wise weights of each variable and the combined weight are

given in Appendix-28.4.

28.42 To summarize, the Component-C is divided into three sub-

components in the following manner;

including the Bruhat Bangalore Mahanagara Palike and CCs. The

TSFC recommends

continuation of Global

Protection and Global

Provision. Upfront

earmarking of funds to

these items should not

exceed 60% of the total

devolution to the ULBs.

The balance amount should be distributed as SFC grants to all the

ULBs based on the criteria as suggested in Box-28.6. The following formula

is used to derive share of each ULB;

414-1

n-1 100pi each ULB of Share −×= wi

where,

pi= proportion of indicator ‘i’ wi= weightage of indicator ‘i’ 1-n= number of ULBs

Component-C1: Global Level Protection Component-C2: Global Level Provision Component-C3: Untied Funds

Box-28.6 Criteria for Determination of Financial Share of each ULB

Sl. No.


1 Population 40 2 Geographical Area 20


20

4 Illiterates 20

C H A P T E R - 2 8


Net Own Revenue Receipts of the State

Component-A Component-B Component-C

Share of PRIs (23%) Share of ULBs (10%)

Category I (Popln. Below 4000) = Rs. 9 lakh

Category II (Popln. 4001 to 8000) = Rs.12 lakh Component-B1

Statutory Development Grants for GPs

Category III (Popln. Above 8000) = Rs.15 lakh

Component-C1 Global Level Protection

Salaries & Pensions, Power sector dues, Repayment of Water Board Loans, Repayment of KREDL(Securitisation on payment of Electricity Dues), Establishment Charges (DUDC)

GPs in Backward Taluks = Rs. 1 lakh

GPs in More Backward Taluks = Rs. 2 lakh Component-B2

Additional Statutory Development Grants for GPs

GPs in Most Backward Taluks = Rs. 3 lakh

Component-C2 Global Level Provision

ULB Share / SFC Project share for Water Supply & Severage, Water Scarcity Fund, Common Purpose Fund, Fund for Special Circumstances, Incentivisation Fund, Rain Water Harvesting

Component-B3 Incentive Grants for GPs

Performance in Fiscal responsibility and other functions

Based on following Indicators and Weightages:-

Based on following Indicators and Weightages:-

Population = 40%

Rural Population = 40% Geographical Area = 20% Geographical Area = 40% SCs & STs Population = 20% SCs & STs Population = 10% Illiterates = 20%

Salary & Allowances of PRI Officials

Component-B4 Programme/Scheme Obligated Funds to ZPs, TPs, GPs

Illiterates = 10%

Component-C3

Untied Funds (should be released as SFC grants)

Devolution Matrix for Transfer of Funds to the PRIs and ULBs Recommended by Third State Finance Commission

Table – 28.9

C H A P T E R - 2 8

Assignment of Taxes, Duties, Tolls and Fees:

28.45 The second TOR stipulates that the TSFC should determine the

principles which govern “the determination of taxes, duties, tolls and

fees which may be assigned to, or appropriated by Zilla


Corporations, City Municipal Councils, and Town Panchayats”. In

Karnataka, vide section 199 of KPR Act 1993, among three tiers of

panchayat raj system; it is the GPs that are assigned powers to levy taxes,

rates and fees. The other two tiers i.e., ZPs and TPs are not assigned any

taxing powers. Whereas, all the ULBs in the State that are governed by the

Karnataka Municipal Corporations Act 1976 [KMCA] and the

Karnataka Municipalities Act 1964 [KMA] have been assigned powers

to levy taxes, rates and fees. The TSFC has assessed the performance of

these lower level governments in their fiscal responsibility; it was observed

that despite assignment of adequate taxing powers, the collection of own

revenue is not uniform across the State. It was observed that certain

regions are doing reasonably well as compared to other regions.

28.46 Assigning any additional taxes, duties, fees and tolls to any of the

PRIs and ULBs necessitate strengthening as well as creation of the tax

collecting machinery. As a result, there would be an involvement of

additional expenditure on new posts and other required infrastructure.

Furthermore, the TSFC is of the view that any such assignment will

ultimately result in reduction of own revenue receipts of the State and to

that extent the quantum of funds available for distribution out of the

net proceeds of the State gets reduced.

28.47 In view of the above observation, the TSFC recommends

continuance of present system of assignment and appropriation of

taxes, duties, fees and tolls to PRIs and ULBs.


C H A P T E R - 2 8

Grants-in-Aid to the PRIs and ULBs:

28.48 The third TOR specifies that the TSFC should determine the

principles which govern the “grants-in-aid to the Zilla Panchayats,


City Municipal Councils, and Town Panchayats from the

consolidated fund of the State”. It is relevant here to mention the

provisions made in section 208 of KPR Act 1993 wherein it is stated that

“the government may make discretionary grant to the Grama

Panchayats, Taluk Panchayats and Zilla Panchayats, for such

purposes and on such terms and conditions as may be decided by

it”. In the interactive discussions held at the district levels with the elected

representatives of PRIs, there was a general demand that they are bereft of

untied funds for taking up independent development works to

accomplish the aspirations of people who have elected them.

28.49 The analysis of finances of PRIs and ULBs and also the pattern of

funding recommended by the TSFC place the GPs and ULBs in a better

financial sway than the ZPs and TPs. Thus, the TSFC is of the view that

the ZPs and the TPs should be given support through this TOR. Therefore,

the TSFC has made the following categorization of ZPs based on population

and TPs based on categories as identified by Dr.D.M.Nanjundappa

Committee on Redressal of Regional Imbalances. The TSFC

recommends “Block Untied Grants” to the ZPs and TPs from the

State Consolidated Fund. The quantum of grants per annum to ZPs and

TPs and the financial implications are given in the Tables – 28.10 and

28.11 below;


C H A P T E R - 2 8

Table – 28.10

Block Untied Grants to Zilla Panchayats from the State Consolidated Fund

Category Rural Population No. of

ZPs Block

Untied Grants

(Rs.Crores)

Total Financial

Implications (Rs.Crores)

I < 10 lakhs 13 5.00 65.00 II >10 and <20 lakhs 13 7.50 97.50 III >20 lakhs 3 10.00 30.00

Total 29 192.50

Table – 28.11

Block Untied Grants to Taluk Panchayats from the State Consolidated Fund

Category No. of

TPs Block Untied

Grants (Rs.Crores)

Total Financial Implications (Rs.Crores)

Most Backward 39 4.00 156.00 More Backward 40 3.00 120.00

Backward 35 2.00 70.00 Other 62 1.00 62.00 Total 176 408.00

28.50 The principles and procedures for distribution of finances to PRIs

and ULBs in Karnataka recommended by the TSFC in this chapter is

illustrated graphically as shown in Diagram-28.4.


C H A P T E R - 2 8

Diagram - 28.4 TSFC Schematic Model of Devolution of Funds to Local

Governments in Karnataka

Consolidated Fund of State

Net Own Revenue Receipts of State

Component ‘A’ Employees

Salary of PRIs

Component ‘B’ Share of PRIs

(23%)

Component ‘C’ Share of ULBs

(10%)

ZP TP GP C1 C2 C3

B4

G-I-A

B4

G-I-A

B1

B2

B3

B4

G-I-A to PRIs

G-I-A: Grants in Aid B1: Statutory Development Grants for GPs B2: Additional Statutory Development Grants for GPs B3: Incentive Grants for GPs B4: Programme/Scheme Obligated Funds to ZPs, TPs, GPs C1: Global Level Protection C2: Global Level Provision C3: Untied Funds (should be released as SFC grants)


Appendix-28.1

I. State's Own Tax Revenue (1+2)1. Commercial Taxes: (Rs. Crores)

Year Agricultural Income Tax

Professional Tax

Sales Tax Entry Tax Entertainment Tax

Betting Tax Luxury Tax Total Commercial

Tax1998-99 48.50 114.27 4265.17 273.13 56.27 11.78 42.16 4811.281999-00 34.80 132.78 4683.23 337.60 60.11 11.89 45.06 5305.472000-01 23.48 151.56 5386.33 473.02 50.73 14.29 66.60 6166.012001-02 2.63 167.23 5269.43 498.11 48.93 13.71 79.27 6079.312002-03 1.32 180.20 5473.54 516.53 45.82 13.43 82.39 6313.232003-04 1.29 245.29 6648.96 673.46 61.63 13.70 88.89 7733.222004-05 2.18 277.94 8700.07 791.72 247.53 2.29 35.47 10057.202005-06 1.62 330.25 9869.54 1041.45 88.06 19.38 133.68 11483.982006-07 RE 1.53 381.25 12380.31 1095.64 44.84 96.55 120.01 14120.132007-08 BE 1.61 395.89 14868.52 1269.60 57.90 118.28 261.99 16973.79

2. Non-Commercial Taxes:Year State Excise Motor Vehicle

TaxStamps &

Registration Fees

Land Revenue

Electricity Duty& Tax

Other Taxes& Duties*

Total Non-Commercial

Tax

State's Own Tax Revenue

(1+2)

1998-99 1005.19 386.79 548.11 38.00 140.25 13.42 2131.76 6943.041999-00 1215.20 448.82 565.79 38.73 155.58 14.77 2438.89 7744.362000-01 1523.13 501.82 638.12 43.16 162.10 8.34 2876.67 9042.682001-02 1976.94 712.37 855.04 49.54 171.30 8.76 3773.95 9853.262002-03 2094.18 675.70 1115.35 59.61 172.14 9.50 4126.48 10439.712003-04 2333.96 800.06 1355.69 67.84 272.92 6.43 4836.90 12570.122004-05 2805.53 982.99 1759.84 117.76 339.02 9.99 6015.13 16072.332005-06 3396.79 1105.45 2212.20 116.50 277.09 39.54 7147.57 18631.552006-07 RE 4519.95 1479.66 3331.14 107.61 300.00 29.44 9767.80 23887.932007-08 BE 3300.00 1560.00 4400.00 86.22 340.20 30.96 9717.38 26691.17* consisting of Forest Development Tax, Health Cess and Education Cess

259

II. State's Own Non-Tax Revenue

Year Interest Receipts

Dividends & Profits

General Services

Social Services

Economic Services

State's OwnNon-Tax Revenue

State's Own Revenue

(I+II)

1998-99 669.74 6.27 127.11 109.44 557.35 1469.91 8412.951999-00 801.67 6.24 151.82 106.97 544.58 1611.28 9355.642000-01 721.18 2.75 189.80 122.13 624.11 1659.97 10702.652001-02 141.92 5.14 166.65 143.67 636.05 1093.43 10946.692002-03 34.36 14.93 349.26 186.14 692.98 1277.67 11717.382003-04 111.34 16.90 1783.81 123.26 923.06 2958.37 15528.492004-05 144.79 16.66 2098.12 147.13 2065.64 4472.34 20544.672005-06 283.00 16.88 2030.21 129.13 1415.49 3874.71 22506.262006-07 RE 178.61 17.60 2931.99 132.60 1035.96 4296.76 28184.692007-08 BE 187.54 2.73 154.23 139.24 1373.35 1857.09 28548.26

260

261

Appendix-28.2 Percentage Share of ZPs for Distribution of Funds

Rural Population Area SC&ST Population Illiterates No. Propor

tion Weight

assigned -

Sq. Kms.

Propor tion

Weight assigned

-

No. Propor tion

Weight ssigned

-

No. Propor tion

Weight assigned

-

Sl. No.

District

40 40 10 10

Total Weightage

1 Bagalkot 1173372 3.36 1.35 6575 3.43 1.37 263944 2.82 0.28 472110 3.89 0.39 3.39 2 Bangalore Rural 658634 1.89 0.76 2285 1.19 0.48 202272 2.16 0.22 188761 1.56 0.16 1.60 3 Bangalore Urban 777137 2.23 0.89 2190 1.14 0.46 211663 2.26 0.23 199152 1.64 0.16 1.74 4 Belgaum 3201814 9.18 3.67 13415 6.99 2.80 580959 6.21 0.62 1113563 9.17 0.92 8.01 5 Bellary 1320290 3.78 1.51 8450 4.41 1.76 551970 5.90 0.59 544882 4.49 0.45 4.32 6 Bidar 1157498 3.32 1.33 5448 2.84 1.14 428040 4.58 0.46 412040 3.39 0.34 3.26 7 Bijapur 1410829 4.04 1.62 10494 5.47 2.19 306145 3.27 0.33 569245 4.69 0.47 4.60 8 Chamarajanagar 817372 2.34 0.94 5101 2.66 1.06 292535 3.13 0.31 379670 3.13 0.31 2.63 9 ChikBallapur 927985 2.66 1.06 4210 2.20 0.88 373217 3.99 0.40 355649 2.93 0.29 2.63

10 Chikmagalur 918181 2.63 1.05 7201 3.75 1.50 240243 2.57 0.26 242594 2.00 0.20 3.01 11 Chitradurga 1243658 3.56 1.43 8440 4.40 1.76 530446 5.67 0.57 419491 3.46 0.35 4.10 12 Dakshina Kannada 1168428 3.35 1.34 4560 2.38 0.95 153475 1.64 0.16 206817 1.70 0.17 2.63 13 Davanagere 1247954 3.58 1.43 5924 3.09 1.24 451308 4.83 0.48 400464 3.30 0.33 3.48 14 Dharwad 722336 2.07 0.83 4260 2.22 0.89 98882 1.06 0.11 242334 2.00 0.20 2.02 15 Gadag 629652 1.80 0.72 4656 2.43 0.97 147294 1.58 0.16 207377 1.71 0.17 2.02 16 Gulbarga 2278301 6.53 2.61 16224 8.46 3.38 703875 7.53 0.75 1082110 8.92 0.89 7.64 17 Hassan 1416996 4.06 1.62 6814 3.55 1.42 299628 3.20 0.32 436257 3.59 0.36 3.73 18 Haveri 1140096 3.27 1.31 4823 2.51 1.01 268175 2.87 0.29 333083 2.74 0.27 2.87 19 Kodagu 473179 1.36 0.54 4102 2.14 0.86 104184 1.11 0.11 97716 0.81 0.08 1.59 20 Kolar 982561 2.82 1.13 4013 2.09 0.84 352820 3.77 0.38 343760 2.83 0.28 2.62 21 Koppal 997797 2.86 1.14 7189 3.75 1.50 287640 3.08 0.31 396262 3.26 0.33 3.28 22 Mandya 1480990 4.24 1.70 4961 2.59 1.03 221115 2.36 0.24 555704 4.58 0.46 3.43 23 Mysore 1658899 4.75 1.90 6854 3.57 1.43 573034 6.13 0.61 690247 5.69 0.57 4.51 24 Raichur 1248925 3.58 1.43 6827 3.56 1.42 526279 5.63 0.56 580168 4.78 0.48 3.90 25 Ramnagaram 815484 2.34 0.93 3530 1.84 0.74 175697 1.88 0.19 308452 2.54 0.25 2.11 26 Shimoga 1071535 3.07 1.23 8477 4.42 1.77 243263 2.60 0.26 280146 2.31 0.23 3.49 27 Tumkur 2077509 5.95 2.38 10597 5.53 2.21 581677 6.22 0.62 668547 5.51 0.55 5.76 28 Udupi 905890 2.60 1.04 3880 2.02 0.81 92272 0.99 0.10 180933 1.49 0.15 2.10 29 Uttara Kannada 965731 2.77 1.11 10291 5.37 2.15 89721 0.96 0.10 229573 1.89 0.19 3.54

KARNATAKA 34889033 100 40 191791 100 40 9351773 100 10 12137107 100 10 100

Sl. No. District Taluk

No. Proportion Weight assigned




40 40 10 101 Belgaum Chikodi 456495 1.31 0.52 1271.70 0.66 0.27 75001 0.80 0.08 131962 1.09 0.11 0.982 Belgaum Athni 420912 1.21 0.48 1994.96 1.04 0.42 71892 0.77 0.08 143646 1.18 0.12 1.093 Belgaum Raybag 311828 0.89 0.36 957.95 0.50 0.20 61674 0.66 0.07 119887 0.99 0.10 0.724 Belgaum Gokak 401006 1.15 0.46 1543.27 0.80 0.32 78128 0.84 0.08 164436 1.35 0.14 1.005 Belgaum Hukeri 304765 0.87 0.35 991.49 0.52 0.21 78990 0.84 0.08 105151 0.87 0.09 0.736 Belgaum Belgaum 309101 0.89 0.35 1036.86 0.54 0.22 53121 0.57 0.06 94636 0.78 0.08 0.717 Belgaum Khanapur 220345 0.63 0.25 1732.17 0.90 0.36 24622 0.26 0.03 67862 0.56 0.06 0.708 Belgaum Sampgaon(Bilahongal) 313061 0.90 0.36 1122.44 0.59 0.23 48250 0.52 0.05 103426 0.85 0.09 0.739 Belgaum Parasgad(Saundatti) 273538 0.78 0.31 1558.13 0.81 0.32 55086 0.59 0.06 104791 0.86 0.09 0.78

10 Belgaum Ramdurg 190763 0.55 0.22 1206.03 0.63 0.25 34195 0.37 0.04 77766 0.64 0.06 0.5711 Bagalkot Jamkhandi 256694 0.74 0.29 1168.08 0.61 0.24 45337 0.48 0.05 107082 0.88 0.09 0.6712 Bagalkot Bilgi 126542 0.36 0.15 776.38 0.40 0.16 36273 0.39 0.04 53277 0.44 0.04 0.3913 Bagalkot Mudhol 201855 0.58 0.23 975.72 0.51 0.20 45666 0.49 0.05 83378 0.69 0.07 0.5514 Bagalkot Badami 214869 0.62 0.25 1374.71 0.72 0.29 51185 0.55 0.05 88389 0.73 0.07 0.6615 Bagalkot Bagalkot 156283 0.45 0.18 937.91 0.49 0.20 41674 0.45 0.04 59991 0.49 0.05 0.4716 Bagalkot Hungund 217129 0.62 0.25 1342.20 0.70 0.28 43809 0.47 0.05 79993 0.66 0.07 0.6417 Bijapur Bijapur 315457 0.90 0.36 2634.32 1.37 0.55 77622 0.83 0.08 129218 1.06 0.11 1.1018 Bijapur Indi 322505 0.92 0.37 2221.40 1.16 0.46 66312 0.71 0.07 132430 1.09 0.11 1.0119 Bijapur Sindgi 298923 0.86 0.34 2176.72 1.13 0.45 59258 0.63 0.06 122561 1.01 0.10 0.9620 Bijapur Basavana Bagevadi 274730 0.79 0.31 1944.61 1.01 0.41 57277 0.61 0.06 107387 0.88 0.09 0.8721 Bijapur Muddebihal 199214 0.57 0.23 1516.95 0.79 0.32 45676 0.49 0.05 77649 0.64 0.06 0.6622 Gulbarga Aland 261891 0.75 0.30 1734.07 0.90 0.36 69717 0.75 0.07 103801 0.86 0.09 0.8223 Gulbarga Afzalpur 160736 0.46 0.18 1304.74 0.68 0.27 32274 0.35 0.03 67315 0.55 0.06 0.5524 Gulbarga Gulbarga 245414 0.70 0.28 1734.53 0.90 0.36 79004 0.84 0.08 103505 0.85 0.09 0.8125 Gulbarga Chincholi 206502 0.59 0.24 1552.20 0.81 0.32 74940 0.80 0.08 89494 0.74 0.07 0.7126 Gulbarga Sedam 156026 0.45 0.18 1036.17 0.54 0.22 46377 0.50 0.05 78514 0.65 0.06 0.5127 Gulbarga Chitapur 238532 0.68 0.27 1767.55 0.92 0.37 71405 0.76 0.08 115495 0.95 0.10 0.8128 Gulbarga Jevargi 216075 0.62 0.25 1825.71 0.95 0.38 53694 0.57 0.06 102227 0.84 0.08 0.7729 Gulbarga Shorapur 293133 0.84 0.34 1838.18 0.96 0.38 110666 1.18 0.12 143641 1.18 0.12 0.9630 Gulbarga Shahpur 249819 0.72 0.29 1687.07 0.88 0.35 84093 0.90 0.09 132310 1.09 0.11 0.8431 Gulbarga Yadgir 250173 0.72 0.29 1743.78 0.91 0.36 81705 0.87 0.09 145808 1.20 0.12 0.86

Appendix-28.3Percentage Share of Taluks for Distribution of Funds

Rural Population Area SC&ST Population Illiterates Total Weightage

262






40 40 10 10



32 Bidar Basavakalyan 241125 0.69 0.28 1202.97 0.63 0.25 99749 1.07 0.11 84951 0.70 0.07 0.7033 Bidar Bhalki 221949 0.64 0.25 1117.20 0.58 0.23 69350 0.74 0.07 73708 0.61 0.06 0.6234 Bidar Aurad 229490 0.66 0.26 1227.20 0.64 0.26 82311 0.88 0.09 76896 0.63 0.06 0.6735 Bidar Bidar 231283 0.66 0.27 925.19 0.48 0.19 80959 0.87 0.09 89593 0.74 0.07 0.6236 Bidar Homnabad 233651 0.67 0.27 975.44 0.51 0.20 95671 1.02 0.10 86892 0.72 0.07 0.6537 Raichur Lingsugur 247478 0.71 0.28 1617.35 0.84 0.34 102063 1.09 0.11 109280 0.90 0.09 0.8238 Raichur Devadurga 200463 0.57 0.23 1177.25 0.61 0.25 109820 1.17 0.12 93189 0.77 0.08 0.6739 Raichur Raichur 208976 0.60 0.24 1203.99 0.63 0.25 84789 0.91 0.09 107389 0.88 0.09 0.6740 Raichur Manvi 293106 0.84 0.34 1462.21 0.76 0.30 130964 1.40 0.14 144082 1.19 0.12 0.9041 Raichur Sindhnur 298902 0.86 0.34 1366.20 0.71 0.28 98643 1.05 0.11 126228 1.04 0.10 0.8442 Koppal Yelbarga 224931 0.64 0.26 1903.04 0.99 0.40 57909 0.62 0.06 84396 0.70 0.07 0.7943 Koppal Kushtagi 218148 0.63 0.25 1783.76 0.93 0.37 59025 0.63 0.06 90835 0.75 0.07 0.7644 Koppal Gangawati 304942 0.87 0.35 1724.59 0.90 0.36 102981 1.10 0.11 127419 1.05 0.10 0.9245 Koppal Koppal 249776 0.72 0.29 1777.61 0.93 0.37 67725 0.72 0.07 93612 0.77 0.08 0.8146 Gadag Nargund 60118 0.17 0.07 435.67 0.23 0.09 8534 0.09 0.01 18881 0.16 0.02 0.1847 Gadag Ron 181091 0.52 0.21 1295.09 0.68 0.27 36010 0.39 0.04 59454 0.49 0.05 0.5748 Gadag Gadag 158931 0.46 0.18 1097.53 0.57 0.23 35440 0.38 0.04 50139 0.41 0.04 0.4949 Gadag Shirhatti 133566 0.38 0.15 949.34 0.49 0.20 39589 0.42 0.04 45933 0.38 0.04 0.4350 Gadag Mundargi 95946 0.28 0.11 878.37 0.46 0.18 27721 0.30 0.03 32970 0.27 0.03 0.3551 Dharwad Dharwad 202671 0.58 0.23 999.00 0.52 0.21 25791 0.28 0.03 73160 0.60 0.06 0.5352 Dharwad Navalgund 128736 0.37 0.15 1080.78 0.56 0.23 16744 0.18 0.02 40753 0.34 0.03 0.4253 Dharwad Hubli 128380 0.37 0.15 620.74 0.32 0.13 15281 0.16 0.02 40099 0.33 0.03 0.3354 Dharwad Kalghatgi 122336 0.35 0.14 682.44 0.36 0.14 19011 0.20 0.02 45290 0.37 0.04 0.3455 Dharwad Kundgol 140213 0.40 0.16 877.04 0.46 0.18 22055 0.24 0.02 43032 0.35 0.04 0.4056 Uttara Kannada Karwar 72852 0.21 0.08 724.12 0.38 0.15 5790 0.06 0.01 13330 0.11 0.01 0.2557 Uttara Kannada Supa 48914 0.14 0.06 1910.44 1.00 0.40 3940 0.04 0.00 14497 0.12 0.01 0.4758 Uttara Kannada Haliyal 80350 0.23 0.09 839.10 0.44 0.18 6311 0.07 0.01 27452 0.23 0.02 0.3059 Uttara Kannada Yellapur 55574 0.16 0.06 1298.75 0.68 0.27 3052 0.03 0.00 14119 0.12 0.01 0.3560 Uttara Kannada Mundgod 74565 0.21 0.09 667.44 0.35 0.14 13981 0.15 0.01 19926 0.16 0.02 0.2661 Uttara Kannada Sirsi 110215 0.32 0.13 1322.32 0.69 0.28 11440 0.12 0.01 21259 0.18 0.02 0.4362 Uttara Kannada Ankola 75411 0.22 0.09 904.79 0.47 0.19 4698 0.05 0.01 17788 0.15 0.01 0.29

263






40 40 10 10



63 Uttara Kannada Kumta 111327 0.32 0.13 590.45 0.31 0.12 6786 0.07 0.01 21955 0.18 0.02 0.2864 Uttara Kannada Siddapur 86820 0.25 0.10 847.27 0.44 0.18 6364 0.07 0.01 17270 0.14 0.01 0.3065 Uttara Kannada Honavar 142507 0.41 0.16 756.15 0.39 0.16 6971 0.07 0.01 32033 0.26 0.03 0.3566 Uttara Kannada Bhatkal 107196 0.31 0.12 430.17 0.22 0.09 20388 0.22 0.02 29944 0.25 0.02 0.2667 Haveri Shiggaon 122091 0.35 0.14 589.23 0.31 0.12 24200 0.26 0.03 37137 0.31 0.03 0.3268 Haveri Savanur 108322 0.31 0.12 538.99 0.28 0.11 28113 0.30 0.03 36687 0.30 0.03 0.3069 Haveri Hangal 205741 0.59 0.24 767.78 0.40 0.16 47373 0.51 0.05 57853 0.48 0.05 0.4970 Haveri Haveri 196434 0.56 0.23 798.54 0.42 0.17 43213 0.46 0.05 65834 0.54 0.05 0.4971 Haveri Byadgi 102281 0.29 0.12 436.57 0.23 0.09 26125 0.28 0.03 26800 0.22 0.02 0.2672 Haveri Hirekerur 196586 0.56 0.23 806.92 0.42 0.17 46579 0.50 0.05 45469 0.37 0.04 0.4873 Haveri Ranibennur 208641 0.60 0.24 884.97 0.46 0.18 52572 0.56 0.06 63303 0.52 0.05 0.5374 Bellary Hadagalli 144704 0.41 0.17 947.82 0.49 0.20 46719 0.50 0.05 50853 0.42 0.04 0.4675 Bellary Hagaribommanahalli 159886 0.46 0.18 973.95 0.51 0.20 51657 0.55 0.06 55794 0.46 0.05 0.4976 Bellary Hospet 153499 0.44 0.18 904.17 0.47 0.19 70602 0.75 0.08 68091 0.56 0.06 0.5077 Bellary Siruguppa 168842 0.48 0.19 1036.17 0.54 0.22 66405 0.71 0.07 82873 0.68 0.07 0.5578 Bellary Bellary 308728 0.88 0.35 1688.59 0.88 0.35 131091 1.40 0.14 141069 1.16 0.12 0.9679 Bellary Sandur 156998 0.45 0.18 1152.42 0.60 0.24 74309 0.79 0.08 66407 0.55 0.05 0.5580 Bellary Kudligi 227633 0.65 0.26 1746.88 0.91 0.36 111187 1.19 0.12 79795 0.66 0.07 0.8181 Chitradurga Molakalmuru 112609 0.32 0.13 738.45 0.39 0.15 66087 0.71 0.07 46940 0.39 0.04 0.3982 Chitradurga Challakere 283651 0.81 0.33 2016.89 1.05 0.42 147654 1.58 0.16 105186 0.87 0.09 0.9983 Chitradurga Chitradurga 251336 0.72 0.29 1359.87 0.71 0.28 117024 1.25 0.13 74710 0.62 0.06 0.7684 Chitradurga Holalkere 183192 0.53 0.21 1088.48 0.57 0.23 68494 0.73 0.07 53205 0.44 0.04 0.5585 Chitradurga Hosadurga 196957 0.56 0.23 1324.13 0.69 0.28 54920 0.59 0.06 64230 0.53 0.05 0.6186 Chitradurga Hiriyur 215913 0.62 0.25 1912.18 1.00 0.40 76267 0.82 0.08 75220 0.62 0.06 0.7987 Davanagere Harihar 157910 0.45 0.18 484.62 0.25 0.10 38793 0.41 0.04 51130 0.42 0.04 0.3788 Davanagere Harapanahalli 226886 0.65 0.26 1436.72 0.75 0.30 91065 0.97 0.10 87979 0.72 0.07 0.7389 Davanagere Jagalur 144139 0.41 0.17 963.35 0.50 0.20 71147 0.76 0.08 47841 0.39 0.04 0.4890 Davanagere Davanagere 238000 0.68 0.27 956.58 0.50 0.20 89755 0.96 0.10 69163 0.57 0.06 0.6391 Davanagere Honnali 207024 0.59 0.24 884.74 0.46 0.18 58153 0.62 0.06 61274 0.50 0.05 0.5392 Davanagere Channagiri 273995 0.79 0.31 1197.99 0.62 0.25 102395 1.09 0.11 83077 0.68 0.07 0.7493 Shimoga Sagar 138294 0.40 0.16 1926.76 1.00 0.40 17022 0.18 0.02 32046 0.26 0.03 0.61

264






40 40 10 10



94 Shimoga Sorab 178145 0.51 0.20 1146.67 0.60 0.24 40921 0.44 0.04 45886 0.38 0.04 0.5295 Shimoga Shikarpur 167573 0.48 0.19 908.11 0.47 0.19 54101 0.58 0.06 48660 0.40 0.04 0.4896 Shimoga Hosanagara 109957 0.32 0.13 1417.91 0.74 0.30 11666 0.12 0.01 26468 0.22 0.02 0.4697 Shimoga Tirthahalli 128399 0.37 0.15 1188.95 0.62 0.25 14507 0.16 0.02 26219 0.22 0.02 0.4398 Shimoga Shimoga 170840 0.49 0.20 1141.70 0.60 0.24 54346 0.58 0.06 48718 0.40 0.04 0.5399 Shimoga Bhadravati 178327 0.51 0.20 746.90 0.39 0.16 50700 0.54 0.05 52149 0.43 0.04 0.46

100 Udupi Kundapura 348829 1.00 0.40 1559.72 0.81 0.33 30157 0.32 0.03 78318 0.65 0.06 0.82101 Udupi Udupi 376579 1.08 0.43 929.24 0.48 0.19 36707 0.39 0.04 71183 0.59 0.06 0.72102 Udupi Karkal 180482 0.52 0.21 1391.04 0.73 0.29 25408 0.27 0.03 31432 0.26 0.03 0.55103 Chikmagalur Sringeri 32681 0.09 0.04 442.83 0.23 0.09 6516 0.07 0.01 5956 0.05 0.00 0.14104 Chikmagalur Koppa 82667 0.24 0.09 572.21 0.30 0.12 19906 0.21 0.02 15803 0.13 0.01 0.25105 Chikmagalur Narasimharajapura 58175 0.17 0.07 744.14 0.39 0.16 10760 0.12 0.01 12121 0.10 0.01 0.24106 Chikmagalur Tarikere 190104 0.54 0.22 1216.18 0.63 0.25 51541 0.55 0.06 51316 0.42 0.04 0.57107 Chikmagalur Kadur 235890 0.68 0.27 1414.27 0.74 0.29 50779 0.54 0.05 70860 0.58 0.06 0.68108 Chikmagalur Chikmagalur 194314 0.56 0.22 1613.29 0.84 0.34 56079 0.60 0.06 49251 0.41 0.04 0.66109 Chikmagalur Mudigere 124350 0.36 0.14 1198.08 0.62 0.25 44662 0.48 0.05 37287 0.31 0.03 0.47110 Tumkur Chiknayakanhalli 187233 0.54 0.21 1115.23 0.58 0.23 49340 0.53 0.05 50979 0.42 0.04 0.54111 Tumkur Sira 251385 0.72 0.29 1558.93 0.81 0.33 82782 0.89 0.09 88987 0.73 0.07 0.78112 Tumkur Pavagada 218187 0.63 0.25 1357.91 0.71 0.28 98656 1.05 0.11 86614 0.71 0.07 0.71113 Tumkur Madhugiri 239580 0.69 0.27 1128.70 0.59 0.24 85551 0.91 0.09 85242 0.70 0.07 0.67114 Tumkur Koratagere 147297 0.42 0.17 643.35 0.34 0.13 47680 0.51 0.05 49799 0.41 0.04 0.40115 Tumkur Tumkur 267732 0.77 0.31 1013.64 0.53 0.21 75055 0.80 0.08 77868 0.64 0.06 0.66116 Tumkur Gubbi 239608 0.69 0.27 1220.99 0.64 0.25 56142 0.60 0.06 70949 0.58 0.06 0.65117 Tumkur Tiptur 164020 0.47 0.19 804.49 0.42 0.17 31869 0.34 0.03 40198 0.33 0.03 0.42118 Tumkur Turuvekere 156780 0.45 0.18 767.82 0.40 0.16 24935 0.27 0.03 43266 0.36 0.04 0.40119 Tumkur Kunigal 205687 0.59 0.24 985.94 0.51 0.21 29667 0.32 0.03 74645 0.62 0.06 0.53120 Chik Ballapur Gauribidanur 240582 0.69 0.28 889.51 0.46 0.19 99401 1.06 0.11 90390 0.74 0.07 0.64121 Chik Ballapur Chik Ballapur 136154 0.39 0.16 601.81 0.31 0.13 55238 0.59 0.06 46717 0.38 0.04 0.38122 Chik Ballapur Gudibanda 43021 0.12 0.05 225.43 0.12 0.05 17553 0.19 0.02 17056 0.14 0.01 0.13123 Chik Ballapur Bagepalli 149570 0.43 0.17 927.83 0.48 0.19 66651 0.71 0.07 67845 0.56 0.06 0.49124 Chik Ballapur Sidlaghatta 152867 0.44 0.18 662.90 0.35 0.14 54405 0.58 0.06 54838 0.45 0.05 0.42

265






40 40 10 10



125 Chik Ballapur Chintamani 205791 0.59 0.24 931.56 0.49 0.19 79969 0.86 0.09 78803 0.65 0.06 0.58126 Kolar Srinivaspur 161762 0.46 0.19 865.94 0.45 0.18 66164 0.71 0.07 58346 0.48 0.05 0.48127 Kolar Kolar 228686 0.66 0.26 792.95 0.41 0.17 76538 0.82 0.08 73362 0.60 0.06 0.57128 Kolar Malur 179194 0.51 0.21 644.33 0.34 0.13 65294 0.70 0.07 61028 0.50 0.05 0.46129 Kolar Bangarapet 225650 0.65 0.26 860.50 0.45 0.18 79400 0.85 0.08 81355 0.67 0.07 0.59130 Kolar Mulbagal 187269 0.54 0.21 820.24 0.43 0.17 65424 0.70 0.07 69669 0.57 0.06 0.51131 Bangalore * Bangalore East *132 Bangalore Bangalore North 223031 0.64 0.26 563.48 0.29 0.12 56985 0.61 0.06 54148 0.45 0.04 0.48133 Bangalore Bangalore South 312946 0.90 0.36 796.22 0.42 0.17 76291 0.82 0.08 77993 0.64 0.06 0.67134 Bangalore Anekal 241160 0.69 0.28 830.30 0.43 0.17 78387 0.84 0.08 67011 0.55 0.06 0.59135 Bangalore Rural Nelamangala 149593 0.43 0.17 509.93 0.27 0.11 41828 0.45 0.04 39390 0.32 0.03 0.36136 Bangalore Rural Dod Ballapur 190554 0.55 0.22 779.87 0.41 0.16 57834 0.62 0.06 57833 0.48 0.05 0.49137 Bangalore Rural Devanahalli 132380 0.38 0.15 448.12 0.23 0.09 50893 0.54 0.05 38798 0.32 0.03 0.33138 Bangalore Rural Hosakote 186107 0.53 0.21 592.40 0.31 0.12 51717 0.55 0.06 52740 0.43 0.04 0.44139 Ramanagaram Magadi 177386 0.51 0.20 809.03 0.42 0.17 40641 0.43 0.04 60686 0.50 0.05 0.47140 Ramanagaram Ramanagaram 158953 0.46 0.18 632.68 0.33 0.13 35772 0.38 0.04 54538 0.45 0.04 0.40141 Ramanagaram Channapatna 188997 0.54 0.22 542.87 0.28 0.11 35473 0.38 0.04 72585 0.60 0.06 0.43142 Ramanagaram Kanakapura 290148 0.83 0.33 1500.10 0.78 0.31 63811 0.68 0.07 120643 0.99 0.10 0.81143 Mandya Krishnarajpet 225665 0.65 0.26 886.04 0.46 0.18 32135 0.34 0.03 79646 0.66 0.07 0.54144 Mandya Nagamangala 174718 0.50 0.20 1031.14 0.54 0.22 22434 0.24 0.02 62579 0.52 0.05 0.49145 Mandya Pandavapura 156699 0.45 0.18 542.70 0.28 0.11 20091 0.21 0.02 62977 0.52 0.05 0.37146 Mandya Shrirangapattana 139255 0.40 0.16 352.43 0.18 0.07 22957 0.25 0.02 48188 0.40 0.04 0.30147 Mandya Mandya 274433 0.79 0.31 719.10 0.37 0.15 37620 0.40 0.04 101583 0.84 0.08 0.59148 Mandya Maddur 264262 0.76 0.30 617.24 0.32 0.13 34818 0.37 0.04 99331 0.82 0.08 0.55149 Mandya Malavalli 245958 0.70 0.28 812.35 0.42 0.17 51060 0.55 0.05 101400 0.84 0.08 0.59150 Hassan Sakleshpur 111169 0.32 0.13 1028.42 0.54 0.21 35893 0.38 0.04 29672 0.24 0.02 0.40151 Hassan Belur 163527 0.47 0.19 783.13 0.41 0.16 51717 0.55 0.06 50308 0.41 0.04 0.45152 Hassan Arsikere 257878 0.74 0.30 1257.39 0.66 0.26 56576 0.60 0.06 70124 0.58 0.06 0.68153 Hassan Hassan 227885 0.65 0.26 940.81 0.49 0.20 37559 0.40 0.04 63437 0.52 0.05 0.55154 Hassan Alur 79938 0.23 0.09 434.35 0.23 0.09 21862 0.23 0.02 24683 0.20 0.02 0.23155 Hassan Arkalgud 184789 0.53 0.21 674.74 0.35 0.14 39966 0.43 0.04 65945 0.54 0.05 0.45

266






40 40 10 10



156 Hassan Hole Narsipur 148220 0.42 0.17 602.31 0.31 0.13 29431 0.31 0.03 57190 0.47 0.05 0.37157 Hassan Channarayapatna 243590 0.70 0.28 1092.85 0.57 0.23 26624 0.28 0.03 74898 0.62 0.06 0.60158 Dakshina Kannada Mangalore 281777 0.81 0.32 842.72 0.44 0.18 23629 0.25 0.03 44574 0.37 0.04 0.56159 Dakshina Kannada Bantval 306734 0.88 0.35 735.60 0.38 0.15 30082 0.32 0.03 53343 0.44 0.04 0.58160 Dakshina Kannada Beltangadi 239189 0.69 0.27 1375.52 0.72 0.29 33864 0.36 0.04 46710 0.38 0.04 0.64161 Dakshina Kannada Puttur 218002 0.62 0.25 995.19 0.52 0.21 38409 0.41 0.04 41055 0.34 0.03 0.53162 Dakshina Kannada Sulya 122726 0.35 0.14 610.97 0.32 0.13 27491 0.29 0.03 21135 0.17 0.02 0.31163 Kodagu Madikeri 109516 0.31 0.13 1492.32 0.78 0.31 17766 0.19 0.02 17645 0.15 0.01 0.47164 Kodagu Somvarpet 185515 0.53 0.21 989.67 0.52 0.21 38045 0.41 0.04 37710 0.31 0.03 0.49165 Kodagu Virajpet 178148 0.51 0.20 1620.01 0.84 0.34 48373 0.52 0.05 42361 0.35 0.03 0.63166 Mysore Piriyapatna 209330 0.60 0.24 785.50 0.41 0.16 50767 0.54 0.05 75526 0.62 0.06 0.52167 Mysore Hunsur 210026 0.60 0.24 900.08 0.47 0.19 74907 0.80 0.08 86706 0.71 0.07 0.58168 Mysore Krishnarajanagara 208566 0.60 0.24 596.76 0.31 0.12 44429 0.48 0.05 79858 0.66 0.07 0.48169 Mysore Mysore 239262 0.69 0.27 828.31 0.43 0.17 74971 0.80 0.08 102717 0.85 0.08 0.61170 Mysore Heggadadevankote 233885 0.67 0.27 1622.40 0.85 0.34 112986 1.21 0.12 94003 0.77 0.08 0.80171 Mysore Nanjangud 311991 0.89 0.36 991.08 0.52 0.21 116847 1.25 0.12 147984 1.22 0.12 0.81172 Mysore Tirumakudal Narsipur 245839 0.70 0.28 1129.87 0.59 0.24 98127 1.05 0.10 103453 0.85 0.09 0.71173 Chamarajanagar Gundlupet 186742 0.54 0.21 1392.88 0.73 0.29 55792 0.60 0.06 88942 0.73 0.07 0.64174 Chamarajanagar Chamarajanagar 277013 0.79 0.32 1226.67 0.64 0.26 94884 1.01 0.10 134100 1.10 0.11 0.79175 Chamarajanagar Yelandur 69386 0.20 0.08 266.34 0.14 0.06 35211 0.38 0.04 31918 0.26 0.03 0.20176 Chamarajanagar Kollegal 284231 0.81 0.33 2215.11 1.15 0.46 106648 1.14 0.11 124710 1.03 0.10 1.00

34889033 100.00 40.00 191791.00 100.00 40.00 9351773 100.00 10.00 12137107 100.00 10.00 100.00

* This Taluk has been carved out of the erstwile Bangalore South & Bangalore North Taluk during the year 2003. Since this new taluk came into existence after 2001 census, the data sets pertaining to Population, area, SC&ST population and No. of Illiterates are not forthcoming. As such, the TSFC has decided to distribute the allocation of the erstwile Bangalore NOrth & Bangalore South taluks equally among the 3 taluks namely Bangalore South, North & East Taluks. The error factor is negligible & does not alter the allocations significantly.

267

Sl.No. Civic Status

Name of the ULB Total Weightage

No. Proportion Weight assigned - Sq.Kms. Proportion

Weight assigned -

No. Proportion

Weight assigned -

No. Proportion

Weight assigned -

40 20 20 201 CC Bangalore 5726830 31.88 12.75 549.84 10.86 2.17 721891 27.0 5.4 773974 25.4 5.1 25.402 CC Belgaum 506480 2.82 1.13 166.03 3.28 0.66 48919 1.8 0.4 61358 2.0 0.4 2.553 CC Bellary 316766 1.76 0.71 79.45 1.57 0.31 71921 2.7 0.5 72644 2.4 0.5 2.034 CC Davanagere 364523 2.03 0.81 77.12 1.52 0.30 60736 2.3 0.5 67560 2.2 0.4 2.015 CC Gulbarga 430265 2.40 0.96 64.48 1.27 0.25 69029 2.6 0.5 87859 2.9 0.6 2.316 CC Hubli-Dharwad 786195 4.38 1.75 213.42 4.22 0.84 91188 3.4 0.7 127044 4.2 0.8 4.117 CC Mangalore 509082 2.83 1.13 159.98 3.16 0.63 24069 0.9 0.2 41877 1.4 0.3 2.228 CC Mysore 799228 4.45 1.78 131.90 2.61 0.52 120398 4.5 0.9 110987 3.6 0.7 3.939 CMC Bagalkot 90988 0.51 0.20 49.06 0.97 0.19 10296 0.4 0.1 15957 0.5 0.1 0.5810 CMC Bhadravati 160662 0.89 0.36 66.82 1.32 0.26 28882 1.1 0.2 26206 0.9 0.2 1.0111 CMC Bidar 174257 0.97 0.39 59.87 1.18 0.24 22533 0.8 0.2 29656 1.0 0.2 0.9912 CMC Bijapur 253891 1.41 0.57 102.59 2.03 0.41 33870 1.3 0.3 49178 1.6 0.3 1.5513 CMC Chamarajanagar 60558 0.34 0.13 18.76 0.37 0.07 16839 0.6 0.1 17658 0.6 0.1 0.4514 CMC Channapatna 63577 0.35 0.14 8.42 0.17 0.03 9728 0.4 0.1 12670 0.4 0.1 0.3315 CMC ChikBallapur 54968 0.31 0.12 9.20 0.18 0.04 9824 0.4 0.1 9662 0.3 0.1 0.3016 CMC Chikmagalur 101251 0.56 0.23 32.74 0.65 0.13 13894 0.5 0.1 12723 0.4 0.1 0.5417 CMC Chintamani 65493 0.36 0.15 14.57 0.29 0.06 11602 0.4 0.1 13837 0.5 0.1 0.3818 CMC Chitradurga 125170 0.70 0.28 25.98 0.51 0.10 29380 1.1 0.2 17171 0.6 0.1 0.7119 CMC Dandeli 53290 0.30 0.12 8.52 0.17 0.03 5958 0.2 0.0 7988 0.3 0.1 0.2520 CMC DodBallapur 77778 0.43 0.17 13.48 0.27 0.05 8503 0.3 0.1 15508 0.5 0.1 0.3921 CMC Gadag-Betigeri 154982 0.86 0.35 54.57 1.08 0.22 17250 0.6 0.1 25970 0.9 0.2 0.8622 CMC Gangawati 101392 0.56 0.23 15.78 0.31 0.06 19726 0.7 0.1 29385 1.0 0.2 0.6323 CMC Gokak 77213 0.43 0.17 22.72 0.45 0.09 11768 0.4 0.1 14927 0.5 0.1 0.4524 CMC Harihar 87744 0.49 0.20 22.86 0.45 0.09 13302 0.5 0.1 14779 0.5 0.1 0.4825 CMC Hassan 133262 0.74 0.30 29.57 0.58 0.12 9592 0.4 0.1 14882 0.5 0.1 0.5826 CMC Hospet 164240 0.91 0.37 49.70 0.98 0.20 45977 1.7 0.3 38045 1.2 0.2 1.1627 CMC Karwar 75038 0.42 0.17 36.95 0.73 0.15 3935 0.1 0.0 7808 0.3 0.1 0.3928 CMC Kolar 113907 0.63 0.25 18.30 0.36 0.07 14867 0.6 0.1 18080 0.6 0.1 0.5629 CMC Mandya 131179 0.73 0.29 16.89 0.33 0.07 18591 0.7 0.1 22269 0.7 0.1 0.6430 CMC Nipani 58081 0.32 0.13 20.21 0.40 0.08 9013 0.3 0.1 9774 0.3 0.1 0.3431 CMC Rabkavi-Banhatti 70248 0.39 0.16 13.14 0.26 0.05 7970 0.3 0.1 20058 0.7 0.1 0.40

Appendix-28.4Percentage Shares of Urban Local Bodies for distribution of Funds

ULB Population Area SC&ST Population Illiterates

268

Sl.No. Civic Status



Weight assigned -

No. Proportion

Weight assigned -

No. Proportion

Weight assigned -

40 20 20 20



32 CMC Raichur 226404 1.26 0.50 56.58 1.12 0.22 49986 1.9 0.4 57379 1.9 0.4 1.4833 CMC Ramanagaram 79394 0.44 0.18 12.39 0.24 0.05 14145 0.5 0.1 19390 0.6 0.1 0.4634 CMC Ranibennur 96349 0.54 0.21 44.17 0.87 0.17 8971 0.3 0.1 16874 0.6 0.1 0.5735 CMC RobertsonPet 157084 0.87 0.35 59.75 1.18 0.24 75059 2.8 0.6 15925 0.5 0.1 1.2536 CMC Shimoga 274352 1.53 0.61 76.71 1.52 0.30 38004 1.4 0.3 39041 1.3 0.3 1.4537 CMC Sirsi 65335 0.36 0.15 36.74 0.73 0.15 9213 0.3 0.1 6338 0.2 0.0 0.4038 CMC Tumkur 248929 1.39 0.55 64.27 1.27 0.25 38667 1.4 0.3 35710 1.2 0.2 1.3339 CMC Udupi 137684 0.77 0.31 81.87 1.62 0.32 12205 0.5 0.1 11676 0.4 0.1 0.8040 TMC Aland 35245 0.20 0.08 14.73 0.29 0.06 4129 0.2 0.0 10873 0.4 0.1 0.2441 TMC Anekal 33157 0.18 0.07 5.00 0.10 0.02 3511 0.1 0.0 6949 0.2 0.0 0.1742 TMC Annigeri 25710 0.14 0.06 11.18 0.22 0.04 3081 0.1 0.0 7951 0.3 0.1 0.1843 TMC Arsikere 45166 0.25 0.10 11.13 0.22 0.04 7823 0.3 0.1 6474 0.2 0.0 0.2544 TMC Athni 40950 0.23 0.09 9.09 0.18 0.04 7882 0.3 0.1 7948 0.3 0.1 0.2445 TMC BailHongal 43225 0.24 0.10 12.76 0.25 0.05 4165 0.2 0.0 8171 0.3 0.1 0.2346 TMC Bangarapet 38703 0.22 0.09 5.14 0.10 0.02 8347 0.3 0.1 5977 0.2 0.0 0.2147 TMC Basavakalyan 58785 0.33 0.13 17.21 0.34 0.07 8526 0.3 0.1 15916 0.5 0.1 0.3748 TMC Bhalki 35093 0.20 0.08 31.31 0.62 0.12 8528 0.3 0.1 7531 0.2 0.0 0.3149 TMC Bhatkal 42142 0.23 0.09 10.36 0.20 0.04 1157 0.0 0.0 3529 0.1 0.0 0.1750 TMC Birur 22702 0.13 0.05 1.91 0.04 0.01 4720 0.2 0.0 4521 0.1 0.0 0.1251 TMC Byadgi 25663 0.14 0.06 3.35 0.07 0.01 5481 0.2 0.0 5091 0.2 0.0 0.1452 TMC Challakere 49067 0.27 0.11 30.71 0.61 0.12 19764 0.7 0.1 9616 0.3 0.1 0.4453 TMC Channarayapatna 34515 0.19 0.08 10.50 0.21 0.04 3974 0.1 0.0 5770 0.2 0.0 0.1954 TMC Chiknayakanhalli 22389 0.12 0.05 5.02 0.10 0.02 3171 0.1 0.0 3905 0.1 0.0 0.1255 TMC Chikodi 32823 0.18 0.07 18.48 0.36 0.07 5881 0.2 0.0 4982 0.2 0.0 0.2256 TMC Chitgoppa 24419 0.14 0.05 27.79 0.55 0.11 3315 0.1 0.0 6307 0.2 0.0 0.2357 TMC Devanahalli 23406 0.13 0.05 15.94 0.31 0.06 6508 0.2 0.0 5328 0.2 0.0 0.2058 TMC Gajendragarh 28226 0.16 0.06 18.82 0.37 0.07 5769 0.2 0.0 6730 0.2 0.0 0.2259 TMC Gauribidanur 30537 0.17 0.07 7.01 0.14 0.03 6406 0.2 0.0 5394 0.2 0.0 0.1860 TMC Guledgudda 33991 0.19 0.08 4.42 0.09 0.02 3533 0.1 0.0 7683 0.3 0.1 0.1761 TMC Gundlupet 26340 0.15 0.06 7.86 0.16 0.03 9524 0.4 0.1 6690 0.2 0.0 0.2062 TMC Hangal 25009 0.14 0.06 24.36 0.48 0.10 1809 0.1 0.0 5541 0.2 0.0 0.20

269

Sl.No. Civic Status



Weight assigned -

No. Proportion

Weight assigned -

No. Proportion

Weight assigned -

40 20 20 20



63 TMC Haveri 55913 0.31 0.12 26.19 0.52 0.10 9386 0.4 0.1 9839 0.3 0.1 0.3664 TMC Hiriyur 48806 0.27 0.11 20.22 0.40 0.08 12644 0.5 0.1 9608 0.3 0.1 0.3565 TMC HoleNarsipur 27024 0.15 0.06 3.46 0.07 0.01 6539 0.2 0.0 4336 0.1 0.0 0.1566 TMC Homnabad 36517 0.20 0.08 6.60 0.13 0.03 6577 0.2 0.0 8157 0.3 0.1 0.2167 TMC Hosakote 36323 0.20 0.08 14.28 0.28 0.06 4707 0.2 0.0 6739 0.2 0.0 0.2268 TMC Hunsur 43900 0.24 0.10 11.76 0.23 0.05 10472 0.4 0.1 8460 0.3 0.1 0.2869 TMC Ilkal 51920 0.29 0.12 11.77 0.23 0.05 5944 0.2 0.0 12693 0.4 0.1 0.2970 TMC Indi 31482 0.18 0.07 27.14 0.54 0.11 7454 0.3 0.1 8806 0.3 0.1 0.2971 TMC Jamkhandi 57883 0.32 0.13 9.39 0.19 0.04 8203 0.3 0.1 13318 0.4 0.1 0.3172 TMC Kadur 30814 0.17 0.07 10.34 0.20 0.04 5812 0.2 0.0 6196 0.2 0.0 0.1973 TMC Kampli 35380 0.20 0.08 23.66 0.47 0.09 9653 0.4 0.1 10894 0.4 0.1 0.3274 TMC Kanakapura 47060 0.26 0.10 7.20 0.14 0.03 6050 0.2 0.0 10821 0.4 0.1 0.2575 TMC Karkal 25116 0.14 0.06 23.06 0.46 0.09 2141 0.1 0.0 2196 0.1 0.0 0.1876 TMC Kollegal 52607 0.29 0.12 27.56 0.54 0.11 19783 0.7 0.1 11026 0.4 0.1 0.4577 TMC Koppal 64275 0.36 0.14 15.16 0.30 0.06 10193 0.4 0.1 14725 0.5 0.1 0.3878 TMC Krishnarajanagara 30633 0.17 0.07 8.60 0.17 0.03 6052 0.2 0.0 5040 0.2 0.0 0.1879 TMC Kumta 34499 0.19 0.08 20.42 0.40 0.08 2055 0.1 0.0 4447 0.1 0.0 0.2080 TMC Kundapura 28591 0.16 0.06 14.01 0.28 0.06 1555 0.1 0.0 3401 0.1 0.0 0.1581 TMC Kunigal 30343 0.17 0.07 5.68 0.11 0.02 3450 0.1 0.0 5637 0.2 0.0 0.1582 TMC Lakshmeshwar 33417 0.19 0.07 6.95 0.14 0.03 3821 0.1 0.0 8431 0.3 0.1 0.1983 TMC Maddur 26521 0.15 0.06 6.32 0.12 0.02 3939 0.1 0.0 5202 0.2 0.0 0.1584 TMC Madhugiri 26304 0.15 0.06 8.00 0.16 0.03 6540 0.2 0.0 4721 0.2 0.0 0.1785 TMC Madikeri 32496 0.18 0.07 15.92 0.31 0.06 3724 0.1 0.0 2525 0.1 0.0 0.1886 TMC Magadi 25031 0.14 0.06 4.98 0.10 0.02 3342 0.1 0.0 5157 0.2 0.0 0.1387 TMC Mahalingpur 30858 0.17 0.07 9.80 0.19 0.04 4833 0.2 0.0 8609 0.3 0.1 0.2088 TMC Malavalli 35851 0.20 0.08 3.29 0.06 0.01 8345 0.3 0.1 8506 0.3 0.1 0.2189 TMC Malur 27815 0.15 0.06 9.26 0.18 0.04 4491 0.2 0.0 5657 0.2 0.0 0.1790 TMC Manvi 37613 0.21 0.08 2.45 0.05 0.01 9231 0.3 0.1 13891 0.5 0.1 0.2591 TMC Mudalgi 29893 0.17 0.07 11.52 0.23 0.05 3734 0.1 0.0 11158 0.4 0.1 0.2192 TMC Mudbidri 25713 0.14 0.06 40.51 0.80 0.16 3021 0.1 0.0 2815 0.1 0.0 0.2693 TMC Muddebihal 28219 0.16 0.06 6.84 0.14 0.03 3635 0.1 0.0 5378 0.2 0.0 0.15

270

Sl.No. Civic Status



Weight assigned -

No. Proportion

Weight assigned -

No. Proportion

Weight assigned -

40 20 20 20



94 TMC Mudhol 42461 0.24 0.09 4.79 0.09 0.02 6989 0.3 0.1 11239 0.4 0.1 0.2495 TMC Mulbagal 44033 0.25 0.10 18.46 0.36 0.07 5644 0.2 0.0 10825 0.4 0.1 0.2896 TMC Nanjangud 48232 0.27 0.11 14.08 0.28 0.06 11641 0.4 0.1 10073 0.3 0.1 0.3297 TMC Nargund 32561 0.18 0.07 19.57 0.39 0.08 3932 0.1 0.0 9684 0.3 0.1 0.2498 TMC Puttur 48070 0.27 0.11 35.08 0.69 0.14 5656 0.2 0.0 4723 0.2 0.0 0.3299 TMC Ramdurg 36649 0.20 0.08 3.67 0.07 0.01 4981 0.2 0.0 8434 0.3 0.1 0.19100 TMC Sagar 62701 0.35 0.14 61.74 1.22 0.24 6257 0.2 0.0 7000 0.2 0.0 0.48101 TMC Sakleshpur 23176 0.13 0.05 4.69 0.09 0.02 2737 0.1 0.0 3293 0.1 0.0 0.11102 TMC Saligram 14962 0.08 0.03 14.69 0.29 0.06 1129 0.0 0.0 2462 0.1 0.0 0.12103 TMC Sankeshwar 32511 0.18 0.07 7.29 0.14 0.03 4345 0.2 0.0 6389 0.2 0.0 0.18104 TMC Saundatti-Yellamma 38155 0.21 0.08 16.00 0.32 0.06 3466 0.1 0.0 9963 0.3 0.1 0.24105 TMC Savanur 35563 0.20 0.08 5.49 0.11 0.02 3176 0.1 0.0 12478 0.4 0.1 0.21106 TMC Sedam 40128 0.22 0.09 36.34 0.72 0.14 9381 0.4 0.1 11577 0.4 0.1 0.38107 TMC Shahabad 101264 0.56 0.23 63.37 1.25 0.25 34172 1.3 0.3 28454 0.9 0.2 0.92108 TMC Shahpur 38907 0.22 0.09 39.65 0.78 0.16 5515 0.2 0.0 12910 0.4 0.1 0.37109 TMC Shikarpur 31516 0.18 0.07 18.76 0.37 0.07 3263 0.1 0.0 5307 0.2 0.0 0.20110 TMC Shorapur 43622 0.24 0.10 13.32 0.26 0.05 10821 0.4 0.1 13027 0.4 0.1 0.32111 TMC Shrirangapattana 23729 0.13 0.05 11.62 0.23 0.05 3103 0.1 0.0 5043 0.2 0.0 0.16112 TMC Sidlaghatta 41098 0.23 0.09 3.57 0.07 0.01 4054 0.2 0.0 10161 0.3 0.1 0.20113 TMC Sindgi 27732 0.15 0.06 1.46 0.03 0.01 4057 0.2 0.0 7473 0.2 0.0 0.15114 TMC Sindhnur 61262 0.34 0.14 30.58 0.60 0.12 7702 0.3 0.1 19342 0.6 0.1 0.44115 TMC Sira 50088 0.28 0.11 12.98 0.26 0.05 9827 0.4 0.1 10254 0.3 0.1 0.30116 TMC Talikota 26205 0.15 0.06 2.79 0.06 0.01 2732 0.1 0.0 6152 0.2 0.0 0.13117 TMC Tiptur 53104 0.30 0.12 10.27 0.20 0.04 6425 0.2 0.0 8035 0.3 0.1 0.26118 TMC Vijayapura 29540 0.16 0.07 14.55 0.29 0.06 3980 0.1 0.0 6775 0.2 0.0 0.20119 TMC Yadgir 58811 0.33 0.13 14.95 0.30 0.06 11574 0.4 0.1 16933 0.6 0.1 0.39120 TP Afzalpur 19335 0.11 0.04 2.84 0.06 0.01 3549 0.1 0.0 6084 0.2 0.0 0.12121 TP Alnavar 16290 0.09 0.04 8.47 0.17 0.03 1215 0.0 0.0 3110 0.1 0.0 0.10122 TP Alur 6133 0.03 0.01 1.59 0.03 0.01 1752 0.1 0.0 1140 0.0 0.0 0.04123 TP Ankola 26138 0.15 0.06 16.64 0.33 0.07 3686 0.1 0.0 3059 0.1 0.0 0.17124 TP Arkalgud 15169 0.08 0.03 2.37 0.05 0.01 3259 0.1 0.0 3574 0.1 0.0 0.09

271

Sl.No. Civic Status



Weight assigned -

No. Proportion

Weight assigned -

No. Proportion

Weight assigned -

40 20 20 20



125 TP Aurad 15804 0.09 0.04 7.06 0.14 0.03 3512 0.1 0.0 4453 0.1 0.0 0.12126 TP Badami 25847 0.14 0.06 5.55 0.11 0.02 4981 0.2 0.0 5409 0.2 0.0 0.15127 TP Bagepalli 20119 0.11 0.04 2.31 0.05 0.01 4738 0.2 0.0 4548 0.1 0.0 0.12128 TP Bankapura 20324 0.11 0.05 19.42 0.38 0.08 1039 0.0 0.0 5424 0.2 0.0 0.17129 TP Bannur 23239 0.13 0.05 3.09 0.06 0.01 6140 0.2 0.0 7054 0.2 0.0 0.16130 TP Bantval 54820 0.31 0.12 63.19 1.25 0.25 1731 0.1 0.0 5125 0.2 0.0 0.42131 TP BasavanaBagevadi 28560 0.16 0.06 126.51 2.50 0.50 6412 0.2 0.0 9033 0.3 0.1 0.67132 TP Beltangadi 7305 0.04 0.02 8.87 0.18 0.04 1127 0.0 0.0 918 0.0 0.0 0.07133 TP Belur 20228 0.11 0.05 4.56 0.09 0.02 2873 0.1 0.0 2569 0.1 0.0 0.10134 TP Bilgi 15454 0.09 0.03 0.58 0.01 0.00 2592 0.1 0.0 4364 0.1 0.0 0.08135 TP Channagiri 18512 0.10 0.04 1.16 0.02 0.00 2923 0.1 0.0 3009 0.1 0.0 0.09136 TP Chincholi 17144 0.10 0.04 9.84 0.19 0.04 4550 0.2 0.0 4959 0.2 0.0 0.14137 TP Chitapur 27006 0.15 0.06 74.40 1.47 0.29 7618 0.3 0.1 10223 0.3 0.1 0.48138 TP Devadurga 21994 0.12 0.05 0.84 0.02 0.00 9439 0.4 0.1 8349 0.3 0.1 0.18139 TP Gubbi 16805 0.09 0.04 4.38 0.09 0.02 2831 0.1 0.0 2320 0.1 0.0 0.09140 TP Gudibanda 8807 0.05 0.02 0.64 0.01 0.00 2470 0.1 0.0 2260 0.1 0.0 0.06141 TP Gurmatkal 16923 0.09 0.04 2.34 0.05 0.01 2178 0.1 0.0 5925 0.2 0.0 0.10142 TP Haliyal 25501 0.14 0.06 18.17 0.36 0.07 3600 0.1 0.0 4968 0.2 0.0 0.19143 TP Harapanahalli 41907 0.23 0.09 40.93 0.81 0.16 9369 0.4 0.1 13210 0.4 0.1 0.41144 TP Heggadadevankote 12045 0.07 0.03 1.89 0.04 0.01 4868 0.2 0.0 2637 0.1 0.0 0.09145 TP Hirekerur 15872 0.09 0.04 12.93 0.26 0.05 2673 0.1 0.0 2569 0.1 0.0 0.12146 TP Holalkere 14574 0.08 0.03 0.66 0.01 0.00 3344 0.1 0.0 2306 0.1 0.0 0.08147 TP Honavar 17824 0.10 0.04 8.86 0.17 0.03 547 0.0 0.0 1928 0.1 0.0 0.09148 TP Honnali 15568 0.09 0.03 0.68 0.01 0.00 1117 0.0 0.0 3190 0.1 0.0 0.07149 TP HoovinaHadagalli 23414 0.13 0.05 19.83 0.39 0.08 3973 0.1 0.0 6356 0.2 0.0 0.20150 TP Hosanagara 5043 0.03 0.01 3.50 0.07 0.01 1097 0.0 0.0 475 0.0 0.0 0.04151 TP Hosdurga 22488 0.13 0.05 5.26 0.10 0.02 3432 0.1 0.0 3702 0.1 0.0 0.12152 TP Hukeri 19917 0.11 0.04 6.23 0.12 0.02 2409 0.1 0.0 4520 0.1 0.0 0.12153 TP Hungund 18037 0.10 0.04 6.01 0.12 0.02 2806 0.1 0.0 4083 0.1 0.0 0.11154 TP Jagalur 14744 0.08 0.03 0.94 0.02 0.00 4173 0.2 0.0 1993 0.1 0.0 0.08155 TP Jevargi 19179 0.11 0.04 10.18 0.20 0.04 4333 0.2 0.0 5703 0.2 0.0 0.15

272

Sl.No. Civic Status



Weight assigned -

No. Proportion

Weight assigned -

No. Proportion

Weight assigned -

40 20 20 20



156 TP Kalghatgi 14680 0.08 0.03 23.92 0.47 0.09 3057 0.1 0.0 3492 0.1 0.0 0.17157 TP Kamalapuram 21830 0.12 0.05 39.62 0.78 0.16 10039 0.4 0.1 7957 0.3 0.1 0.33158 TP Kerur 17217 0.10 0.04 5.59 0.11 0.02 3113 0.1 0.0 4793 0.2 0.0 0.12159 TP Khanapur 22840 0.13 0.05 9.49 0.19 0.04 3112 0.1 0.0 3262 0.1 0.0 0.13160 TP Konnur 17980 0.10 0.04 33.38 0.66 0.13 5782 0.2 0.0 4883 0.2 0.0 0.25161 TP Koppa 5113 0.03 0.01 1.99 0.04 0.01 362 0.0 0.0 484 0.0 0.0 0.03162 TP Koratagere 13655 0.08 0.03 1.20 0.02 0.00 4228 0.2 0.0 2494 0.1 0.0 0.08163 TP Kotturu 22701 0.13 0.05 35.26 0.70 0.14 4138 0.2 0.0 4344 0.1 0.0 0.25164 TP Krishnarajpet 22580 0.13 0.05 4.26 0.08 0.02 3649 0.1 0.0 4227 0.1 0.0 0.12165 TP Kudchi 19843 0.11 0.04 4.89 0.10 0.02 2756 0.1 0.0 6121 0.2 0.0 0.12166 TP Kudligi 21849 0.12 0.05 32.18 0.64 0.13 10537 0.4 0.1 6822 0.2 0.0 0.30167 TP Kundgol 16840 0.09 0.04 1.17 0.02 0.00 1616 0.1 0.0 3955 0.1 0.0 0.08168 TP Kushtagi 21183 0.12 0.05 11.34 0.22 0.04 4567 0.2 0.0 4655 0.2 0.0 0.16169 TP Lingsugur 27306 0.15 0.06 7.37 0.15 0.03 5986 0.2 0.0 7864 0.3 0.1 0.19170 TP Molakalmuru 14133 0.08 0.03 43.06 0.85 0.17 3712 0.1 0.0 3016 0.1 0.0 0.25171 TP Mudgal 19116 0.11 0.04 7.54 0.15 0.03 2220 0.1 0.0 6268 0.2 0.0 0.13172 TP Mudigere 8963 0.05 0.02 0.92 0.02 0.00 1039 0.0 0.0 731 0.0 0.0 0.04173 TP Mulgund 18098 0.10 0.04 7.81 0.15 0.03 2213 0.1 0.0 5938 0.2 0.0 0.13174 TP Mulki 16389 0.09 0.04 10.10 0.20 0.04 1283 0.0 0.0 2009 0.1 0.0 0.10175 TP Mundargi 20363 0.11 0.05 6.64 0.13 0.03 4014 0.1 0.0 4648 0.2 0.0 0.13176 TP Mundgod 16173 0.09 0.04 11.99 0.24 0.05 3221 0.1 0.0 2777 0.1 0.0 0.13177 TP Nagamangala 16052 0.09 0.04 2.52 0.05 0.01 1556 0.1 0.0 2764 0.1 0.0 0.08178 TP Narasimharajapura 7464 0.04 0.02 1.72 0.03 0.01 1306 0.0 0.0 854 0.0 0.0 0.04179 TP Naregal 16685 0.09 0.04 85.72 1.69 0.34 3514 0.1 0.0 4366 0.1 0.0 0.43180 TP Navalgund 22202 0.12 0.05 42.93 0.85 0.17 3372 0.1 0.0 5962 0.2 0.0 0.28181 TP Nelamangala 25287 0.14 0.06 2.85 0.06 0.01 4302 0.2 0.0 3035 0.1 0.0 0.12182 TP Pandavapura 18310 0.10 0.04 3.68 0.07 0.01 2503 0.1 0.0 3994 0.1 0.0 0.10183 TP Pavagada 28068 0.16 0.06 6.57 0.13 0.03 8616 0.3 0.1 6064 0.2 0.0 0.19184 TP Piriyapatna 14924 0.08 0.03 5.99 0.12 0.02 2836 0.1 0.0 3350 0.1 0.0 0.10185 TP Raybag 15929 0.09 0.04 6.81 0.13 0.03 3231 0.1 0.0 2892 0.1 0.0 0.11186 TP Ron 21643 0.12 0.05 68.65 1.36 0.27 2722 0.1 0.0 5651 0.2 0.0 0.38

273

Sl.No. Civic Status



Weight assigned -

No. Proportion

Weight assigned -

No. Proportion

Weight assigned -

40 20 20 20



187 TP Sadalgi 20202 0.11 0.04 12.22 0.24 0.05 3068 0.1 0.0 5637 0.2 0.0 0.15188 TP Sandur 34168 0.19 0.08 23.51 0.46 0.09 9533 0.4 0.1 7568 0.2 0.0 0.29189 TP Shiggaon 24327 0.14 0.05 4.04 0.08 0.02 1813 0.1 0.0 6401 0.2 0.0 0.13190 TP Shirhatti 16208 0.09 0.04 1.71 0.03 0.01 1295 0.0 0.0 4377 0.1 0.0 0.08191 TP Siddapur 14050 0.08 0.03 18.52 0.37 0.07 798 0.0 0.0 1622 0.1 0.0 0.12192 TP Siralkoppa 14501 0.08 0.03 1.80 0.04 0.01 2215 0.1 0.0 2488 0.1 0.0 0.07193 TP Siruguppa 42919 0.24 0.10 31.14 0.62 0.12 11198 0.4 0.1 14577 0.5 0.1 0.40194 TP Somvarpet 20406 0.11 0.05 4.59 0.09 0.02 3123 0.1 0.0 2289 0.1 0.0 0.10195 TP Sorab 7427 0.04 0.02 1.89 0.04 0.01 937 0.0 0.0 675 0.0 0.0 0.04196 TP Sringeri 4249 0.02 0.01 0.46 0.01 0.00 306 0.0 0.0 392 0.0 0.0 0.02197 TP Srinivaspur 22959 0.13 0.05 1.84 0.04 0.01 3864 0.1 0.0 4990 0.2 0.0 0.12198 TP Sulya 18028 0.10 0.04 17.13 0.34 0.07 2819 0.1 0.0 1837 0.1 0.0 0.14199 TP Tarikere 34066 0.19 0.08 2.28 0.05 0.01 4962 0.2 0.0 7113 0.2 0.0 0.17200 TP Tekkalakote 23583 0.13 0.05 43.25 0.85 0.17 9917 0.4 0.1 12022 0.4 0.1 0.38201 TP Terdal 23616 0.13 0.05 6.70 0.13 0.03 5581 0.2 0.0 7721 0.3 0.1 0.17202 TP Tirthahalli 14808 0.08 0.03 6.70 0.13 0.03 1598 0.1 0.0 1482 0.0 0.0 0.08203 TP Tirumakudal-Narsipur 9927 0.06 0.02 1.00 0.02 0.00 3550 0.1 0.0 2314 0.1 0.0 0.07204 TP Turuvekere 17517 0.10 0.04 5.02 0.10 0.02 2431 0.1 0.0 2252 0.1 0.0 0.09205 TP Ullal 49895 0.28 0.11 35.04 0.69 0.14 915 0.0 0.0 6720 0.2 0.0 0.30206 TP Virajpet 22480 0.13 0.05 6.09 0.12 0.02 2506 0.1 0.0 1987 0.1 0.0 0.11207 TP Yelandur 8585 0.05 0.02 0.43 0.01 0.00 5054 0.2 0.0 2735 0.1 0.0 0.08208 TP Yelbarga 11442 0.06 0.03 1.15 0.02 0.00 1671 0.1 0.0 3135 0.1 0.0 0.06209 TP Yellapur 17923 0.10 0.04 64.60 1.28 0.26 1786 0.1 0.0 2514 0.1 0.0 0.32210 NAC Bhimarayanagudi 4792 0.03 0.01 2.98 0.06 0.01 1066 0.0 0.0 684 0.0 0.0 0.03211 NAC HattiGoldMines 27142 0.15 0.06 7.05 0.14 0.03 9475 0.4 0.1 6006 0.2 0.0 0.20212 NAC Krishnarajasagara 8493 0.05 0.02 3.47 0.07 0.01 1605 0.1 0.0 1897 0.1 0.0 0.06213 NAC Kudremukh 8102 0.05 0.02 45.43 0.90 0.18 1509 0.1 0.0 705 0.0 0.0 0.21

17961529 100.00 40.00 5063.19 100.00 20.00 2676143 100.0 20.0 3047460 100.0 20.0 100.00

274

C H A P T E R – 2 9

Problems and Issues in Implementation of Programmes by Various Line Departments in District

Sector

29.1 Introduction of Panchayat Raj System has resulted in a two-way

approach in implementation of schemes and programmes for economic

development and social justice. Schemes and programmes are categorized

under Plan and Non-Plan. Broadly, expenditure incurred under Plan is

for development, asset creation and social wellbeing, whereas, under

Non-Plan, it is for salaries, pensions, debt servicing and

maintenance. Further, the State Plan is divided into two components

viz., State Sector and District Sector. State sector schemes are

implemented by the various line departments. Whereas, district sector

schemes are implemented through PRIs. The PRIs have the autonomy for

preparation of an Action Plan1. The field level functionaries of line

departments have the responsibility of implementing the district sector

schemes assigned to the PRIs. Composition of State’s Annual Plan is shown

in Diagram-29.1.

29.2 Although the state government has taken adequate measures to

transfer schemes and programmes to the three spheres of Panchayat Raj

System as per the functions assigned to them, a major portion of the

plan funds are spent through the line departments. The “Annual

Plan Document” consisting of sectoral and schematic details of outlays

provided under state and district sectors is prepared every year by the

Planning Department.

1 Prioritisation of works to be taken up in implementation of schemes and programmes


C H A P T E R - 2 9

Diagram-29.1

Flow Chart on Composition of State’s Annual Plan

A N N U A L P L A N O F S T A T E

S T A T E S E C T O R

D I S T R I C T S E C T O R

Central Plan Schemes

Centrally Sponsored Schemes

Additional Central Assisted Schemes

Externally Aided Projects

Central Plan Schemes

Centrally Sponsored Schemes

Ongoing State Plan Schemes

New Schemes

Agency for Implementation

PRIs & LDs

LDs

Ongoing State Plan Schemes

New Schemes

Note: LDs: Line Departments PRIs: Panchayat Raj Institutions

29.3 It is pertinent here to note that the growth in allocation of funds

under district sector is not commensurate with the growth in the total

plan size of the State. A cursory look at the Annual Plan of the State for the

financial year 2008-09 itself reflects this phenomenon. A comparative

picture of outlays budgeted during the Annual Plans 2007-08 and 2008-09 is

shown in Table-29.1.


C H A P T E R - 2 9

Table – 29.1

Annual Plans 2007-08 and 2008-09 of Karnataka

Annual Plan

State Plan (Rs.crores)

District Plan

(Rs.crores)

Percentage of District

Plan

2007-08 17782.55 2240.60 12.60

2008-09 25952.83 2636.02 10.12

Source: Annual Plan 2008-09 (August 2008), Planning Department;

Revised Link Document 2008-09, Finance Department

29.4 The outlay budgeted in the Annual Plan 2008-09 is Rs.25952.83 crores,

which represents an increase of 46 percent over the budgeted outlay of

Rs.17782.55 crores in 2007-08. Whereas, the District Plan size for 2008-09

is budgeted at Rs.2636.02 crores which is about 17 percent higher than the

corresponding allocation of Rs.2240.60 crores in 2007-08. But it is

disheartening to note that the district plan size forms just 10 percent

of the total plan outlay. If similar trend continues in the coming years;

there is every possibility of the district plan size getting reduced to single

digit percentage of the total plan size.

29.5 However, besides State Plan Schemes, the PRIs have an additional

responsibility of implementing the Central Plan Schemes [CPS] and

Centrally Sponsored Schemes [CSS]. The allocation of funds during the

financial years 2007-08 and 2008-09 made to PRIs vis-à-vis total funds

allocated to the State is shown in Table-29.2.


C H A P T E R - 2 9

Table-29.2

Allocation of funds for CPS and CSS during 2007-08 and 2008-09

Annual Plan

Total Allocation of

funds for CPS and CSS

(Rs.crores)

Allocation of funds for

CPS and CSS to PRIs

(Rs.crores)

Percentage

2007-08 2749.46 1330.25 48.38

2008-09 2245.71 1784.59 79.47

Source: Details of Provision for Plan Schemes 2008-09, Finance Department;

Revised Link Document 2008-09, Finance Department

29.6 Having noticed such trends in allocation of funds by the State

Government and keeping in view the Terms of Reference – “The

Commission shall also examine and make suggestion on the extent

to which and the manner in which the resources available to the

local bodies could best be utilized for meeting the expenditure of

these bodies”, the TSFC took a decision to interact with the concerned

officers of the line departments on the following issues;

♦ Changes required in the Plan and Non-plan schemes of the District Sector

♦ Identification of schemes/programmes that may be transferred from State Sector to District Sector

♦ Higher budgetary support for District Sector programmes

♦ Hindrances in implementation of programmes while achieving the set targets

♦ Improvement of Monitoring mechanism of District Sector schemes

♦ Vacancy position of functionaries in various cadres


C H A P T E R - 2 9

29.7 Sectorwise distribution of funds effected by the state government to

PRIs for implementation of schemes and programmes in the District Sector

has been analyzed in Chapter-23. This chapter is an attempt to summarize

the information made available by the line departments and the

interactions that the TSFC had with the Principal Secretaries, Secretaries,

Heads of Departments and senior officers of the line departments. What

follows is the summary of views/suggestions and problems put forth by the

line departments;

29.8 Agriculture:

1. Release of funds to programmes of agriculture sector should be given

first priority as these programmes are time and season bound.

2. Funds are being released quarterly by the Finance Department to the

ZPs. The process of further release of funds to the implementing

officers by the ZPs is getting delayed. Quick action will facilitate

timely implementation of programmes.

3. There should be flexibility in utilization of unspent amount in one

scheme for another scheme involving heavy expenditure.

4. The scope of Bhumi software should be broadened to incorporate

soico-economic issues which would facilitate speedy identification

of beneficiaries.

5. Co-operative societies should be strengthened and all financial

assistance extended to the farmers should be channeled through

them. Crop insurance should be made mandatory for all crop loans

given to the farmers.

6. The Agriculture department is facing severe shortage of technical

staff due to low output of agriculture graduates by the


C H A P T E R - 2 9

agricultural universities. There are 1325 posts of Agricultural

Officers vacant against a sanctioned strength of 1637 posts.

Similarly, there are 1003 posts of Agricultural Assistants vacant

against a sanctioned strength of 2938 posts. Overall, 37 percent of

posts are vacant in the department. An abstract of vacancy position

is shown in Table-29.3.

Table – 29.3

Vacancy position in Agriculture Department

Group Sanctioned Posts

Filledup Posts

Vacant Percentage of Vacancy

A 524 466 58 11.07

B 2855 1120 1735 60.77

C 5047 3558 1489 29.50

D 1175 901 274 23.32

Total 9601 6045 3556 37.04

29.9 Watershed Development:

1. The department is facing staff shortage to implement various

programmes under State and District sectors. 96 percent of posts in

the department are at the district level and out of this 1415 posts

are vacant.

2. The vacant posts of agriculture assistants, horticulture assistants,

foresters, forest guards and gardeners are large in number.


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29.10 Animal Husbandry & Veterinary Services:

1. 1087 posts of veterinary officers are vacant. It would take longer

period to fillup these posts since the output from the veterinary

colleges in the state at present is only about 120 doctors and after

three years it will reach 180. In view of this situation it is necessary to

enhance the intake capacity of students in the veterinary colleges.

Further, incentives and scholarships should be given to students

to encourage them to take up this profession. There is a disparity in

pay between MBBS doctors and veterinary doctors. This should be set

right.

2. A post of Planning Officer at the district level should be created for

monitoring of district sector schemes.

3. There is an urgent need to replace the old vehicles which were

purchased 15-20 years back for the use of mobile dispensaries. This

would facilitate speedy and timely assistance to the farmers.

4. Necessary infrastructure has already been provided for the 20 newly

sanctioned polyclinics in the State. These polyclinics are being run

by utilizing the services of staff available at the places where these

clinics exist. But the posts of specialists and technicians viz.,

veterinary surgeon, veterinary gynecologist, veterinary medicine, lab

technician (x-ray) and lab technician (diagnostician) for each

polyclinic should be created to achieve the purpose of establishing

these polyclinics.

5. The State has about 284 lakh livestock and 214 lakh poultry. There is

a shortfall of about Rs.120 crores for supply of drugs and

medicines. Similarly, an additional amount of Rs.20 crores is


C H A P T E R - 2 9

required for immunizing the livestock against foot and mouth

disease.

6. The scheme “Opening of Rural Veterinary Dispensaries and their

Upgradation as Taluk Level Dispensaries” being implemented

through the Taluk Panchayats would require an additional grant of

Rs.6.88 crores.

29.11 Fisheries:

1. A Proposal has been sent to the government for enhancement of

subsidy from Rs.25,000 to Rs.50,000 for construction of Fish Markets

by the GPs and ULBs.

2. Similarly, another proposal has been sent to the government for

enhancement of unit cost from Rs.30,000 to Rs.40,000 and subsidy

from Rs.7,500 to 20,000 for installation of life saving equipments in

fishing boats.

3. Higher allocation of funds is necessary for the scheme “Fish Seed

Production, Rearing and Distribution” implemented under District

Sector.

29.12 Forest:

1. The Forest Department is finding it difficult to take up works under

NREGS, particularly in relation to the labour component. The

reasons are- lower wage rates, providing maximum 100 days of wage

employment per family, non-availability of labour during rainy season

as it collides with agricultural activities, aforestation works continue

for 4-5 years but no grants are available for ongoing works under

NREGS.


C H A P T E R - 2 9

2. There is a need for additional grants of Rs.4.00 crores to clear

pending wage bills for the financial years 2006-07 and 2007-08.

3. About 2500 posts of foresters, forest guards and forest watchers are

vacant.

29.13 Women and Child Development:

1. The unit cost for Supplementary Nutrition programme should be

enhanced. Currently, it is Rs. 2.00 per beneficiary per day for

normal children, including transportation charges. With this unit

cost, the department is finding it difficult to provide food rich with

the requisite nutritional contents. An additional grant of Rs.69 crores

under Plan and Rs.71.50 crores under Non-plan will be the

requirement if the unit cost is enhanced by one rupee.

2. The unit cost for Construction of Anganawadi Buildings has

been enhanced to Rs.3.00 lakhs. The department contributes an

amount of Rs.50,000/- per building. This should be enhanced.

3. The honorarium given to Anganawadi Workers and Anganawadi

Helpers should be enhanced. Honorarium currently given needs to be

doubled to meet the demand of these workers. An additional grant of

Rs.73.43 crores is required for this purpose.

4. Medical reimbursement facility given to Anganawadi Workers and

Anganawadi Helpers, currently limited to three diseases should be

extended to other diseases and surgical operations.

5. The schemes viz., Financial Assistance for Women Law Graduates,

Medical Expenses of Malnourished Children and Medical

reimbursement & Death Relief Fund to Anganawadi Workers and


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Anganawadi Helpers implemented under State Sector may be

transferred to District Sector.

29.14 Social Welfare:

1. There are 1842 posts of wardens, supervisors, cooks and helpers

vacant in the hostels run by Backward Classes Welfare Department.

Non-filling up of these posts is causing problems for proper

maintenance of hostels. Government should take prompt action to

fillup these posts.

2. An additional grant of Rs.41.91 crores is required to clear the

pending bills pertaining to reimbursement of fees to the backward

classes students for the financial years 2006-07 and 2007-08.

3. There is a deficit of Rs. 7.00 crores in the Budget for the financial

year 2008-09 provided for maintenance of pre and post matric

backward classes hostels. This should be provided in the

supplementary grants.

4. 32 Private Aided Pre-matric Minorities Hostels-accorded approval

more than five years back and implemented as district sector plan

scheme - may be transferred to non-plan.

5. 50 Government Minorities Hostels and 15 Morarji Desai

Minorities Residential Schools newly sanctioned during the

financial year 2007-08 under State Sector may be transferred to the

District Sector.

6. Draft Cadre and Recruitment Rules submitted to the

Government by the Minorities Welfare Department need

consideration.


C H A P T E R - 2 9

7. In order to implement Land Ownership Scheme, Permission

should be given to the Ambedkar Development Corporation to

purchase land at market rate in view of the fact that there is a wide

difference between the guidance value and market value.

8. The underground water table in Kolar, Chikballapur, Bangalore,

Bangalore Rural and Ramnagaram districts has gone down

considerably. This has resulted in non-completion of works taken

up by the Ambedkar Development Corporation within the stipulated

unit cost. As such, the unit cost for digging borewells in these districts

should be enhanced.

29.15 Education:

1. Delay in approving Action Plan by the ZPs is causing problems in

timey implementation of programmes. Measures should be taken to

get the approvals by end of May every year.

2. Teachers are the focal point of the department. They depend only

on salaries as most of them are from lower and middle class families.

It is the responsibility of the department to keep them motivated

by paying their salaries in time. Too many heads of accounts is

causing delay in payment of salaries. There should be only one head

of account for this purpose.

3. Water supply maintenance, toilets cleaning, celebrations of national

festivals, celebrations of anniversaries of national leaders, school

annual day celebrations, conducting cultural programmes and

educational activity programmes require higher allocations.

4. New District Adult Education Offices in Bangalore Urban,

Chikballapur and Ramanagaram districts; and educational districts of

Yadgir, Madhugiri and Chikkodi are awaiting sanction.


C H A P T E R - 2 9

5. An additional allocation of Rs.1.81 crores is required for

strengthening libraries in 18,308 continuing education centres.

29.16 Sericulture:

1. Approval to Action Plan should be given at the beginning of the

financial year itself. Entire funds should be released in the first and

second quarters itself. This would facilitate proper implementation of

schemes.

2. An additional grant of Rs. 47 lakhs is required for providing subsidy

for construction of rearing/reeling sheds and incentives for bivoltine

production.

3. An additional grant of Rs. 180 lakhs is required for assistance to

Sericulturists to takeup activities such as disease control, supply of

necessary implements et cetra.

4. Separate provision should be made in the Link document to

implement schemes under SCP and TSP.

29.17 Village Industries:

1. With a view to promote industrial activities, interest subsidy should be

given to the industries established in rural areas.

2. Unit cost of supply of improved appliances to professional artisans

should be enhanced to Rs.5000.

29.18 Health & Family Welfare:

1. Delay in approval of Action Plan by the ZPs results in lower

expenditures in district sector schemes.

2. Department is facing shortage of specialists.


C H A P T E R - 2 9

3. There is a severe shortage of doctors in rural areas, this is due non-

availability of adequate housing and educational facilities.

4. There is a shortage of male nurses. 50 percent of Male Health

Assistants in the department are vacant.

5. There is a quota in Post Graduation courses for doctors who serve

for six years in rural areas. After completion of PG, the doctors are

reluctant to serve in rural areas and they are also prepared to quit the

service itself despite the fact that those who quit should reimburse the

fees.

6. ZPs are not making regular payment to the Karnataka State Drugs

Logistics & Warehousing Society for the supply of drugs made. A

system could be developed on similar lines as being done to deduct the

electricity charges at source from out of the grants to Grama

Panchyats.

Additional Special Grants to Sports and Youth Services Department

29.19 Sports & Youth Services Department was created in 1969 and in 1980

it became a prominent department. The department mainly implements

schemes for youth development and various schemes are formulated for

encouraging them for their all round development. In this direction, about

30,000 youth associations have been established and through these

associations many cultural, sports and training programmes in rural areas

are being conducted.

29.20 Every year, taluk level, district level and state level youth conferences

and workshops are conducted in order to involve them towards 11 points

programme of Former President of India Dr.Abdul Kalam. Further, youth

festivals are held at the taluk to state levels to showcase folk arts.


C H A P T E R - 2 9

Arrangements are being made every year for participation of about two lakh

youths.

29.21 In addition to the above, sports training programme has been

extended up to hobli level. Every year, rural sports meet, dasara sports

meet, women sports meet are being organized from taluk to state levels.

About three lakh boys, girls and youths have participated and availed the

benefits.

29.22 Programmes could not be held effectively since funds allotted to the

department are insufficient. Around 42 percent of State’s population

constitute youths. It is necessary to formulate programmes for their all

round development. Youths are the wealth of our nation. Their

development should take place according to their positive mental attitude.

It is necessary to control and stop untoward incidences that have occurred

recently. It is the responsibility of the department to make the youths to

participate in creative activities. In this direction, department needs to

organize more and more programmes from village level to state level. In

view of this, providing following additional funds is the responsibility of

state and the department to ensure human development;

• When the department was started, there was a post of Assistant

Youth Services & Sports Officer who used to co-ordinate with youth

associations at the village and taluk levels. These posts have been

abolished after retirement of persons from service. Since last 10 years

these posts are non-existing and as such, it has become very difficult

to organize programmes. Hence, it is necessary to create posts of

taluk level officers for all the 176 taluks of the state.


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• Services of volunteers could be utilized for co-ordination at the village

and hobli levels with taluk level officers and youth associations. Such

volunteers may be paid honorarium.

• Karnataka Youth Authority: It is necessary to create Karnataka

Youth Authority for the all round development of youths with

government aid and sponsors in order to organize more and more

programmes. In this Authority, along with officers, non-official

members should be nominated for seeking their suggestions, and with

their co-operation funds could be mobilized through sponsorship.

Suitable programmes for youths could be taken up utilizing the funds

thus mobilized.

• Youth Self Help Groups: In Women & Child Development

Department, self help groups for women have been formed and seed

money has been provided for taking up self employment. On similar

lines, it is necessary to form youth self help groups so that youths can

also be involved in self employment.

• Mobile Youth Training Programme: Mobile youth training

programmes could be taken up in selected villages of 29 districts of

the state to create awareness among the youths about personality

development, responsibilities of youths and usefulness of self

employment.

• A maximum grant of Rs.10,000 could be provided to organize

programmes at village level covering sanitation, health checkup,

cultural and folk sports.

• In order to safeguard and promote rural arts, folk arts training and

folk sports meets should be organized at taluk and district levels. A


C H A P T E R - 2 9

maximum of Rs.1.00 lakh grant should be given for construction of

youth association buildings.

• In order to safeguard and promote folk arts, a maximum of Rs.2.00

lakh grants should given for conducting folk arts training

programmes.

• To take up youth development programmes at village, hobli, taluk

and district levels a minimum of Rs.1.00 crore should be provided in

ZP budget.

29.23 Youth Services:

1. 176 Taluk Assistant Sports & Youth Services officers should be

recruited.

2. District sports schools, Provision of TA & DA to the participants in

sports meets, Assistance given to Youth centers, Construction and

Maintenance of district and taluk stadiums require higher allocations.

3. In order implement Panchayat Khel Abhiyan an allocation of Rs.50

lakhs should be made for each district.

4. There is a demand for indoor stadiums and swimming pools at the

district and taluk levels. This requires a grant of Rs.55 crores.


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Summary of Recommendations 30.1 Recommendations of Commission with respect to GPs (Chapter – 6)

1. As per section 3a of the Karnataka Panchayat Raj Act, 1993, Ward

Sabha and Grama Sabha should be conducted once in six months and

its proceedings should be vediographed.

2. Government should formulate clear and special yardsticks to identify

the persons living below poverty line.

3. The term of Adhyaksha and Upadhyaksha of GPs should be five

years.

4. Honorarium of Adhyaksha and Members should be enhanced.

5. The Power to Sanction financial assistance to deserving families for

performing last rights of a deceased person should be withdrawn from

Revenue Department and given to GPs.

6. Levy of tax and its collection should also be the responsibility of the

Adhayaksha of GP.

7. Proper rules should be framed for appointment of staff of GPs.

8. In case of misappropriation, the secretary should immediately inform

GP and the Executive Officer of TP.

9. As a supplement to transparency and responsibility, jamabandhi

should be held informing public and action taken on compliants

should be displayed on the notice board.

10. Suitable action should be taken for maintenance of accounts and

computerization.


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11. Technical staff should be made available for executing works and they

should be held responsible for poor quality of work.

12. An ombudsman should be created to control illegal activities and

corruption.

13. Rules should be framed for participation of NGOs and SHGs in the

developmental works of GPs.

14. Secretary and Adhyaksha should be made responsible for delay in

implementation of development works and poor collection of taxes.

15. Action should be taken to integrate the works of different

departments related to Agriculture, Horticulture, Dairy and other

activities at the village level. A single window system should be

created.

16. It is necessary that a minimum of 5% of funds is earmarked to

encourage rural sports, youth development and folk arts.

Verification of Accounts of GPs (4.28)

30.2 It is necessary that a post of Accounts Assistant is created and the

same is filled. Day to day financial transactions of GPs should be monitored

by TPs Online, as the GPs have been provided with computers. Since crores

of rupees is being spent, it is necessary that an audit wing is created in the

RD&PR on similar lines of Co-operation department. The present system of

auditing undertaken by the State Accounts Department is taking lot of time

and consequential follow up action is also getting delayed. Action should be

initiated to verify accounts of GPs for the past ten years.

Salary Protection for GPs Employees (6.6)

30.3 The Commission recommends protection of salaries of employees of

GPs who are working on daily wage or consolidated salary and the


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Notification dated:24.4.2008 published in Karnataka Gazette by the Labour

Secretariat regarding minimum wages should be considered.

Creation of Rural Infrastructure Development and Finance Corporation (4.25)

30.4 The Commission has observed that people living in rural areas are

put to hardship on account of lack of infrastructure. Hence, a Rural

Infrastructure Development and Finance Corporation should be created for

mobilizing capital for the development of rural roads, drinking water

supply, streetlights, et cetra in rural areas.

30.5 Recommendations of Commission with respect to TPs (Chapter-7)

1. Prioritisation of schemes entrusted to TPs should rest with TPs only.

2. Independent responsibility should be given to TPs to comprehensively

manage the functions assigned constitutionally to them.

3. Honorarium given to Adhayaksha and Upadhyaksha of TPs should be

enhanced.

4. Arrangement should be made to give necessary information to TP

members.

5. Services of Executive Officer of TP should be brought under Cadre &

Recruitment Rules and the post should not be below the rank of

Assistant Commissioner.

6. Executive officer should be responsible for implementation of works

and for any irregularities.

7. Executive officer should have direct control over all the taluk level

officers.


C H A P T E R - 3 0

8. It should be mandatory to hold monthly meetings of secretaries of

GPs to review the progress regarding their duties and tax collection.

9. The term of Adhyaksha of a TP should be 5 years.

10. Utilisation of Central Finance Commission funds should rest with

TPs only.

11. Conduct of Jamabhandhi in GPs of the taluk should be the

responsibility of Executive Officer of TP and he should also be

responsible for any irregularities.

12. Technical staff should be provided to supplement the implementation

of developmental schemes.

13. Technical staff should be responsible for quality maintenance and

should see that low quality works are not taken up.

14. Transparency should be maintained in implementation of all

programmes.

15. Executive Officer of TP should make sure that a senior taluk level

officer is present in GP meetings.

16. Accounts officer should be responsible to verify the accounts of GPs

every month and should set right any mistakes

30.6 Suggestions and Recommendations with respect to ZPs (Chapter – 10)

1. Adhyaksha of ZP should have the status of a cabinet minister and his

honorarium should be enhanced.

2. Adhyaksha of ZP should be given grants for taking up developmental

works of urgent nature.


C H A P T E R - 3 0

3. Prioritization, implementation and responsibilities regarding works of

ZP and works related programmes of central and state governments

should be with the ZPs.

4. Required knowledge about Acts and Rules should be imparted to ZP

members and awareness about their responsibility should be created

and necessary trainings should be given to them.

5. ZPs should have independent powers to utilize funds released under

CFC grants.

6. The issue of MLAs, MLCs and MPs being ex-officio members of ZPs

needs reconsideration.

7. Circulars and guidelines issued by state government should be

brought to the notice of ZP.

8. The Deputy Secretary of ZP should take up quarterly review meetings

at the TP level inviting officials of all the GPs. He should be

responsible to set right the grievances. The Chief Executive Officer of

ZP should invariably review the reports and take necessary actions.

9. Chief Executive Officer of ZP and Executive Officer of concerned TP

should have the responsibility of conducting Jamabandhi of all the

GPs.

10. Adhyaksha of ZP should visit a few GPs in a year and exchange views

and review the progress and should find out solutions to the

grievances.

11. Chief Executive Officer of ZP should visit TPs and atleast five GPs in

a month and hold review meetings. If misutilisation of funds is

noticed, he should take suitable action. He should also give guidance.


C H A P T E R - 3 0

12. ZPs should be given powers for re-appropriation of grants.

13. Implementation of programmes during rainy season is difficult in

malnad and coastal districts and as such, it is essential to give

additional time of three more months beyond March.

14. Release of Development grants through different boards, corporations

should be stopped, and all funds should be released through ZPs only.

30.7 Summary of Recommendations with respect to PRIs (Chapter – 10)

1. District Planning Committees should be strengthened and should

become active committees.

2. Planning, Programme Implementation and Statistics Department and

RD& PR Department should give continuous guidance to PRIs.

3. Speed up verification of accounts and avoid misutilisation.

4. ‘Piece Meal’ tender should not be allowed.

5. Basic statistics should be collected, consolidated and analysed.

6. Shortfall in development should be found out from analyzing

statistics and suitable solution should be found in implementation of

programmes and schemes.

7. A two year Action Plan should be prepared in October in order to

avoid delay in preparation of Action Plan. Based on this, Annual Plan

should be submitted to the government.

8. As envisaged in section 309 of Karnataka Panchayat Raj Act, 1993,

preparation of development plans should be taken up at all the three

levels of PRIs. Consolidated development plan should be submitted to

the government through District Planning Committees.


C H A P T E R - 3 0

9. Double entry accounting system should be extended to TPs and ZPs.

10. Directorate of Economics & Statistics, which is the nodal agency,

should give suitable guidance to PRIs.

11. Only 64 posts of Taluk Planning Officers have been created, these

posts should be created for the remaining taluks also and plan

preparation, programme implementation, evaluation and collection of

basic village statistics should be taken up.

12. Objectives of various programmes are for local development and as

such, the implementing officers should lay emphasis on ‘outcome’

rather than ‘output’.

13. Monthly Programme Implementation Calendar should be introduced

to avoid heavy expenditures at the fag end of financial year.

14. Grants meant for schemes should be utilized properly.

15. PRIs should be strengthened by revising the activity mapping.

16. GP functions such as maintenance of drinking water supply,

streetlights and cleaning could be given on annual contract

basis(AMC). This will result in savings and instances of misutilisation

could also be reduced.

17. It is necessary to give more powers to TPs and ZPs.

18. It is essential that the officers and staff serving in malnad and

Kodagu districts should be given special allowance and provided with

better working facilities.


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30.8 Views and Recommendations of Commission regarding District Planning Committee (Chapter – 11)

1. The present District Planning Committees should be made active.

These Committees should hold regular meetings.

2. District Planning Committees along with preparation of plans

should have the powers to review the progress of programme

implementation.

3. District Planning Committees should take quarterly reviews and

find out measures to solve the grievances.

4. The plans prepared by the State Planning Board should confirm

that district plans are incorporated.

5. It is necessary that state government takes up its plan after

consolidation of all district plans.

Achievement of Udupi District (12.7)

30.9 Owing to constant efforts during the past one year, most of the

Grama Panchayaths in Udupi district have successfully fixed meters for

house tap water connections. This has regulated water consumption. The

Commission has observed that collectively, there is a saving of about Rs. 50

lakhs for Grama Panchayaths in electricity charges. This is a commendable

achievement. This model may be emulated by all GPs. The Government has

to initiate action in this regard. The Commission recommends accordingly.

House Sites and Housing in Rural Areas (13.8)

30.10 Government should issue orders to provide house sites on a war

footing. Title deeds should be issued after allotting sites. Construction of

houses should be taken up thereafter, in a phased manner. All site less

persons and houseless persons should be compulsorily covered under


C H A P T E R - 3 0

various existing schemes over a period of 2-3 years and this is the

bounden duty of the Government.

Activity Mapping for Panchayat Raj Institutions (Chapter-14)

30.11 Activities that may be assigned to Gram Panchayats (14.5)

1. Selection of beneficiaries pertaining to all beneficiary oriented

schemes/programmes.

2. Supply of Drinking Water, Providing Street Lights etc.,

3. Rural sanitation

4. Supervision of the activities of Anganwadis and Primary Schools.

5. Supervision of the work of Primary Health Units.

6. Animal Husbandry Sector – Veterinary clinics, cattle breed

development programme.

7. Waste land utilisation, timely supply of seeds, fertilizers and

pesticides for Agriculture and Horticulture.

8. Implementation of programmes pertaining to Women and Child

Welfare.

9. Identification of houseless and siteless persons.

10. Other important matters related to rural life.

30.12 Activities that may be assigned to Taluk Panchayats (14.6)

1. House Construction Programme.

2. Major Taluk roads and bridges – construction and maintenance.

3. Maintenance of Higher Primary School buildings.

4. Superintendence of all poverty alleviation programmes.

5. Incentive and subsidy programmes of Agriculture, Horticulture,

Animal Husbandry and Fisheries Departments..

6. Providing infrastructure facilities through Taluk level Co-

operative societies.

7. Minor Irrigation Works – implementation and maintenance.


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8. Superintendence over Gram Panchayat Programmes.

9. Human Resources Development

30.13 Activities that may be assigned to Zilla Panchayats (14.7)

1. Water Supply – Plan preparation and implementation.

2. District Roads and Bridges – Construction and maintenance.

3. Implementation of medium irrigation schemes – providing water

for agriculture.

4. Rural electrification.

5. Matters pertaining to Education upto High School - maintenance

of high school buildings.

6. Rural housing schemes.

7. Encouragement for agriculture, horticulture, afforestation and

inland fisheries, waste land utilization, loans to farmers,

fishermen and those involved in dairy activities.

8. Providing house sites to the houseless identified by Gram

Panchayats.

9. Supplementary activities pertaining to the development of the

district.

10. Superintendence over Gram Panchayat and Taluk Panchayat

programmes.

Suggestions for better utilisation of grants provided to Panchayat Raj Institutions. (Chapter-15)

30.14 Funds earmarked by the Government for implementation of some

schemes are meagre amounts. Even those amounts are being released in

instalments. As a result, Panchayat Raj Institutions are not getting

sufficient finances. The Commission recommends that such schemes and

programmes be merged with those which are more beneficial. (15.1)


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30.15 If funds being provided to Gram Panchayats are released in two

installments instead of four, it can be better utilised. Likewise, based on

seasonal requirements, more funds have to be released to Taluk and Zilla

Panchayaths. It is essential to release required funds to Agriculture and

Horticulture Departments in advance. Under these circumstances, the

Government and PRIs have to reserve funds and release as per requirement

of specific schemes. In respect of schemes wherein Plan grant is less than

Rupees one crore, the release may be in two installments. If the grant

amount exceeds one crore rupees, the same may be released in three or four

installments. (15.3)

30.16 The Commission recommends that Chief Executive Officer of ZP

should have the power to reappropriate upto 10 percent of grants estimated

to remain as unspent, from one sub-head to another sub-head within the

same Major Head of Account. Likewise, he should have powers to

reappropriate upto 10 percent of funds from one Major Head of Account to

another Major Head with the prior approval of the Government or the Zilla

Panchayath. (15.4)

30.17 Many Secretaries to Government and Heads of Line Departments,

during their interaction with the Commission, have said that owing to delay

in according approval to the Annual Action Plan by the Zilla Panchayaths

and delay in getting clearance from Standing Committees in purchase

matters, scheme implementation gets delayed. This is a serious issue. As

such, PRIs have to function in accrodance with their business rules. (15.5)

30.18 Concerned Officers of Zilla Panchayats and Taluk Panchayats have

to take swift action to get the Action Plans approved early. Panchayat

Budget and Accounts Rules and Business Rules have to be strictly adhered

to. In case of any impediment or delay in this regard, the Chief Executive

Officer has to send a report to the Government and the concerned


C H A P T E R - 3 0

authorities have to be directed to take necessary action. Action has to be

initiated against the officers/authorities who cause such an impediment or

delay. (15.6)

30.19 All works wherein the estimated cost of each work is Rs.25,000/- or

more, have to be treated as a package and the works may be got executed

through the Zilla Panchayath Engineering Division or the Karnataka Land

Army or Nirmithi Kendra on Deposit Contribution system, without any

ETP Charges. The Executive Officers of Taluk Panchayats have to

personally inspect such works and certify about the quality. In order to

effectively stabilize this system, it is necessary that the Government

introduce the Work Audit System. (15.7)

30.20 Out of the Plan Grants made available to the Zilla Panchayats and

Taluk Panchayats, amounts upto 25 percent may be reserved for “Special

Needs” and the Government may direct these bodies to utilise the same as

per their Special Action Plans. Initially, the Government may earmark 10

percent of the Plan grants as per the Link Document for the “Special Needs

Programme”. Based on its success and considering the utility aspect, the

earmarking may be enhanced to 25 percent. The Commission recommends

accordingly. (15.8)

Cadre and Recruitment Rules for Rural Development and Panchayat Raj Department – A Necessity (Chapter-17)

Secretary and Staff of Grama Panchayats

30.21 The secretaries working in GPs are not competent enough to carry

out assigned duties and responsibilities. Government has initiated

necessary action for upgrading these posts to the grade of Deputy Tahsildar

and appointing Development Officers. It is necessary to fill up these posts

through direct recruitment and impart training on urgent basis. It is


C H A P T E R - 3 0

necessary, the selected officers are trained in computer and skill

development. (17.3)

30.22 Bill Collectors and other staff working in GPs have minimum

educational qualification and are not trained. Most of them do not possess

the necessary knowledge and perception of development as well as

administrative skills. From earlier days they are appointed on a daily wage

basis and are given consolidated salary. Due to this they are not evincing

interest and perform their efficiently. The Commission recommends that

the government should take note of this issue urgently. (17.4)

Extension Officers

30.23 The necessity is felt for various Extension Officers like existing

earlier to guide and work in gram panchayats at hobli or taluk level. The

government must incorporate these posts in the Cadre and Recruitment

Rules. The Development Officer of a gram panchayat on promotion be made

eligible for the post of Field Extension Officer. (17.5)

Field Extension Officer

30.24 There is a necessity of Filed Extension Officer at the taluk level. In

order to supervise, monitor and evaluate gram panchayats’ activities as well

as to oversee the effective implementation of various government schemes.

The post of Field Extension Officer should be included in the Cadre and

Recruitment Rules. They can supervise the duties of development Officer of

a Gram Panchayat and can work under Taluk Executive Officer. (17.6)

30.25 The post of Chief Executive officer can be filled up from the senior

level officer of Rural Development or Indian Administrative Service or

Karnataka Administrative Service cadre. There is a necessity of separate

Directorate and the Commissioner can be appointed from the IAS cadre in

the level of Secretary to Government. Rules may be framed for promoting


C H A P T E R - 3 0

officers from different categories for filling the posts like Parishad

Secretary, Assistant and Deputy Secretary, Director and other posts. (17.7)

30.26 It is appropriate to appoint a Commissioner of the level of Secretary

to Government for Rural Development Department. Senior Grade Officers

may be promoted and posted as Additional Commissioner and Joint

commissioner to assist the Commissioner. It is necessary for the Directorate

to check the accounts of panchayat raj institutions and directly supervise

and monitor the performance, followup action required legally. (17.9)

30.27 The details of the field activities of various departments should be

brought under the Directorate. It is the opinion of the Commission that it is

possible for the officers at the secretariat level to effectively examine and

review the policies of the Government. (17.10)

Introduction of Ombudsman (Chapter-18)

30.28 It is imperative that system of Ombudsman is introduced in

Karnataka having jurisdiction over the Panchayat Raj Institutions and

Urban Local Bodies. The following points may be considered in the

proposed ombudsman system:

1. Regional Commissioner may be appointed as Ombudsman at the

divisional level. He can look into the matters of zilla panchayats, city

municipal councils and city corporations.

2. Deputy Commissioner may be appointed as Ombudsman at the district

level. He may be entrusted with matters pertaining to taluk

panchayats and Town Municipal Councils.

3. Assistant Commissioner may be appointed at the taluk level to oversee

the matters relating to Gram Panchayats and Town Panchayats.

4. Ombudsman should work independently.


C H A P T E R - 3 0

5. Ombudsman should be given powers of tribunal.

6. Ombudsman should be assisted by a team comprising of

administrative, accounts and technical staff.

7. His duties should be specific. Required funds should be made

available.

8. Procedures and systems should be developed to carryout decisions of

Ombudsman.

Public Awareness, People’s Participation and Citizens Charter (Chapter – 19)

30.29 Democratic administrative system is based on the principle of

government by the People, of the people and for the people. A clear

understanding of the local body’s functioning and benefits is necessary.

Public has to be educated about the benefits and plan implementation

process of these bodies. Hence, the Commission recommends that a public

awareness campaign be taken up on the following aspects:

1. The Constitution, functions and working methods of Panchayat raj

institutions and urban local bodies.

2. The objectives of Central and State Government schemes,

guidelines, grants and programme implementation.

3. Benefits available under various schemes/programmes,

identification and selection of beneficiaries and decisions there of.

4. Details of works taken up, release of grants, and utilisation under

Central and State Government schemes.

5. Finances, maintenance of accounts, Audit and expenditure

particulars etc. of local bodies.


C H A P T E R - 3 0

6. Suggestions, instructions and orders of higher authorities and the

government.

7. Action plan details and time table for implementation.

8. Budget details and Annual receipt and expenditure statement.

9. Guidelines and procedures for different schemes implemented by

local institutions.

10. Annual Plan target and achievement.

30.30 Public awareness should be created through Grama Sabha and Ward

Sabha, Sign Boards, Pamphlets and media advertising. Awareness

programmes have to be organised involving local associations, Self Help

Groups, Non- Governmental Organisations and citizen forums. For the

effective implementation of this programme, the Commission recommends

that a separate head of account be created by the Government and funds

are released along with suitable instructions. (19.3)

Implementation of Citizens Charter (19.5)

30.31 The Commission recommends that, citizens’ charters for Panchayat

Raj institutions and other Urban Local Bodies should be published and the

following subjects and methods be incorporated:

1. Schemes and programmes likely to be implemented by a local body

in the current year.

2. Finances available for the current year

3. Benefits provided by different departments under Panchayat Raj

4. Preparation and implementation of Action plan of the local body.

5. Measures to be taken regarding Action plan.


C H A P T E R - 3 0

6. Every month, on a specified day (every third Saturday) the elected

representatives of the respective constituency should be invited for

citizens meet the programme and obtain suggestions and opinions.

7. Follow up action should be initiated as per the discussions held in

such meetings.

8. Programme list of such meetings should be prepared and published in

advance to enable the general public to participate.

9. If possible, MLAs and MPs of the constituency should be invited as

special invitees.

10. Senior officers concerned should actively participate in such

meetings.

Effective Supervision and Monitoring of Activities of Panchayat Raj Institutions – A Necessity (Chapter – 20)

30.32 Commission has noticed that in the present system, effective

supervision and monitoring is not being done. The following measures are

recommended for correcting the errors;

1. All the financial transactions should be brought to the notice of

Accounts Superintendent of TP on the same or on the next day.

2. Accounts Superintendent should verify the accounts and cases of

unclear and doubtful nature should immediately be brought to the

notice of Executive Officer of TP.

3. The Executive Officer of TP should depute a responsible officer to the

GP for verification and reporting the same to him.

4. Based on the report of this officer, further necessary action should be

initiated. Cases of serious irregularities and misuse of funds are to be


C H A P T E R - 3 0

brought to the notice of the Chief Executive Officer and Chief

Accounts Officer of the Zilla Panchayat.

5. The Executive Officer and the Accounts Officer of the Taluk

Panchayat should take up periodical review of such cases and send an

action taken report to the ZP CEO and CAO.

6. The EO of the TP, along with his accounts and technical staff, should

visit at least ten GPs every month, inspect works and check the

accounts. Observations should be recorded in the GP registers.

Inspection notes should be regularly consolidated and follow up action

should be taken.

7. The CEO and CAO of the ZP should visit the TP offices every month

and review this.

8. All these issues should be monitored at the ZP level.

9. If necessary, reports may be sent to the Government.

30.33 The Commission is of the view that a “Task Force” under each TP

may be constituted to oversee the activities of GPs and GP accounts. (20.8)

Recommendations of Commission with respect to Urban Local Bodies (Chapter – 21)

Housing

30.34 Slums are increasing as there is no proportionate housing facility for

urban migrants. Housing problem is increasing day by day due to growth in

urban population and migration. Hence, there should be planned growth of

towns and it is essential to increase housing facilities. Lack of proper living

space for the migrant labourers has forced them to live in slums. In view of

this, unauthorised slums are mushrooming in cities. To solve this problem

ULBs should construct multistoried buildings in a planned way. These


C H A P T E R - 3 0

buildings should be self reliant units with all the required facilities. The

Government should take the requisite measures to stop growth of slums.

(21.15)

Drinking water

30.35 Faulty distribution of water supply is creating scarcity of water. In

this direction, it is necessary that lakes are protected and maintained. Rain

water harvesting seems to be a better alternate system. Installing water

meters is essential for proper use of water. Stringent action against

unauthorised as well as unlawful use of water is inevitable. (21.16)

Street Light

30.36 In view of shortage of electricity, use of alternate sources of energy

is apt. The use of solar energy for street lighting is the most possible

effective way. It is worth while thinking about harvesting wind power

energy for street lighting. (21.17)

Underground drainage

30.37 Even now many towns in the State do not have underground

sewerage system. The Government should give additional grants to provide

under ground drainage to all the urban areas. (21.18)

Solid Waste Management

30.38 It is very essential to implement solid waste management system in

urban areas. Many urban areas have shown the possibility of adopting

advanced scientific methods for solid waste management. It is to be noted

that Solid waste management is not being done properly in Karnataka.

Prescribed guidelines should be adhered to, in order to achieve better

standards in solid waste management. (21.19)


C H A P T E R - 3 0

Public Toilets

30.39 It is not necessary to point out that public toilets are very essential

in ever growing urban areas. Every day people from other places visit

urban areas for different purposes. For such people and women in

particular, toilets are essential. Even the existing toilets are not properly

cleaned. Now a days non governmental organisations are constructing ‘pay

and use’ toilets for public use. It is essential to encourage private

organisations to construct public toilets in important commercial centres

and bus stands. It is utmost essential to construct and maintain toilets in

public places. (21.20)

Bus Stand

30.40 It is observed that in many towns and cities buses are parked in the

middle of the road. Because of this, there is traffic congestion and

sometimes accidents also happen. It is very essential to construct Bus stand

at a convenient place. Fees could be collected from the bus owners for

maintenances of bus stand. (21.21)

Roads

30.41 In Karnataka State, many urban areas do not have well laid quality

internal roads. There are no drains on either side of the road. The roads in

urban areas become unusable very quickly because of high density of traffic.

Hence, it is necessary to lay good quality roads with scientific modern

technology. Drains on roadside should be laid on a priority basis to enable

the rain water to flow. It is necessary that the Government should devolve

additional funds for this purpose. (21.22)

Shortage staff

30.42 Shortage of administrative and technical staff is extensive in ULBs.

In many ULBs sanctioned posts are not filled. Since 2-3 years, the devolved


C H A P T E R - 3 0

grants have not been utilised because of shortage of technical staff.

Consequently, almost all the works are stagnant. Other than this, many of

the sanctioned posts in other category are still vacant. As a result, day to

day developmental works are affected. Hence all these posts need to be filled

up. (21.23)

Bruhat Bangalore Mahanagara Palike (Chapter-22)

Parking Facility

30.43 There are about 28 lakh vehicles in the jurisdiction of Bruhat

Bangalore Mahanagara Palike. Providing Parking facility is one of the

biggest problems faced by BBMP. The only solution to this problem lies in

creating underground / multi level parking facility in all important areas.

The Commission recommends that special grants be made available for the

BBMP for underground / Multi level parking wherein 500 to 1000 vehicles

can be parked at a time. (22.12)

Footpath Clearance

30.44 Lot of inconvenience is caused to pedestrians because of footpath

encroachment by small vendors, hawkers, petty shopkeepers etc. Hence,

stringent measures are inevitable. For whatever reason, if this sorry state

of affairs is allowed to continue, it would be a black mark on the garden city

of Bangalore. There is an urgent need to clear the footpaths and shift

footpath vendors to an earmarked place in the respective areas. The

Commission suggests that the Bangalore Mahanagara Palike should look

into the matter in all earnestness. (22.13)

30.45 There is a need to prevent parking of vehicles on road side. Revenue

could be generated by levying penalty on vehicles illegally parked on road

side. There is an urgent need to provide basic amenities to citizens by


C H A P T E R - 3 0

utilising funds as well as discretionary grants of both Central and State

Governments. ( 22.14)

Slum Clearance

30.46 One of the functions of urban local bodies is slum clearance. This

programme has to be successfully implemented. It is very essential to look

into slum problems from the angle cited below: (22.15)

1) Slums which are in existence for more than 20 years on:

a) Government land

b) Land belonging to the ULB

c) Private land

2) Slums created recently on encroached land:

a) Government land

b) land belonging to the ULB

c) Private land

d) Other land

30.47 Land wherein slum dwellers have been living for over 20 years

should be acquired by the government and transferred to ULBs. The exact

figure regarding the families living in such places should be arrived at.

Multistoried buildings should be constructed in such places. Such

multistoried buildings should be able to accommodate four times the

number of families presently living there. The basements of such buildings

should be used for vehicle parking and shops and the income from these

should be used for building maintenance. Houses on the first floor should be

auctioned to the general public and the income from the same should be

used for construction of the building. Either single or double bed room

houses should be built in the remaining floors / storeys and distributed to

the families of the slum dwellers on priority basis. Slum dwellers who have


C H A P T E R - 3 0

encroached upon recently could also be allotted the remaining houses in

the other floors. Basic infrastructure should be provided under other

schemes like JNNURM etc. (22.16)

30.48 In case it is not possible to provide houses for those slum dwellers in

the place where they are living they may be provided houses in a nearby

place as mentioned above. (22.17)

30.49 In future, strict vigil should be kept so that no new slums come up

for any reason whatsoever. One should not be officially allowed to put up

huts. If such a thing happens it should be reckoned as an offence. ULBs

should be given strict instructions not to allow new huts (slums). Concerned

officials should be held responsible for any lapses. Construction of houses

for slum dwellers should be taken up on priority and to be completed within

a stipulated time. The Government should issue necessary orders to ULBs

in this regard and activate them. (22.18)

Additional Special Grants to Sports and Youth Services Department (Chapter-29)

30.50 Programmes could not be held effectively since funds allotted to the

department are insufficient. Around 42 percent of State’s population

constitute youths. It is necessary to formulate programmes for their all

round development. Youths are the wealth of our nation. Their

development should take place according to their positive mental attitude.

It is necessary to control and stop untoward incidences that have occurred

recently. Providing following additional funds is the responsibility of state

and the department to ensure human development; (29.22)

• It is necessary to create posts of taluk level officers for all the 176

taluks of the state.


C H A P T E R - 3 0

• Services of volunteers could be utilized for co-ordination at the village

and hobli levels with taluk level officers and youth associations. Such

volunteers may be paid honorarium.

• Karnataka Youth Authority: It is necessary to create Karnataka

Youth Authority for the all round development of youths with

government aid and sponsors in order to organize more and more

programmes.

• Youth Self Help Groups: It is necessary to form youth self help

groups in rural areas so that youths can also be involved in self

employment.

• Mobile Youth Training Programme: Mobile youth training

programmes could be taken up in selected villages of 29 districts of

the state to create awareness among the youths about personality

development, responsibilities of youths and usefulness of self

employment.

• A maximum grant of Rs.10,000 could be provided to organize

programmes at village level covering sanitation, health checkup,

cultural and folk sports.

• In order to safeguard and promote rural arts, folk arts training and

folk sports meets should be organized at taluk and district levels. A

maximum of Rs.1.00 lakh grant should be given for construction of

youth association buildings.

• In order to safeguard and promote folk arts, a maximum of Rs.2.00

lakh grants should given for conducting folk arts training

programmes.


C H A P T E R - 3 0

• To take up youth development programmes at village, hobli, taluk

and district levels a minimum of Rs.1.00 crore should be provided in

ZP budget.

Recommendations of Commission with respect to Devolution of Funds (Chapter-28)

A Separate Devolution Component for Salaries

30.51 The Commission is of the view that it would be inappropriate and

unreasonable to use any indicators and weightages to determine the share

of PRIs to pay salaries and arrears of pay. In view of this situation,

Commission recommends that the salary component of officials working in

the PRIs should be de-linked while working out the total share of PRIs and

ULBs. (28.13)

30.52 Keeping in mind, the commitment of State Government towards

payment of pensions, interests, debt servicing and other committed

expenditure and also its revenue sources from Central Government, public

debt and borrowings, the Commission recommends that 33 percent of Net

Own Revenue Receipts of state should be distributed to PRIs [Component-

B] and ULBs [Component-C]. (28.16)

30.53 The relative shares of PRIs and ULBs would be in the ratio 70:30

out of 33 percent of Net Own Revenue Receipts of the state. In other words,

23 percent of Net Own Revenue Receipts of the state is the share PRIs and

10 percent of Net Own Revenue Receipts of the state is the share of ULBs.

(28.19)

30.54 The Commission has taken note of the fact that the statutory

development grants distributed

is grossly inadequate and

distribution of these grants at

Box ♦ Category I : Population Below 4000 [14%] ♦ Category II : Population 4001 to 8000 [71%] ♦ Category III : Population Above 8000 [15%]


C H A P T E R - 3 0

a flat rate per GP is also inappropriate. Selection of indicators and applying

weightages thereon for determination of share of each Grama Panchayat

would be cumbersome. Instead, the Commission recommends the following

pattern of distribution for statutory development grants to GPs:

First - based on population as shown in Box,

Second- the Commission has noted the disparities prevailing

across the regions of the State and on this issue the

findings and recommendations of

Dr.D.M.Nanjundappa’s Committee Report are

contemplated to recommend additional statutory

development grants.

Third - a “fiscal responsibility” based “incentive grant” for the

better performing GPs. (28.23)

Statutory Development Grants

30.55 Commission recommends distribution of statutory development

grants to the above three categories of GPs in the following manner;

(28.24)

Category I : Rupees 9.00 lakhs per GP per year

Category II : Rupees 12.00 lakhs per GP per year

Category III : Rupees 15.00 lakhs per GP per year

30.56 Commission recommends that the existing exclusive grant given to

GPs for maintenance of water supply schemes under Head of Account 2215

should be merged with the above pattern of distribution. (28.25)

Additional Statutory Development Grants for Relatively Backward GPs: (28.26)

30.57 The Commission is of the view that, the GPs located in backward

regions of the state should be given special consideration.


C H A P T E R - 3 0

30.58 Commission recommends distribution of an additional amount over

and above the Statutory Development Grants to the GPs located in three

categories of backward talukas in the following manner:

♦ All GPs located in ‘Backward Taluks’: Rs. 1.00 lakh per GP per year

♦ All GPs located in ‘More Backward Taluks’: Rs. 2.00 lakh per GP per year

♦ All GPs located in ‘Most Backward Taluks’: Rs. 3.00 lakhs per GP per year

Incentive Grants for Grama Panchayats (28.29, 28.31)

30.59 The Commission recommends that an incentive scheme for GPs

should be drawn up based on their performance in fiscal responsibility and

other functions. The Commission recommends that an amount of Rs.3.00

lakhs should be given as ‘incentive grant’ to a Grama Panchayat every year.

30.60 Every year an amount of Rs.50.00 crores should be set apart as

Incentive Grant. If more GPs perform, state government should provide the

requisite funds.

Programme/Scheme Obligated Distribution of Funds (28.35)

30.61 Commission has taken utmost care while suggesting the pattern for

determining the shares of each ZP, TP and GP. The Commission is of the

opinion that it is necessary to

adopt indicators and apply

weightages thereon to

determine the relative shares of

each ZP, TP and GP. Instead of

adopting indicators and

weightages to each GP, for the

sake of convenience the shares

of each GP will have to be determined based on the taluk or district level

indicators. The criteria alongwith weightages for determination of financial

shares of each ZP, TP and GP are given in Box.

Box Criteria for Determination of Financial

Share of each ZP, TP and GP

Sl. No.


1 Rural Population 40 2 Geographical Area 40


10

4 Illiterates 10


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Interse Distribution of Funds to Urban Local Bodies (28.41)

30.62 Making 100 percent Global Level Protection for payment of salaries

and pension contribution for lower level ULBs and not providing 100

percent protection to

higher level ULBs may

lead to discrimination,

although the lower level of

ULBs require more

support of the state

government. As such, the

Commission recommends

100 percent neutralization of salary and pension components of all the

ULBs including the Bruhat Bangalore Mahanagara Palike and City

Corporations. The Commission recommends continuation of Global

Protection and Global Provision. Upfront earmarking of funds to these

items should not exceed 60% of the total devolution to the ULBs. The

balance amount should be distributed as SFC grants to all the ULBs based

on the criteria as suggested in Box.

Box Criteria for Determination of Financial

Share of each ULB

Sl. No.


1 Population 40 2 Geographical Area 20


20

4 Illiterates 20

30.63 Commission recommends continuance of present system of

assignment and appropriation of taxes, duties, fees and tolls to PRIs and

ULBs. (28.47)

30.64 The Commission recommends “Block Untied Grants” to the ZPs and

TPs from the State Consolidated Fund based on population for ZPs and

based on categories as identified by Dr.D.M. Nanjundappa Committee on

Redressal of Regional Imbalances to TPs. The details are shown in the

following tables: (28.49)


C H A P T E R - 3 0

Block Untied Grants to Zilla Panchayats from the State Consolidated Fund

Category Rural Population No. of

ZPs Block Untied

Grants (Rs.Crores)

Total Financial

Implications (Rs.Crores)

I < 10 lakhs 13 5.00 65.00 II >10 and <20 lakhs 13 7.50 97.50 III >20 lakhs 3 10.00 30.00

Total 29 192.50

Block Untied Grants to Taluk Panchayats from the State Consolidated Fund

Category No. of

TPs Block Untied

Grants (Rs.Crores)

Total Financial Implications (Rs.Crores)

Most Backward 39 4.00 156.00 More Backward 40 3.00 120.00

Backward 35 2.00 70.00 Other 62 1.00 62.00 Total 176 408.00

Sri A.G. Kodgi B.Sc. LL.B Chairman

Sri. T. Thimmegowda M.A. (Economics) IAS (Retd.)

Member

Dr. Mahendra S.Kanthi Ph.D.[U of K – USA/Economics]

Member


Annexures

Annexure-1

Government Notification constituting Third State Finance Commission


320


321

Annexure - 2(A)

Extension of Term given to Third State Finance Commission (upto June, 30th 2008)


322

Annexure - 2 (B)

Extension of Term given to Third State Finance Commission (upto December, 31st 2008)


323

Annexure - 3

Extracts from the Karnataka Panchayat Raj Act, 1993 (Section 267) relating to setting up of State Finance Commission

Finance Commission:

1. The Government shall as soon as may be within one year from the date of

commencement of this Act and thereafter at the expiration of every fifth

year constitute a Finance Commission to review the financial position of

the Zilla Panchayats, Taluk Panchayats and Grama Panchayats and to

make recommendation to the Government as to:

(a) the principles which should govern:-

(i) the distribution between the State and the Zilla Panchayats, Taluk

Panchayats and Grama Panchayats and the net proceeds of the taxes,

duties, tolls and fees leviable by the Government which may be divided

between them and allocation between the Zilla Panchayats, Taluk

Panchayats and Grama Panchayats of their respective shares of such

proceeds;

(ii) the determination of the taxes, duties, tolls and fees which may be

assigned to or appropriated by the Zilla Panchayats, Taluk Panchayats

and Grama Panchayats;

(iii) the grants-in-aid to the Zilla Panchayat, Taluk Panchayats and

Grama Panchayats from the Consolidated Fund of the State;

(b) the measures needed to improve the financial position of the Zilla

Panchayats, Taluk Panchayats and Grama Panchayts;

(c) any other matter referred to the Finance Commission by the Governor in

the interest of sound finance of the Zilla Panchayats, Taluk Panchayats

and Grama Panchayats.


324

2. Finance Commission shall consist of a Chairman and two other members.

3. The Chairman and members of Finance Commission shall possess such

qualification and shall be appointed in such manner as may be prescribed.

4. The Finance Commission shall determine its procedure.

5. The Chairman or a member of the Finance Commission may resign his

office by writing under his hand and addressed to the Finance Secretary to

the Government, but he shall continue in office until his resignation is

accepted by the Government.

6. The casual vacancy created by the resignation of the member or Chairman

under sub-section (5) or for any other reason may be filled by fresh

appointment and a member or Chairman so appointed shall hold office for

the remaining period for which the member or Chairman in whose place

he was appointed would have held office.

7. The Commission shall have the following powers in the performance of its

functions namely:-

(a) to call for any record from any officer or authority;

(b) to summon any person to give evidence or produce records; and

(c) such other power as may be prescribed.

8. The Governor shall cause every recommendation made by the Finance

Commission under this section together with an explanatory

memorandum as to the action taken thereon to be laid before both the

Houses of the State Legislature.


325

Annexure - 4

Extracts from the Karnataka Municipalities Act, 1964 relating to setting up of State Finance Commission

Finance Commission:

1. The Finance Commission constituted under Section 267 of the Karnataka

Panchayat Raj Act, 1993 shall also review the financial position of the

Municipal Councils and Town Panchayats and make recommendations to

the Governor as to:-

(a) the principle which should govern:-

(i) the distribution between the State and Municipal Councils and Town

Panchayats of the net proceeds of the taxes, duties, tolls and fees leviable

by the Government which may be divided between them and allocation

between the Municipal Councils and Town Panchayats their respective

shares of such proceeds;

(ii) the determination of the taxes, duties, tolls and fees which may be

assigned to or appropriated by the Municipal Councils and Town

Panchayats;

(iii) the grants-in-aid to the Municipal Councils and Town Panchayats

from the Consolidated Fund of the State;

(b) the measures needed to improve the financial position of the Municipal

Councils and Town Panchayats;

(c) any other matter referred to the Finance Commission by the Governor in

the interest of sound finance of the Municipal Councils and Town

Panchayats.

2. The Governor shall cause every recommendation made by the Finance

Commission under this section together with an explanatory

memorandum as to the action taken thereon to be laid before both the

Houses of the State Legislature.


326

Annexure - 5

73rd Constitutional Amendment Act 1992

243. In this Part, unless the context otherwise requires:-

(a) “district” means a district in a State; (b) “Gram Sabha” means a body consisting of persons registered in the

electroral rolls relating to a village comprised within the area of Panchayat at the village level;

(c) “intermediate level” means a level between the village and district levels

specified by the Governor of a State by public notification to be the intermediate level for the purposes of this Part;

(d) “Panchayat” means an institution (by whatever name called) of Self

Government constituted under article 243B, for the rural areas; (e) “Panchayat area” means the territorial area of a Panchayat. (f) “Population” means the population as ascertained at the last preceding

census of which the relevant figures have been published. (g) “village” means a village specified by the Governor by public notification to

be a village for the purposes of this Part and includes a group of villages so specified.

243A - A Gram Sabha may exercise such powers and perform such functions at

the village level as the Legislature of a State may be by law, provide.

243B (1) There shall be constituted in every State, Panchayats at the village, intermediate and district levels in accordance with the provisions of this Part.

(2) Notwithstanding anything in clause (1), Panchayats at the intermediate level may not be constituted in a State having a population not exceeding twenty lakhs.

243C. (1) Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the composition of Panchayats;

Provided that the ratio between the population of the territorial area of a Panchayat at any level and the number of seats in such Panchayat to be filled by election shall, so far as practicable, be the same throughout the State.

(2) All the seats in a Panchayat shall be filled by persons chosen by direct election from territorial constituencies in the Panchayat area and; for this purpose, each Panchayat area shall be divided into


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territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it shall, so far as practicable, be the same throughout the Panchayat area. (3) The Legislature of a State may, by law, provide for the representation-

(a) of the Chairpersons of the Panchayats at the village level in the Panchayats at the intermediate level or, in the case of a State not having Panchayats at the intermediate level, in the Panchayats at the district level;

(b) of the Chairpersons of the Panchayats at the intermediate level, in the Panchayats at the district level;

(c) of the Members of the House of the People and the Members of the Legislative Assembly of the State representing constituencies which comprise wholly or partly a Panchayat area at a level other than the village level, in such Panchayat;

(d) of the Members of the Council of States and the Members of the Legislative Council of the State, where they are registered as electors within-

(i) a Panchayat area at the intermediate level, in Panchayat at the intermediate level

(ii) a Panchayat area at the district level, in Panchayat at the district level.

(4) The Chairperson of a Panchayat and other members of a Panchayat

whether or not chosen by direct election from territorial constituencies in the Panchayat area shall have the right to vote in the meetings of the Panchayats.

(5) The Chairperson of-

(a) a Panchayat at the village level shall be elected in such manner as the Legislature of a State may, by law, provide; and

(b) a Panchayat at the intermediate level or district level shall be elected by, and from amongst, the elected members thereof.

243D (1) Seats shall be reserved for-

(a) the Scheduled Castes; and (b) the Scheduled Tribes.

In every Panchayat and the number the seats so reserved shall bear, as

nearly as may be, the same proportion to the total number of seats to be filled by direct election in that Panchayat as the population of the Scheduled Castes in that Panchayat area or of the Scheduled Tribes in that Panchayat area bears to the total population of that area and such seats may be allotted by rotation to different constituencies in a Panchayat;


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(2) Not less than one-third of the total number of seats reserved under

clause (1) shall be reserved for women belonging to the Scheduled Castes or, as the case may be, the Scheduled Tribes.

(3) Not less than one-third (including the number of seats reserved for women belonging to the Scheduled Castes and the Scheduled Tribes) of the total number of seats to be filled by direct election in every Panchayat shall be reserved for women and such seats may be allotted by rotation to different constituencies in a Panchayat.

(4) The offices of the Chairpersons in the Panchayats at the village or any other level shall be reserved for the Scheduled Castes, the Scheduled Tribes and women in such manner as the Legislature of a State may, by law, provide:

Provided that the number of offices of Chairpersons reserved for the Scheduled Castes and the Scheduled Tribes in the Panchayats at each level in any State shall bear, as nearly as may be, the same proportion to the total number of such offices in the Panchayats at each level as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State bears to the total population of the State.

Provided further that not less than one-third of the total number of offices of Chairpersons in the Panchayats at each level shall be reserved for women: Provided also that the number of offices reserved under this clause shall be allotted by rotation to different Panchayats at each level.

(5) The reservation of seats under clauses (1) and (2) and the reservation

of offices of Chairpersons (other than the reservation for women) under clause (4) shall cease to have effect on the expiration of the period specified in article 334.

(6) Nothing in this Part shall prevent the Legislature of a State from making any provision for reservation of seats in any Panchayat or offices of Chairpersons in the Panchayats at any level in favour of backward class of citizens.

243E (1) Every Panchayat, unless sooner dissolved under any law for the

time being in force, shall continue for five years from the date appointed for its first meeting and no longer.

(2) No amendment of any law for the time being in force shall have

the effect of causing dissolution of a Panchayat at any level, which is functioning immediately before such amendment, till the expiration of its duration specified in clause (1),

(3) An election to constitute a Panchayat shall be completed- (a) before the expiry of its duration specified in clause (1); (b) before the expiration of a period of six months from the date of its

dissolution:


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Provided that where the remainder of the period for which the dissolved Panchayat would have continued is less than six months, it shall not be necessary to hold any election under this clause for constituting the Panchayat for such period. (4) A Panchayat constituted upon the dissolution of a Panchayat

before the expiration of its duration shall continue only for the remainder of the period for which the dissolved Panchayat would have continued under clause (1) had it not been so dissolved.

243F (1) A person shall be disqualified for being chosen as, and for being, a

member of a Panchayat-

(a) he is so disqualified by or under any law for the time being in force for the purposes of elections to the Legislature of the State concerned.

Provided that no person shall be disqualified on the ground that he is less than twenty-five years of age, if he has attained the age of twenty-one years;

(b) if he is so disqualified by or under any law made by the Legislature of the State.

(2) If any question arises as to whether a member of a Panchayat

has become subject to any of the disqualifications mentioned in clause(1), the question shall be referred for the decision of such authority and in such manner as the Legislature of a State may, by law, provide.

243G Subject to the provisions of this Constitution, the Legislature of a

State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of Self-Government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to-

(a) the preparation of plans for economic development and social

justice; (b) the implementation of schemes for economic development and

social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.

243H The Legislature of a State may, by law,-

(a) authorize a Panchayat to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits;


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(b) assign to a Panchayat such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits.

(c) Provide for making such grants-in-aid to the Panchayats from the Consolidated Fund of the State; and

(d) Provide for constitution of such Funds for crediting all moneys received, respectively, by or on behalf of the Panchayats and also for the withdrawal of such moneys therefrom,

as may be specified in the law.

243I(I) (1) The Governor of a State shall, as soon as may be within one year from the commencement of the Constitution (Seventy-third Amendment) Act 1992, and thereafter at the expiration of every fifth year, constitute a Finance Commission to review the financial position of the Panchayats and to make recommendations to the Governor as to-

(a) the principles which should govern- (i) the distribution between the State and the Panchayats of the

net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Panchayats at all levels of their respective shares of such proceeds;

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

(iii) the grants-in-aid to the Panchayats from the Consolidated Fund of the State;

(b) the measures needed to improve the financial position of the Panchayats;

(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Panchayats.

(2) The Legislature of a State may, by law, provided for the composition,

of the Commission, the qualifications which shall be requisite for appointment as members thereof and the manner in which they shall be selected.

(3) The Commission shall determine their procedure and shall have such powers in the performance of their functions as the Legislature of the State may, by law, confer on them.

(4) The Governor shall cause every recommendations made by the Commission under this article together, with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.

243J The Legislature of a State may, by law, make provisions with respect

to the maintenance of accounts by the Panchayats and the auditing of such accounts.


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243K (1) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Panchayats shall be vested in a State Election Commission consisting of a State Election Commissioner to be appointed by the Governor.

(2) Subject to the provisions of any law made by the Legislature of a

State, the conditions of service and tenure of office of the State Election Commissioner shall be such as the Governor may by rule determine;

Provided that the State Election Commissioner shall not be removed from his office except in like manner and on the like grounds as a Judge of a High Court and the conditions of service of the State Election Commissioner shall not be varied to his disadvantage after his appointment.

(3) The Governor of a State shall, when so requested by the State Election Commission, make available to the State Election Commission such staff as may be necessary for the discharge of the functions conferred on the State Election Commission by clause (1).

(4) Subject to the provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Panchayats.

243L The Provisions of this Part shall apply to the Union territories and

shall, in their application to a Union territory, have effect as if the references to the Governor of a State were references to the Administrator of the Union territory appointed under article 239 and references to the Legislature or the Legislature Assembly of a State were references, in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly.

Provided that the President may, by public notification, direct that the provisions of this Part shall apply to any Union territory or part thereof subject to such exceptions and modifications as he may specify in the notification. 243M (1) Nothing in this Part shall apply to the Scheduled Areas referred

to in clause (1), and the tribal areas referred to in clause (2) of article 244. (2) Nothing in this Part, shall apply to-

(a) the States of Nagaland, Meghalaya and Mizoram; (b) the hill areas in the State of Manipur for which District Councils exist under any law for the time being in force.

(3) Nothing in this part- (a) relating to Panchayats at the District level shall apply to the hill areas of the District of Darjeeling in the State of West Bengal for which Darjeeling, Gorkha hill council exist under any law for the time being in force;


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(b) Shall be construed to affect the functions and powers of the Darjeeling Gorkha hill council constituted under such law.

(4) Notwithstanding anything in this constitution,- (a) The legislature of a State referred to in sub-clause (a) of

clause (2) may, by law, extend this Part, to that State, except the areas, if any, referred to in Clause (1), if the legislative assembly of that State passes a resolution to that effect by a majority of the total membership of that house and by a majority of not less than two-thirds of the members of that House present and voting;

(b) Parliament may, by law, extend the provisions of this part to the Scheduled Areas and the tribal areas referred to in clause (1) subject to such exceptions and modifications as may be specified in such law, and no such law be deemed to be an amendment of this Constitution for the purpose of article 368.

243N Notwithstanding anything in this Part, any provision of any law relating

to Panchayats in force in a State immediately before the commencement of the Constitution (Seventy-third Amendment) Act, 1992 which is inconsistent with the Provisions of this part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is earlier;

Provided that all the Panchayats existing immediately before such

commencement shall continue till the expiration of their duration unless sooner dissolved by a resolution passed to that effect by the Legislative Assembly of that State or, in the case of a State having a Legislative Council, by each House of the Legislature of that State. 243O Notwithstanding anything in this Constitution,-

(a) The validity of any law relating to the delimitation of Constituencies or the allotment of seats to such constituencies made or purporting to be made under Article 243K, shall not be called in question in any Court;

(b) No election to any Panchayat shall be called in question except in an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State.


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Annexure - 6

74th Constitutional Amendment Act 1992 243P In this part, unless the context otherwise requires,-

(a) “Committee” means a Committee constituted under Article 243S; (b) “district” means a district in a State; (c) “Metropolitan Area” means an area having a population of ten

lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by Public notification to be a metropolitan area for the purposes of this Part;

(d) “Municipal area” means the territorial area of a Municipality as is notified by the Governor;

(e) “Municipality” means an institution of Self-Government constituted under Article 243Q;

(f) “Panchayat” means a Panchayat constituted under Article 243B; (g) “Population” means the Population as ascertained at the last

preceeding census of which the relevant figures have been published.

243Q (1) There shall be constituted in every State,-

(a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area;

(b) a Municipal Council for a smaller urban area; and (c) a Municipal Corporation for a larger urban area, in accordance

with the provisions of this Part; Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the Municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deemed fit, by public notification, specify to be an industrial township.

(2) In this article, ‘a transititional area’, ‘a smaller urban area’ or ‘a larger urban area’ means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non –agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part.

243R. (1) Save as provided in clause (2),


334

all the seats in a Municipality shall be filled by persons chosen by direct election from the territorial constituencies in the Municipal area and for this purpose each Municipal area shall be divided into territorial constituencies to be known as wards.

(2) The legislature of a State, may, by law, provide- (a) for the representation in a Municipality of-

(i) persons having special knowledge or experience in local administration;

(ii) the Members of the House of the People and the Members of the Legislative Assembly of the State representing constituencies which comprise wholly or partly the Municipal area;

(iii) the Members of the Council of States and the Members of the Legislative Council of the State registered as electors within the

Municipal area; (iv) the Chairpersons of the Committees constituted under clause (5) of article 243(S) Provided that the persons referred to paragraph (i) shall not have the right to vote in the meetings of the Municipality;

(b) the manner of election of the chairperson of a Municipality. 243S (1) There shall be constituted Wards Committees, consisting of one

or more wards, within the territorial area of a Municipality having a population of three lakhs or more.

(2) The legislature of a State, may, by law, make provision with

respect to- (a) The composition and the territorial area of a Wards

Committee (b) The manner in which the seats in a wards committee shall be

filled. (3) A member of a Municipality representing a ward within the

territorial area of the wards committees shall be a member of that committee.

(4) Where a wards committee consists of- (a) one ward, the member representing that ward in the

Municipality; or (b) two or more wards, one of the members representing such wards

in the Municipality elected by the members of the wards committee, shall be the chairperson of that Committee.

(5) Nothing in this article shall be deemed to prevent the Legislature

of a State from making any provision for the constitution of Committees in addition to the Wards Committees.


335

243T (1) Seats shall be reserved for the Scheduled Castes and the Scheduled Tribes in every Municipality and the number of seats so reserved shall bear, as nearly as may be, the same proportion to the total number of seats to be filled by direct election in that Municipality as the population of the Schedule Castes in the Municipal area or of the Scheduled Tribes in the Municipal area bears to the total population of that area and such seats may be allotted by rotation to different constituencies in a Municipality.

(2) Not less than one-third of the total number of seats reserved under

clause (1) shall be reserved for women belonging to the Schedule Caste or, as the case may be, the Scheduled Tribes.

(3) Not less than one-third (including the number of seats) reserved for

women belonging to the Scheduled Castes and the Scheduled Tribes) of the total number of seats to be filled by direct election in every Municipality shall be reserved for women and such seats may be allotted by rotation to different constituencies in a Municipality.

(4) The Officers of chairpersons in the Municipalities shall be reserved

for the Scheduled Castes, the Scheduled Tribes and women in such manner as the legislature of a State, may, by law, provide.

(5) The reservation of seats under clauses (1) and (2) and the reservation

of officers of chairpersons (other than the reservation for women) under clause (4) shall cease to have effect on the expiration of the period specified in article 334.

(6) Nothing in this Part, shall prevent the Legislature of a State from

making any provision for reservation of seats in any Municipality or offices of Chairpersons in the Municipalities in favour of backward class of citizens.

243U (1) Every Municipality unless sooner dissolved under any law for the

time being in force, shall continue for five years from the date appointed for its first meeting and no longer;

Provided that a Municipality shall be given a reasonable opportunity of being heard before its dissolution.

(2) No amendment of any law for the time being in force shall have the effect of causing dissolution of a Municipality at any level, which is functioning immediately before such amendment, till the expiration of its duration specified in clause (1) (3) An election to constitute a Municipality shall be completed-

(a) Before the expiry of its duration specified in Clause (1);


336

(b) Before the expiration of a period of six months from the date of its dissolution;

Provided that where the reminder of the period for which the dissolved Municipality would have continued is less than six months, it shall not be necessary to hold any election under this clause for constituting the Municipality for such period.

(4) A Municipality constituted upon the dissolution of a Municipality before the expiration of its duration shall continued only for the reminder of the period for which the dissolved Municipality would have continued under clause (1) had it not been so dissolved.

243V (1) A person shall be disqualified for being chosen as, and for being, a

member of a Municipality- (a) if he is so disqualified by or under any law for the time being in force for the purposes of elections to the Legislature of the State concerned;

Provided that no person shall be disqualified on the ground that he is less than twenty-five years of age, if he has attained the age of twenty-one years;

(b) if he so disqualified by or under any law made by the Legislature of

the State. (2) If any question arises as to whether a member of a Municipality has

become subject to any of the disqualifications mentioned in clause (1), the question shall be referred for the decision of such authority and in such manner as the Legislature of a State may, by law, provide.

243W (1) Subject to the provisions of this Constitution, the Legislature of the

State may, by law, endow-

(a) The Municipalities with such powers and authority as may be necessary to enable them to function as institutions of Self-Government and such law may contain provisions for the devolution of powers and responsibilities of Municipalities, subject to such conditions as may be specified therein, with respect to-

(i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as

may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule.

(b) the Committees with such power and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule.


337

243X The Legislature of a State may, by law- (a) authorize a Municipality to levy, collect and appropriate such taxes,

duties, tolls and fees in accordance with such procedure and subject to such limits;

(b) assign to a Municipality such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits;

(c) provide for making such grants in aid to the Municipalities from the Consolidated Fund of the State; and

(d) provide for constitution of such funds for crediting all moneys received, respectively, by or on behalf of the Municipalities and also for the withdrawal of such money there from,

as may be specified in the law. 243Y (1) The Finance Commission constituted under article 243-I shall also

review the financial position of the Municipalities and make recommendations to the Governor as to-

(a) the principles which should govern-

(i) The distribution between the State and the Municipalities of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Municipalities at all levels of their respective shares of such proceeds; (ii) The determination of the taxes, duties, tolls and fees which may be assigned to or appropriated by the Municipalities; (iii)The grants in aid to the Municipalities from the consolidated fund of the State;

(b) the measures needed to improve the financial position of the Municipalities;

(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Municipalities.

(2) The Governor shall pass every recommendation made by the

Commission under this article together with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.

243Z The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the Municipalities and the auditing of such accounts. 243ZA(1) The Superintendence, direction and control of the preparation of

electroal rolls for, and the conduct of all election to the Municipalities shall be vested in the State Election Commission referred to in article 243K.

(2) Subject to the provisions of this Constitution, the Legislature of a

State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Municipalities.


338

243ZB The provisions of this Part shall apply to the Union Territories and shall, in their application to a Union Territory, have effect as if the references to the Governor of a State were references to the Administrator of the Union Territory appointed under Article 239 and references to the Legislature or the Legislative Assembly of a State were references in relation to a Union Territory having a Legislative Assembly, to that Legislative Assembly; Provided that the President may, by public notification, direct that the provisions of this Part, shall apply to any Union Territory or part thereof subject to such exceptions and modifications as he may specify in the Notification.

243ZC (1) Nothing in this Part shall apply to the Scheduled Areas referred to in

clause (1), and the tribal areas referred to in clause (2), of Article 244.

(2) Nothing in this Part shall be construed to affect the functions and

the powers of the Darjeeling Gorkha hill Council constituted under any law for the time being in force for the Hill areas of the District of Darjeeling in the State of West Bengal.

(3) Notwithstanding anything in this Constitution, Parliament may, by law, extend the provisions of this part to the scheduled areas and the tribal areas referred to in Clause (1) subject to such exceptions and modifications as may be specified in such law, and no such law shall be deemed to be an amendment of this Constitution for the purposes of Article 368.

243ZD (1) There shall be constituted in every State at the District level a District Planning Committee to consolidate the plans prepared by the Panchayats and the Municipalities in the District and to prepare a draft development plan for the District as a whole.

(2) The Legislature of a State may, by law, make provision with respect to-

(a) the composition of the District Planning Committees; (b) the manner in which the seats in such Committee shall be filled;

Provided that not less than four-fifths of the total number of members of such Committee shall be elected by, and from amongst, the elected members of the Panchayats at the District level and of the Municipalities in the District in proportion to the ratio between the population of the rural areas and of the urban areas in the District;

(c) the functions relating to District Planning which may be assigned to such Committees;


339

(d) the manner in which the chairpersons of such committees shall be chosen.

(3) every District Planning Committee shall, in preparing the draft development plan-

(a) have regard to- (i) matters of common interest between the Panchayats and the

Municipalities including spatial planning, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;

(ii) the extent and type of available resources whether financial or otherwise;

(b) consult such institutions and organizations as the Governor may, by order, specify.

(4) The chairperson of every District Planning Committee shall forward the development plan, as recommended by such Committee to the Government of the State.

243ZE (1) there shall be constituted in every Metropolitan area a Metropolitan

Planning Committee to prepare a draft development plan for the Metropolitan area as a whole.

(2) The Legislature of a State may, by law, make provisions with respect

to- (a) the composition of the Metropolitan Planning Committees; (b) the manner in which the seats in such Committees shall be filled;

Provided that not less than two-thirds of the members of such committee shall be elected by, and from amongst the elected members of the Municipalities and chairpersons of the Panchayats in the Metropolitan area in proportion to the ratio between the population of the Municipalities and of the Panchayats in that area;

(c) the representations in such Committees of the Government of India

and the Government of the State and of such organizations and institutions as may be deemed necessary for carrying out the functions assigned to such committees;

(d) the functions relating to planning and co-ordination for the

Metropolitan area which may be assigned to such Committee; (e) the manner in which the chairpersons of such committees shall be

chosen.

(3) Every Metropolitan Planning Committee shall, in preparing the draft development plan,-

(a) have regard to- (i) the plans prepared by the Municipalities and the Panchayats in the

Metropolitan Area;


340

(ii) matters of common interest between the Municipalities and the Panchayats, including co-ordinated spatial planning of the area, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;

(iii) the overall objectives and priorities set by the Government of India and the Government of the State;

(iv) the extent and nature of investments likely to be made in the Metropolitan area by agencies of the Government of India and of the Government of the State and other available resources whether financial or otherwise;

(b) consult such institutions and organizations as the Governor may, by order, specify

(4) The Chairperson of every Metropolitan Planning Committee shall forward the development plan, as recommended by such committee, to the Government of the State.

243ZF Notwithstanding anything in this Part, any provision of any law relating to

Municipalities in force in a State immediately before the commencement of the Constitution (Seventy-fourth Amendment) Act, 1992, which is inconsistent with the provisions of this Part, shall continued to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is earlier;

Provided that all the Municipalities existing immediately before such commencement shall continue till the expiration of their duration, unless sooner dissolved by a resolution passed to that effect by the Legislative Assembly of that State, or, in case of a State having a Legislative Council, by each House of the Legislature of that State.

243ZG Notwithstanding anything in this Constitution:-

(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243ZA shall not be called in question in any Court;

(b) no election to any Municipality shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State.


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Annexure - 7

Eleventh Schedule of the Constitution

[Article 243G] [Added by Constitution 73rd Amendment Act, 1992]

1. Agriculture, including agricultural extension 2. Land improvement, implementation of land reforms, land

consolidation and soil conservation. 3. Minor Irrigation, water management and watershed development 4. Animal husbandry, dairying and poultry. 5. Fisheries. 6. Social forestry and farm forestry. 7. Minor forest produce. 8. Small scale industries, including food processing industries. 9. Khadi, village and cottage industries. 10. Rural housing. 11. Drinking water 12. Fuel and fodder. 13. Roads, culverts, bridges, ferries, waterways and other means of

communication. 14. Rural electrification, including distribution of electricity. 15. Non-conventional energy sources. 16. Poverty alleviation programme. 17. Education, including primary and secondary schools. 18. Technical training and vocational education. 19. Adult and non-formal education. 20. Libraries. 21. Cultural activities 22. Markets and fairs. 23. Health and sanitation, including hospitals, primary health centres

and dispensaries. 24. Family welfare. 25. Women and child development. 26. Social welfare, including welfare of the handicapped and mentally

retarded. 27. Welfare of the weaker sections, and in particular, of the Scheduled

Castes and the Scheduled Tribes. 28. Public distribution system. 29. Maintenance of community assets.


342

Annexure - 8

Twelfth Schedule of the Constitution

[Article 243W] [Inserted by Constitution 74th Amendment Act, 1992]

1. Urban planning, including town planning.

2. Regulation of land-use and construction of buildings.

3. Planning for economic and social development.

4. Roads and bridges.

5. Water supply for domestic, industrial and commercial purposes.

6. Public health, sanitation, conservancy and solid waste management.

7. Fire services.

8. Urban forestry, protection of the environment and promotion of ecological aspects.

9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.

10. Slum improvement and upgradation.

11. Urban poverty alleviation.

12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.

13. Promotion of cultural, educational and aesthetic aspect.

14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.

15. Cattle ponds; prevention of cruelty to animals.

16. Vital statistics, including registration of births and deaths.

17. Public amenities, including street lighting, parking lots, bus stops and public conveniences.

18. Regulation of slaughter houses and tanneries.


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Annexure - 9

Schedule I of Karnataka Panchayat Raj Act 1993 (Functions assigned to GPs – Section 58)

SCHEDULE - I

I. General functions:

(1) Preparation of annual plans for the development of the Panchayat area.

(2) Preparation of annual budget.

(3) Providing relief in natural calamities.

(4) Removal of encroachments on public properties.

(5) Organizing voluntary labour and .contribution for community works.

(6) Maintenance of essential statistics of the villages.

II. Agriculture, including agricultural extension:

(1) Promotion and development of agriculture and horticulture.

(2) Development of waste lands.

(3) Development and maintenance of grazing lands and preventing their unauthorized alienation and use.

III. Animal husbandry, dairying and poultry:

(1) Improvement of breed of cattle, poultry and other live-stock.

(2) Promotion of dairy farming, poultry and piggery .

(3) Grassland development.

IV. Fisheries:

Development of fisheries in the villages.

V. Social and farm forestry, minor forest produce, fuel and fodder:

(1) Planting and preservation of trees on the sides of roads and other public lands under its control.

(2) Fuel plantations and fodder development.

(3) Promotion of farm forestry .

(4) Development of social forestry.

VI. Khadi village and cottage industries:

(1) Promotion of rural and cottage industries.

(2) Organisation of conferences, seminars and training programmes, agricultural and industrial exhibitions for the benefit of the rural areas.

VII. Rural housing:

(1) Distribution of house sites within Gramathana limits.

(2) Maintenance of records relating to the houses, sites and other private and public properties.

VIII. Drinking water:

(1) Construction, repairs and maintenance of drinking water wells, tanks and ponds.

(2) Prevention and control of water pollution.


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(3) Maintenance of rural water supply schemes.

IX. Roads, buildings, culverts, bridges, ferries, waterways and other means of communication

(1) Construction and maintenance of village roads, drains and culverts.

(2) Maintenance of buildings under its control or transferred to it by the Government or any public authority .

(3) Maintenance of boats, ferries and waterways

X. Rural electrification including distribution of electricity: Providing for and maintenance of lighting of public streets and other places.

XI. Non-conventional energy source:

(1) Promotion and development of non-conventional energy schemes.

(2) Maintenance of community non-conventional energy devices, including bio-gas plants.

(3) Propagation of improved chulhas and other efficient energy devices.

XII. Poverty alleviation programmes:

(1) Promotion of public awareness and participation in poverty alleviation programmes for fuller employment and creation of productive assets, etc.

(2) Selection of beneficiaries under various programmes through Grama Sabhas.

(3) Participation in effective implementation and monitoring.

XIII. Education, including primary and secondary schools:

(1) Promotion of public awareness and participation in primary and secondary education.

(2) Ensuring full enrollment and attendance in primary schools.

XIV. Adult and non-formal education:

Promotion of adult literacy

XV .Libraries:

Village libraries and reading rooms.

XVI. Cultural activities:

Promotion of social and cultural activities.-

XVII. Markets and fairs:

Regulation of fairs (including cattle fairs) and festivals.

XVIII. Rural sanitation:

(1) Maintenance of general sanitation.

(2) Cleaning of public roads, drains, tanks, wells and o ther public places.

(3) Maintenance and regulation of burning and burial grounds.

(4) Construction and maintenance of public latrines.

(5) Disposal of unclaimed corpses and carcasses.

(6) Management and control of washing and bathing ghats.

XIX. Public health and family welfare:

(1) Implementation of family welfare programmes.

(2) Prevention and remedial measures against epidemics

(3) Regulation of sale of meat, fish and other perishable food articles


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(4) Participation in programmes of human and animal vaccination

(5) Licensing of eating and entertainment establishments.

(6) Destruction of stray dogs.

(7) Regulation of curing, tanning and dyeing of skins and hides.

(8) Regulation of offensive and dangerous trades.

XX. Women and child development:

(1) Participation in the implementation of women and child welfare programmes.

(2) Promotion of school health and nutrition programmes.

XXI. Social welfare including welfare of the handicapped and mentally retarded:

(1) Participation in the implementation of the social welfare programmes, including welfare of the handicapped, mentally retarded and destitute.

(2) Monitoring of the old-age and widows pension schemes.

XXII. Welfare of the weaker sections and in particular the Scheduled Castes and Scheduled Tribes:

(1) Promotion of public awareness with regard to welfare of Scheduled Castes, Scheduled Tribes and other weaker sections.

(2) Participation in the implementation of the specific programmes for the welfare of the weaker sections.

XXIII. Public distribution system:

(1) Promotion of public awareness with regard to the distribution of essential commodities.

(2) Monitoring the public distribution system.-

XXIV. Maintenance of community assets:

(1) Maintenance of community assets.

(2) Preservation and maintenance of other community assets.

XXV. Construction and maintenance of dharmashala, chatras and similar institutions.

XXVI. Construction and maintenance of cattle sheds, pounds, cart and stands.

XXVII. Construction and maintenance of slaughter houses.

XXVIII. Maintenance of public parks, playgrounds, etc.

XXIX. Regulation of manure pits in public places.

XXX. Establishment and control of shandies.

XXXI. Such other functions as may be entrusted.


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Annexure - 10 Schedule II of Karnataka Panchayat Raj Act 1993 (Functions

assigned to TPs – Section 145)

SCHEDULE II I. General functions:

(1) Preparation of the annual plans in respect of the schemes entrusted to it by virtue of the Act and those assigned to it by the Government or the Zilla Panchayat and submission thereof to the Zilla Panchayat within the prescribed time for integration with the district plan. (2) Consideration and consolidation of the annual plans of all Grama Panchayats in the taluk and submission of the consolidated plan to the Zilla Panchayat. (3) Preparation of annual budget of the taluk and its submission within the prescribed time to the Zilla Panchayat. (4) Performing such functions and executing such works as may be entrusted to it by the Government or the Zilla Panchayat. (5) Providing relief in natural calamities.

II. Agriculture, including agricultural extension: (1) Promotion and development of agriculture and horticulture. (2) Maintenance of agricultural seed farms and horticultural nurseries. (3) Storing and distribution of insecticides and pesticides. (4) Propagation of improved methods of cultivation. (5) Promotion of cultivation and marketing of vegetables, fruits and flowers. (6) Training of farmers and extension activities.

III. Land improvement and soil conservation Assisting the Government and Zilla Panchayat in the implementation of land improvement and soil conservation programmes of the Government.

IV. Minor irrigation, water management and watershed development: (1) Assisting the Government and Zilla Panchayat in the construction and maintenance of minor irrigation works. (2) Implementation of community and individual irrigation works.

V. Animal husbandry, dairying and poultry: (1) Maintenance of veterinary and animal husbandry services. (2) Improvement of breed of cattle, poultry and other live-stock. (3) Promotion of diary farming, poultry and piggery . (4) Prevention of epidemics and contagious diseases.

VI. Fisheries: Promotion of fisheries development.


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VII. Khadi village and cottage industries: (1) Promotion of rural and cottage industries. 2) Organisation of conferences, seminars and training programmes, agricultural and industrial exhibitions

VIII. Rural housing: Implementation of housing schemes and distribution of house sites in villages outside Gramathana limits.

IX. Drinking water: (1) Establishment, repairs and maintenance of rural water supply schemes. (2) Prevention and control of water pollution (3) Implementation of rural sanitation schemes.-

X. Social and farm forestry , minor forest produce, fuel and fodder:- (1) Planting and preservation of trees on the sides of roads and other public lands under its control.- (2) Fuel plantation and fodder development. (3) Promotion of farm forestry

XI. Roads, buildings, bridges, ferries waterways and other means of communication:

(1) Construction and maintenance of public roads, drains, culverts and other means of communications which are not under the control of any other local authority or the Government. (2) Maintenance of any building or other property vested in the Taluk Panchayat. (3) Maintenance of boats, ferries and waterways.

XII. Non-conventional energy sources: Promotion and development of non-conventional energy sources.

XIII. Poverty alleviation programmes: Implementation of poverty alleviation programmes.

XIV. Education, including primary and secondary schools: (1) Promotion of primary and secondary education. (2) Construction, repair and maintenance of primary school buildings. (3) Promotion of social education through youth clubs and mahila mandals.

XV. Technical training and vocational education: Promotion of rural artisan and vocational training.

XVI. Adult and non-formal education: Implementation of adult literacy.

XVII. Cultural activities: Promotion of social and cultural activities


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XVIII. Markets and fairs: Regulation of fairs and festivals.

XIX. Health and family welfare: (1) Promotion of health and family welfare programmes. (2) Promotion of immunisation and vaccination programmes. (3) Health and sanitation at fairs and festivals.

XX. Women and child development: (1) Promotion of programmes relating to development of women and children. (2) Promotion of school health and nutrition programmes. (3) Promotion of participation of voluntary organisations in women and child development programmes.

XXI. Social welfare including welfare of the handicapped an( mentally retarded:

(1) Social welfare programmes including welfare of handicapped, mentally retarded and destitute. (2) Monitoring the Old Age and Widow's pensions and pensions for the handicapped.

XXII. Welfare of the weaker sections and in particular, of the Scheduled Castes and Scheduled Tribes:

(1) Promotion of welfare of Scheduled Castes, Scheduled Tribes and other weaker sections. (2) Protecting such castes and classes from social injustice and exploitation.

XXIII. Maintenance of community assets: (1) Maintaining all community assets vested in it or transferred by the Government or any local authority or organisation. (2) Preservation and maintenance of other community assets.

XXIV. Public distribution system: Distribution of essential commodities.

XXV. Rural electrification: Promotion of rural electrification.

XXVI. Co-operation: Promotion of co-operative activities.

XXVII. Libraries Promotion of libraries.

XXVIII. Such other functions as may be entrusted.-


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Annexure - 11

Schedule III of Karnataka Panchayat Raj Act 1993 (Functions assigned to TPs – Section 184)

SCHEDULE III I. General functions:

Overall supervision, co-ordination and integration of development schemes at Taluk and District levels and preparing the plan for the development of the district;

II. Agriculture (including agricultural extension) and horticulture: (1) Promotion of measures to increase agricultural production and to popularize the use of improved agricultural implements and the adoption of the improved agricultural practices. (2) Opening and maintenance of agricultural and horticultural farms and commercial farms. (3) Establishment and maintenance of godowns. (4) Conducting agricultural fairs and exhibitions.> (5) Management of agricultural and horticultural extension and training centres. (6) Training of farmers.

III. Land improvement and soil conservation: Planning and implementation of land improvement and soil conservation programmes entrusted by the Government.

IV. Minor irrigation, water management and watershed development: (1) Construction, renovation and maintenance of minor irrigation works. (2) Providing for the timely and equitable distribution and full use of water under irrigation schemes under the control of the Zilla Panchayat. (3) Watershed development programmes. (4) Development of ground water resources.

V. Animal husbandry, dairying and poultry: (1) Establishment and maintenance of taluk and village veterinary hospitals, first-aid centres and mobile veterinary dispensaries. (2) Improvement of breed of cattle, poultry and other livestock. (3) Promotion of dairy farming, poultry and piggery . (4) Prevention of epidemics and contagious diseases.

VI. Fisheries: (1) Development of fisheries in irrigation works vested in the Zilla Panchayat. (2) Promotion of inland, brackish water and marine fish culture. (3) Implementation of fishermen's welfare programmes.

VII. Khadi village and cottage industries: (1) Promotion of rural and cottage industries.


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(2) Establishment and management of training-cum-production centres. (3) Organisation of marketing facilities for products of cottage and village industries. (4) Implementation of schemes of State Boards and All India Boards and Commissions for development of rural and cottage industries.

VIII. Small-scale industries including food processing industries: Promotion of sma1l-scale industries. IX. Rural housing:

Promotion of rural housing programme. X. Drinking water:

Promotion of drinking water and rural sanitation programmes. XI. Minor forest produce and fuel and fodder:-

(1) Promotion of social and farm forestry, fuel plantation and fodder development. (2) Management of minor forest produce of the forests raised in community lands. (3) Development of wasteland.

XII. Roads, buildings, bridges, ferries, waterways and other means of communications:

(1) Construction and maintenance of district roads and culverts, causeways and bridges (excluding State Highways and village roads). (2) Construction of administrative and other buildings in connection with the requirements of the Zilla Panchayat.

XIII. Non-conventional energy sources: Promotion and development of non-conventional energy sources

XIV. Poverty alleviation programmes: Planning, supervision and monitoring the implementation of poverty alleviation programmes.

XV. Education including primary and secondary schools: (1) Promotion of educational activities in the district including the establishment and maintenance of primary and secondary schools. (2) Establishment and maintenance ashram schools and orphanages. (3) Survey and evaluation of education activities.-

XVI. Technical training and vocational education: (1) Establishment and maintenance of rural artisan and vocational training centres. (2) Encouraging and assisting rural vocational training centres.

XVII. Adult and non-formal education: Planning and implementation of programmes of adult literacy and non-formal education programmes.

XVIII. Markets and fairs: Regulation of important fairs and festivals in the district.


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XIX. Health and family welfare: (1) Management of hospitals and dispensaries excluding those under the management of Government or any other local authority. (2) Implementation of maternity and child health programmes. (3) Implementation of family welfare programmes. (4) Implementation of immunization and vaccination programmes.

XX. Women and child development: (1) Promotion of programmes relating to development of women and children. (2) Promotion of school health and nutrition programmes. (3) Promotion of participation of voluntary organizations in women and child development programmes.

XXI. Social welfare, including welfare of the handicapped and mentally retarded:

Promotion of social welfare programmes, including welfare of handicapped, mentally retarded and destitute.

XXII. Welfare of the weaker sections and in particular of the Scheduled Castes and Scheduled Tribes:-

(1) Promotion of educational, economic, social, cultural and other interests of the Scheduled Castes, Scheduled Tribes and Backward Classes. (2) Protecting such castes, tribes and classes from Social injustice and all forms of exploitation. (3) Establishment and management of hostels of such castes, tribes and classes. (4) Supervision and management of hostels in the district, distribution of grants, loans and subsidies to individuals and other schemes for the welfare of Scheduled Castes, Scheduled Tribes and Backward Classes.

XXIII. Maintenance of community assets: (1) Maintenance of community assets vested in it or transferred to it by the Government or any local authorities or organization. (2) Assisting the Government in the preservation and maintenance of other community assets.-

XXIV. Cultural activities: Promotion of social and cultural activities. -

XXV. Public distribution system. XXVI. Rural electrification. XXVII. Co-operation:

Promotion of co-operative activities. XXVIII. Libraries:

Promotion of libraries. XXIX. Such Other functions as may be entrusted.-


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Annexure - 12

Summary of Recommendations of First SFC

Scheme of Devolution:

1. The commission recommends transferring one consolidated share in the

total Non Loan Gross Own Revenue Receipts (NLGORR) of the State

Government to Panchayat Raj Institutions and Urban Local Bodies

2. The commission recommends replacing the system of share of a portion of

some specific taxes of state government by a share in the total "Non Loan

Gross Own Revenue Receipts (NLGORR)" of the state government.

This divisible pool of the resources between the state and local bodies

would include gross yield from all taxes, duties and fees levied and

collected by the state government and excludes 'Grants-in-aid' and the

state's share of central revenue transferred on the recommendation of the

National Finance commission. However, loan receipts from the divisible

pool may be excluded as they involver repayment obligation.

3. The Commission's recommendations take into account both plan and non-

plan expenditure requirements of Panchayat Raj Institutions.

4. The total share Urban Local Bodies and Panchayat Raj Institutions in the

Non Loan Gross Own Revenue Receipts (NLGORR) of the State

Government may be increased from 34.27% to 36%. Of this 36%, 85% may

be transferred to Panchayat Raj Institutions and 15% to Urban Local

Bodies. This recommendation is valid for financial years beginning from

1996-97 to 2000-2001.

5. Of the 36% of the Non Loan Gross Own Revenue Receipts, the share of

Panchayat Raj Institutions is 30.6%. The interse distribution to all the

three layers of Panchayat Raj Institutions will be on the basis of the

following five criteria:


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a. Proportion of population living in rural areas,

b. Proportion of areas covered by the PRIs,

c. Illiteracy rate,

d. Number of persons per bed in government hospitals and

e. Road length per sq. km of area.

6. The following weightage may be given to these criteria

Criteria Weight

1.population 33.33 %

2.Area 33.33%

3.Illiteracy rate 11.11%

4.Length of road/area 11.11%

5.Hospital bed strength/population 11.11%

7. The respective shares of Zilla Panchayats, Taluk Panchayats and Grama

Panchayats in the above devolution to Panchayat Raj Institutions may be

in the ratio of 40:35:25 respectively.

8. The Commission recommends that the recommendations relating to

devolution of funds to Panchayat Raj Institutions should be implemented

in percentage terms as absolute figures are indicated in this Report for

illustrative purpose.

9. In percentage terms, the total devolution to Urban Local Bodies and

Panchayat Raj Institutions would be Rs.2675 crores during 1996-97. If we

include Tenth Finance Commission's grants also, it will come to

Rs.2747.96 crores. PRIs would receive Rs.2274.19 crores in 1996-97

excluding Tenth Finance Commission' grants.

10. The funds for Grama Panchayat and Taluk Panchayats may be released

directly from Zilla Panchayats. Funds for Grama Panchayats need not be

released through Taluk Panchayats.


354

11. The present practice of giving Rs. One lakh grant to Grama Panchayats

under section 206 of the Karnataka Panchayat Raj Act 1993 may be

continue and this should be treated as additional financial assistance and

should not be adjusted from the funds recommended under our devolution

scheme.

12. The Commission recommends that the amount of Rs.4380.93 crores

recommended for Panchayat Raj Institutions by the Tenth Finance

Commission should be distributed among them on the basis of the same

criteria used by the State Finance Commission to distribute State

Government grants to Panchayat Raj Institutions.

13. The commission recommends that Karnataka's share in the Tenth Finance

commission's recommendation relating to Panchayat Raj Institutions

should be used to provide earmarked grants for reconstruction,

improvement and repairs of specified assets of Zilla Panchayats, Taluk

Panchayats and Grama Panchayats over the next five years.

14. The Commission recommends that these grants may be earmarked for

spending only on reconstruction, improvement and repairs of school

buildings, buildings of primary health centres, buildings of veterinary

hospitals etc. If any grants are left over, these may be used for repairing

roads and bridges.

15. The commission recommends that every Zilla Panchayat, Taluk

Panchayat and Grama Panchayat should make a matching contribution in

order to be eligible for this non-plan maintenance grant. This matching

contribution may be used for paying wages bill while the material cost

should be met from the grant coming from the Central Government.


355

16. Zilla Panchayats should be responsible for over all monitoring of

utilisation of these funds. Their reports should be sent to the state

Government for onward transmission to Government of India.

Normative Level of Essential Public Services

17. The Commission recommends earmarked grants as part of the total

devolution. Earmarked grants are intended to enable the Panchayat Raj

Institutions to upgrade certain essential public services to normative

levels.

18. supply of safe drinking water, street lights, roads, primary education and

primary health care are identified by the Commission as the most

essential public services to be provided in rural areas.

19. The commission recommends that these essential services may be

upgraded to normative standards indicated by the commission. These

desirable norms should be reached during the next five years.

20. In order to upgrade the essential public services to the desired norm, the

commission recommends that the required amount maybe earmarked

from the share of the respective Panchayat Raj Institutions in the state

government's Non Loan Gross Own Revenue Receipts.

21. The total estimated cost of upgrading these five essential public services

over the next four years would be about Rs.1130 crores. Thus an average

about Rs.283 crores is required every year for upgradation of the above

identified essential public services. This amount may be earmarked from

the devolution of funds recommended by the commission, and specified

amount of Zilla Panchayats, Taluk Panchayats and Grama Panchayats

may be released every year.


356

22. Zilla Panchayats should be entrusted with the task of implementing

upgradation of safe drinking water supply, primary health and primary

education facilities. Taluk Panchayats should be entrusted with

upgradation of rural roads. Grama Panchayats should be entrusted with

the responsibility of implementing upgradation of street lights. The

specific grants earmarked for these purposes may be released to them

directly. However. Zilla Panchayats should monitor proper

implementation of the programme of upgradation of essential public

services.

Other Recommendations

23. The commission recommends:

a. Transferring programmes and schemes which involve identification of individual beneficiary target groups to Grama Panchayats for implementation.

b. Entrusting of repair works and maintenance of water supply

system, street lights and intra-village roads to Grama Panchayats. c. Treating salaries and other maintenance expenditure of Grama

Panchayats as non-plan expenditure d. Ensuring of proper training not only to the elected representatives

of Zilla Panchayats, Taluk Panchayats and Grama Panchayats but also officials working in these Panchayat Raj Institutions.

e. Formulating Rules of Business to guide the relation between elected

representatives and officials in Zilla Panchayats, Taluk Panchayats and Grama Panchayats.

f. Creation of Common Valuation Authority for both urban and rural

areas. g. Abolition of Hyderbad-Karnataka Area Development Board, Malnad

Development Board, Maidan Development Board and any other regional development Board constituted by the state government.

h. Abolition of the practice of allocating Rs.25 lakhs as MLA local area

development fund. i. Constitution of District Planning Committees provided under the

74th amendment to the constitution with president of the


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District/city/town municiplity as the vice-chairman and the Chief Executive Officer of the Zilla Panchayat as the Member secretary.

24. The Commission recommends that all individual beneficiary oriented

schemes that come under either state sector or centrally sponsored sectors

should be entrusted to GPs for implementation and they should receive

25% of the total devolution of funds recommended by the Commission.

This amount may be apportioned between plan and non-plan, and the

later should cover salaries and other miscellaneous expenditure of staff,

maintenance expenditure of water works, electricity bills, and

maintenance of intra-village roads, the rest of the amount should be spent

on plan programmes which include individual beneficiary oriented

schemes.

25. The Zilla Panchayats/Taluk Panchayats/Grama Panchayats should be

allowed to allocate at least 10% of the district plan outlay to whatever

schemes and programmes they consider important.

26. The clerk-cum-accountant-cum-typist of the village panchayats as also Bill

Collector-cum-clerk should be paid a monthly salary of Rs.1000. The

salary of the other two functionaries: namely valvemman-cum-pump

operator and peon-cum-attender may continue to be Rs.600 and Rs.500

respectively.

27. Bigger Grama Panchayats may be allowed to appoint more than one

valveman-cum-pump operator and he may also be asked to look after the

operation of street lights in the villages. The salary expenditure of the

staff may be met from the devolution of funds recommended by the

Finance commission.

28. The State Government may examine the possibility of reducing the non-

plan expenditure of Zilla Panchayat level by appointing staff of functional

departments like Education, Health and Agriculture etc. to work in

divisions cutting across district boundaries. An Administrative


358

Reforms Commission may be appointed to examine all these

aspects.

29. The State Government may entrust the responsibility of training elected

representatives of Zilla Panchayats to Research and other Academic

Institutions located in different parts of the state. The 'Resource-persons'

for these training programmes should be specialists in different areas like

RDPR etc. After two years of training, trainees should be brought back

again for interaction with departmental officers to explain to what extent

the training was useful and what further needs to be done.

30. The Commission recommends creation of a Taluk Panchayat Fund' for

Taluk Panchayats and its operation through the Taluk sub treasury or a

nationalised bank located at Taluk head-quarters. This Fund may be

operated jointly by the presidents and Executive Officers of Taluk

Panchayats.

31. The Commission also recommends creation of a 'Gram Panchayat Fund' to

which all funds received by Grama Panchayats from all sources may be

credited. This Fund may be allowed to be operated jointly by the Grama

Panchayat president and Grama Panchayat Secretary in a nationalised

commercial bank located either in Grama Panchayat head quarters or

nearby place.

32. The Commission recommends creation of a Common Valuation Authority,

which should undertake revision of values of residential properties. This

may be done as early as possible.

33. The State Government should take immediate action to formulate and

implement Rules of Business to define the powers and privileges of elected

representatives and government officials who work at the three levels of

Panchayat Raj Institutions.


359

34. The commission recommends that the regional planning unit in the

Planning Department should be upgraded to the level of a separate wing

and should be headed by Secretary II, Planning. This wing should be

suitably strengthened as mentioned in the main report.

Recommendations Pertaining to Urban Local Bodies

35. The commission recommends per capita grants as indicated in the footnote

of table 8.4 to Non Municipal Census Towns. As and when they are

merged in the neighboring local bodies, the grants to them will be passed

to the absorbing local bodies.

36. The Commission recommends that the funds made available to Urban

Local Bodies under the award of the Tenth Finance Commission should be

treated as additionality and not as a part plan funds as misinterpreted by

Union Finance Ministry, and earmarked entirely for reconstruction,

improvement and repair purposes.

37. Karnataka's share as per the recommendations of the Tenth finance

Commission for local bodies should be used to provide earmarked grants

for reconstruction, improvement and repairs of specific assets to Urban

Local Bodies over the next five years, and should not be used for any other

purpose.

38. This amount may be distributed among the Urban Local Bodies on the

same criteria which has been used by the Commission to recommend their

share in the state government's revenue. However, for the present the

share of Panchayat Raj Institutions may be distributed only for the year

1996-97 ad hoc as indicated in table 10.1

39. A sum of Rs.26.04 crores due from the Urban Local Bodies to Karnataka

Urban Water Supply & Drainage Board should be recovered from them


360

out of the funds proposed to be devolved to them and credited to the

Karnataka Urban Water Supply & Drainage Board.

40. An amount of Rs.102.95 crores outstanding against all Urban Local Bodies

to the financial institutions should be repaid on their behalf by the state

Government to their creditors.

41. In case where the State Government gives loans to Urban Local Bodies

under externally aided programmes, these funds should be kept outside

the purview of the scheme of devolution. On the other hand if they are

provided in the form of grants, they should be adjusted against funds to

which Urban Local Bodies are entitled under the devolution scheme.

42. Monitoring of utilisation of these funds should be done by the Zilla

Panchayats in case of Panchayat Raj Institutions and by the Divisional

Commissioners in case of Urban Local Bodies.

43. In case of Notified Areas, Sanitary Boards and other non-municipal census

areas only per capita grants from within the share given to the urban

areas is recommended. No grants are recommended to industrial

townships and project colonies.

44. In future, the state government should include the requirements of Urban

Local Bodies and Panchayat Raj Institutions in their memorandum to the

National Finance Commission so that these are taken into account by the

latter while determining the financial needs of local self-governments.

Normative Level of Civic Services

45. The Commission recommends that safe drinking water supply, sanitation

including garbage removal, underground sewerage, roads and street lights

in that order, should constitute the most essential civic services for all

Urban Local Bodies. For Panchayat Raj Institutions, safe drinking water,


361

village sanitation, roads, street lights, primary education and primary

health care, in that order; should constitute the most essential public

services.

46. The existing public services, as enumerated above, should be raised to

certain normative standards over the next five years.

47. The Commission feels that it is necessary to earmark part of the allocated

funds for upgradation of certain essential/civic services like water supply,

street lights, municipal roads and sanitation. This has been suggested to

ensure normative levels of these essential civic services in all Urban Local

Bodies. The remaining funds may be spent by the Urban Local Bodies

according to their own priorities.

48. In case of water supply the Commission has fixed 100 litres for City

Corporations, 80 litres for City Municipal Councils and 70 litres for Town

Municipal Councils and Town Panchayats per capita per day as the

desired normative levels.

49. The KUWS&DB should be entrusted with only construction and bulk

supply of water, and Urban Local Bodies should be incharge of

distribution and collection of water rates.

50. The Commission recommends that Karnataka should adopt the

Tamilnadu Water Supply and Drainage Board scheme of Integrated Water

Supply to both rural and urban areas. However, this requires integration

of personnel and organisation under PHE and KUWS&DB. Accordingly,

we recommend that these bodies may be reorganised to provide water

supply to both urban and rural areas through integrated rural and urban

water supply schemes wherever water is drawn from surface sources.

51. Drinking water supply for both rural and urban areas, other than for

Bangalore, may be entrusted to one department at the state level. The

KUWS&DB may be charged with the responsibility of execution of

integrated water supply programme.


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52. The funding pattern for urban water supply may be as noted at table 6.4

This would reduce the burden on the Urban Local Bodies which are unable

to bear It at present. Although this would Increase the burden on the state

government, the Commission would moderate this burden by stipulating

that the required grants may be adjusted towards recommended

devolution of funds to Urban Local Bodies.

53. A mechanism to simplify the procedure of raising the water rates should

be evolved to avoid delays and to make the increased rate structure

effective.

54. Regarding pourakarmikas, the norms laid down by Government of

Karnataka in Circular No.HMA/1 18/MNM/17 dated 30th June 1977 may

be accepted and enforced. Earmarked grants may be made available for

purchase of lorry/truck/trailer for some Urban Local Bodies as Indicated.

However, in case of drivers, Instead of fresh recruitment, one of the

existing water-men or sweeper may be trained for this purpose.

55. The six large City Corporations In the state may explore the possibility of

privatising garbage collection particularly in areas where Intensity of

garbage accumulation is very high. They should also try to involve NGOs

in this scheme.

56. The Commission accepts the ‘normative standard’ for street lights

prescribed by the Task Force on Housing and Urban Development -

namely twenty street lights per km. of road length. Accordingly It

recommends bringing street lights In all urban areas upto the above norm

in two years, 1996-97 and 1997-98.

57. The Urban Local Bodies are deficient both qualitatively and quantitatively

in roads. A sum of Rs. 17.82 crores is required to bring them up to the

prescribed norm. This may be incurred during the first two years of our

recommendation namely 1996-97 and 1997-98.


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58. The utilisatlon of earmarked grants by the Urban. Local Bodies has to be

properly monitored. These responsibilities should be entrusted to the

Divisional Commissioners and the state government should ensure that

further release of grants to Urban Local Bodies are based strictly on Issue

of utilisatlon certificates by them.

Other Related Issues

59. There should be a common legislation for all categories of Urban Local

Bodies. This legislation should empower Urban Local Bodies to levy tax on

all Central and state government properties, properties owned by

educational institutions and philanthropic organisations.

60. The Commission recommends:

1. Enactment of one common legislation for all Urban Local Bodies.

2. Integration of urban civic service agencies with elected Urban Local Bodies.

3. Bringing about uniformity In accounting and budgetary system of Urban Local Bodies by adopting CAG’s classification of budget accounts.

4. Setting up of a Finance Commission Cell in the state government’s Finance Department.

5. Rationalisation of the administrative structure of Urban Local Bodies,

6. Creation of a Central Valuation Authority and

7. Appointment of an Administrative Reforms Commission.

61. The government may enact one common legislation relating to City

Corporations, City Municipal Councils, Town Municipal Councils and

Town Panchayats consistent with the provisions of the 74th amendment of

the constitution. This may be entitled “Karnataka Urban Local Bodies

Act”.


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62. The Commission is not in favour of reintroducing octroi. This has been

done keeping in view the broader economic interests of the state and the

country.

63. There is a need to redesign property tax which is a major source of

revenue for Urban Local Bodies to make it an elastic source of municipal

revenue.

64. The state government should create a Central Valuation Authority (CVA)

for both urban and rural areas for conducting periodic survey of properties

and their valuation.

65. In order to moderate the opposition to property tax, their rates should be

kept reasonable. Further In order to ensure that this does not result in a

fall of revenue of Urban Local Bodies, steps should be taken to ensure that

all properties are assessed and revised periodically.

66. The Urban Local Bodies should be free to determine their own rate-

structure without seeking prior permission from the state government.

67. Cesses like library cess, beggary cess, education cess, health cess and

water cess etc., should be abolished.

68. The rates of license fees should be revised periodically by Indexing them to

Inflation to recover the cost of services provided to the consumers within

the Urban Local Bodies.

69. Parking fees for motor vehicles should be charged In all commercial areas,

as it Is likely to bring in considerable revenue in big cities and towns.

Further, Urban Local Bodies should provide ‘towing services’ for stranded

vehicles, and charge for the same.

70. Full charges should be levied for the services rendered to the urban

dwellers. Full cost should be determined and water charges recovered by

the municipal bodies.


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71. The Urban Local Bodies may be permitted to appoint their own electrical

line-men, as KEB does not have adequate line-men.

72. The cost of erection of poles should not be recovered exclusively from the

Urban Local Bodies. A part of it may also be recovered from private

residential and commercial consumers who use these poles to get

electricity.

73. In order to deal with the problem of frequent stay-orders froth civil courts

in matters regarding revision of rent etc., the Jurisdiction of lower courts

should be barred, and in difficult cases Urban Local Bodies should be

allowed to sell the property in public auction. The proposed common

legislation should make provisions for these alternatives

74. The existing urban development authorities including BDA should be

brought under the respective elected municipal bodies. ‘Slum

improvement’ should also be brought under these bodies.

75. Town planning units, wherever existing, may be transferred to

municipalities. Even functions like urban forestry should be entrusted to

elected municipal bodies.

76. A ‘Finance Commission Cell’ should function in the Finance Department of

state government. This should be headed by a Senior IAS Officer,

designated as Secretary, Finance Commission with other staff as noted in

the detailed report.

77. It is recommended that it should be made binding on all Urban Local

Bodies and Panchayat Raj Institutions to follow the budgetary formats

and accounting system as prescribed by the CAG. This would ensure

uniformity in the formats of municipal budgets.

78. The sources of revenue of municipalities should be classified as per details

in para 11.17 of the detailed report.


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79. The distribution of grants to Urban Local Bodies may be done through the

concerned treasury/sub-treasury in future.

80. The accounts of Urban Local Bodies should be audited by the CAG In

future.

81. The Commission recommends abolition of the Directorate of Municipal

Administration. The proposed uniform legislative enactment for Urban

Local Bodies should empower the Deputy Commissioner as the first

appellate authority and Divisional Commissioner as the final appellate

authority in all cases relating to municipalities. Further, the above

legislation should make a specific provision that whenever courts interfere

in matters relating to levy and collection of tax, the litigants should first

pay the tax and then go in appeal.

82. The request of the municipal employees to be treated as government

employees, has been considered by the Commission. For reasons stated in

the report, the Commission recommends that this cannot be done. In

future all decisions relating to service conditions of municipal employees

may be taken by the respective Urban Local Bodies.

83. The Commission recommends periodic in service training to be imparted

to municipal employees to improve their efficiency and attitude.

84. The Commission recommends that the Department of Urban Development

provide financial assistance to the existing research institutions to

undertake research on related issues to be used as inputs for policy

formulation.

85. The state government should appoint an Administrative Reforms

Commission to recommend reorganisation of the state government’s

administrative structure including municipal administration.


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Criteria and Weights

Criteria for PRIs Weights Criteria for ULBs Weights 1. Proportion of rural population

23.03% 1. Proportion of urban population

10.30%

2. Proportion of rural area 32.59% 2. Proportion of urban area 0.74% 3. Road length per sq.km 8.34% 3. Road length per sq.km 2.78% 4. Illiteracy rate 4. Illiteracy 5. No. of persons per hospital bed

20.34% No. of persons per hospital bed

1.88%

Total weight 84.30% Total weight 15.70% Rounded off to 85% Rounded off to 15%


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Annexure – 13

Summary of Recommendations of Second SFC

The NLGORR Concept:

1. The Second State Finance Commission is required to determine the

total share of Panchayat Raj Institutions and Urban Local Bodies in the revenue

of the State Government. It has to suggest principles governing the allocation of

the revenue among the three tiers of Panchayat Raj Institutions and among the

Urban Local Bodies. The Second State Finance Commission recommends

continuation of the system of devolution of funds to Panchayat Raj Institutions

and Urban Local Bodies based on “Non Loan Gross Own Revenue Receipts” of

the State (NLGORR). The NLGORR includes all taxes levied and collected by

the State Government, interest receipts, all duties, fees and other non loan non

tax receipts levied and collected by the State Government under the budget

heads general services, social services and economic services. This concept has

already been accepted by the State Government on the recommendations of the

First State Finance Commission and necessary Government Order has been

issued vide G.O. No.FD9/ZPA/94 dated 31.3.1997.

2. Devolving a share of the total Non Loan Gross Own Revenue Receipts is

a progressive step and therefore the Second State Finance Commission does not

favour the practice of sharing revenue from selected individual taxes. The Second

State Finance Commission feels that it is appropriate to retain the concept of

NLGORR and recommends devolution out of the NLGORR of the State

Government.

Approach:

3. Devolution to Panchayat Raj Institutions and Urban Local Bodies out of

the NLGORR of the State during a five year period cannot be made to fully cover

the requirements of funds as demanded by the normative standards fixed by the

Government.


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4. It is essential that a balance is struck in the distribution of available

resources, keeping in view the functional responsibilities of the State

Government on the one hand and Panchayat Raj Institution and Urban Local

Bodies on the other. While efforts should be made to achieve normative

standards in providing core basic services, care has to be taken to deal with

financial compulsions in respect of expenditure items assigned to local bodies

including 85 percent of non-plan allocation to Zilla Panchayats and Taluk

Panchayats towards salary, office expenses and grant-in-aid.

5. The Second State Finance Commission has to strike a balance in

ensuring requirement of funds to meet the responsibilities of the local bodies on

the one hand and State Government on the other. As such, the Second State

Finance Commission has adopted “Balanced Financial Allocation

Approach”.

Quantum of devolution:

6. The Second State Finance Commission has taken note of what has been

released as devolution of funds to Panchayat Raj Institutions and Urban Local

Bodies during the last five years. As against 36 percent of NLGORR

recommended by the First State Finance Commission as the share of Panchayat

Raj Institutions and Urban Local Bodies, the Second State Finance Commission

recommends that this share should be increased to 40 percent of the NLGORR of

the State Government.

Indicators and Weightages:

7. While retaining the two indicators viz., Population and Area, the

Second State Finance Commission has formulated an Index of backwardness

consisting of Illiteracy Rate, Proportion of Scheduled Caste & Scheduled Tribe

Population and Population per bed in Government Hospitals.


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8. Regarding weightage, as against 33.33 percent weightage to Population,

33.33 percent weightage to Area and 33.34 percent weightage to Index of

Backwardness, assigned by the First State Finance Commission, the Second

State Finance Commission has assigned a higher weightage to Index of

Backwardness by increasing it to 40 percent. This is to enable backward areas to

get their due share in the allocation of State revenues. The Second State Finance

Commission has assigned a weightage of 30 percent each to Population and Area.

9. Considering the influence of three indicators of backwardness of

educational, social and economic aspects of the society, the Second State Finance

Commission has assigned weightage to the indicators of backwardness as

follows:

Sl.

No.

Indicators of

Backwardness

Weightage

1 Illiteracy rate 15 percent

2 SC&ST Population 15 percent

3 Persons per hospital bed 10 percent

Total Weightage for index of backwardness

40 percent

10. The Second State Finance Commission also examined whether

population below poverty line and per-capita income could be used as indicators.

Due to limitations of availability of data for a divide between rural and urban,

these two indicators could not be used.

Relative Share of Panchayat Raj Institutions and Urban Local Bodies:

11. After adopting the “Balanced Financial Allocation Approach” and

recommending transfer of 40 percent out of NLGORR of the State to the

Panchayat Raj Institutions and Urban Local Bodies, the Second State Finance

Commission has to deal with the following:

i. Arriving at the share of Panchayat Raj Institutions on the one hand and Urban Local Bodies on the other out of the NLGORR.


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ii. Allocation among the three tiers of Panchayat Raj Institutions. iii. Basis for determining the share of each Zilla Panchayat, Taluk

Panchayat and Grama Panchayat. iv. Formula for inter-se allocation among the Urban Local Bodies.

12. The weightages assigned to each of the indicators for the divide

between Panchayat Raj Institutions and Urban Local Bodies is as follows.

Weights assigned to all the five indicators for Panchayat Raj Institutions (PRIs) and Urban Local Bodies (ULBs)


1. Proportion of rural population 19.81% 1. Proportion of urban

population 10.19%

2. Proportion of rural area 29.33% 2. Proportion of urban area 0.67% 3. Proportion of rural SC&ST population

11.75% 3. Proportion of urban SC&ST population

3.25%

4. Proportion of rural Illiterates 12.03% 4. Proportion of urban

Illiterates 2.97%

5. Ratio of rural population per hospital bed

7.50% 5. Ratio of urban population per hospital bed

2.50%

Total weight 80.42% Total weight 19.58% Rounded off to 80% Rounded off to 20%

As against the allocation of 30.60 percent to Panchayat Raj Institutions

and 5.40 percent to Urban Local Bodies out of NLGORR as recommended by the

First State Finance Commission, the Second State Finance Commission

recommends that 32 percent (i.e. 80 percent of 40 percent of NLGORR) should go

to Panchayat Raj Institutions and 8 percent (i.e. 20 percent of 40 percent of

NLGORR) should go to Urban Local Bodies out of NLGORR. This proportion is

after taking into consideration the percentage increase in urban population,

needs of new areas brought under Urban Local Bodies and the responsibilities

they have for new demands such as solid waste management.

13. The devolution scheme recommended by the First State Finance

Commission in the ratio of 40:35:25 to Zilla Panchayats, Taluk Panchayats and

Grama Panchayats respectively has not been accepted by the State Government.


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The Second State Finance Commission has decided that the divide between plan

and non-plan allocation has to be recognized and taken into account in the

context of the following ground realities:

1. Zilla Panchayats and Taluk Panchayats do not have their own source of

revenue.

2. They are responsible to implement programmes under non-plan.

3. Major component of budgetary provision is under non-plan expenditure

towards payment of salaries. On the basis of the present position, the

non-plan allocation to Panchayat Raj Institutions has to be sustained.

The Second State Finance Commission had no other alternative but to

keep the allocation of funds under non-plan intact and has decided not to apply

the indicators and weightages for inter-se allocation under non-plan among the

three tiers of Panchayat Raj Institutions. The Second State Finance Commission

has decided to apply indicators and weightages only in respect of allocation of

‘plan’ funds to Zilla Panchayats and Taluk Panchayats.

14. The Second State Finance Commission recommends a separate

pattern in the allocation under plan and non-plan based on the trend of

allocation which in effect recognizes the functional responsibilities assigned to

the three levels of Panchayat Raj Institutions.

15. Recognising the fact that the allocation under plan and non-plan

cannot be consistent when the change over takes place from one plan period to

next plan period, the Second State Finance Commission has recognized that

there will be substantial increase in the non-plan allocation between the last

year of one plan and the first year of the subsequent plan. There is justification

in looking at plan and non-plan allocations separately, in view of the fact that

flexibility in allocating funds is not available to non-plan expenditure.


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16. The flexibility in allocation of funds to Zilla Panchayats and Taluk

Panchayats can only be in respect of plan allocation. Out of plan funds meant for

“Zilla Panchayats Schemes” and “Taluk Panchayats Schemes” as reflected in the

Link Document, 65 percent should flow to Zilla Panchayats and 35 percent to

Taluk Panchayats. There should be flexibility in changing the ratio depending

upon changes in allocation of functions to these bodies.

17. As far as Grama Panchayats are concerned a fixed amount is being

released as untied each year. The same approach should be continued.

Therefore, the application of indicators and weightages is not resorted to in

respect of Grama Panchayats. The State should provide a uniform rate of block

grants with an incremental increase every year. In the first year, the allocation

should be Rs.3.50 lakhs per Grama Panchayat and in the subsequent four years

it should be increased at the rate of Rs.25,000 (Rupees twenty five thousand) per

Grama Panchayat per year.

18. The formula for allocation among Panchayat Raj Institutions and

inter-se allocations has to be worked out keeping in view functional

responsibilities for meeting the committed expenditure under non-plan.

Allocation under plan for development works should be based on indicators and

weightage formulated by the Second State Finance Commission.

19. As far as Urban Local Bodies are concerned, the Second State Finance

Commission has not made any distinction between plan and non-plan

allocations and in the context of non-availability of data for some of the

indicators, the Second State Finance Commission has decided to assign

weightage to only two indicators viz., Population and Illiteracy Rate for inter-se

allocation. The weightage ratio between these two has not been disturbed. With

this the weightage for inter-se allocation among Urban Local Bodies is as follows:


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Indicator Percentage 1) Population 2) Backwardness indicator: Illiteracy rate

67 percent

33 percent Total 100 percent

20. The inter-se allocation among the Urban Local Bodies has been

worked out on the basis of indicators and weightages viz., Population (67 percent

weightage), illiteracy rate (33 percent weightage). There is no justification to

distribute the funds based on salary requirements and it should be done away

with and individual Urban Local Bodies should be made responsible to meet the

salary of their employees as a direct responsibility.

Common Purpose Fund for Urban Local Bodies:

21. In order to facilitate developing a comprehensive database,

computerization, development of software required for Urban Local Bodies,

training, preparation of draft documents pertaining to contracts, agreements,

tenders, manuals, studies and surveys etc., the Second State Finance

Commission recommends that a ‘Common Purpose Fund’ should be created to

serve all the Urban Local Bodies. A sum of Rupees five crores should be set apart

each year out of the total share of the Urban Local Bodies as per devolution

recommended by the Second State Finance Commission.

When recommendations can be made operational:

22. Recommendations of the Second State Finance Commission should be

made operational for a period of five years with effect from the financial year

2003-04.

Loan Repayment by Urban Local Bodies:

23. The total loan amount outstanding towards Life Insurance

Corporation of India (LIC), Housing and Urban Development Corporation

(HUDCO) and the debentures is of the order of Rs.408.55 crores. In addition,

Urban Local Bodies owe Rs.46.41 crores to the State Government under

Integrated Development of Small and Medium Towns (IDSMT) scheme. Four


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Urban Local Bodies have also borrowed Rs.33.55 crores from the Asian

Development Bank with the Government guarantee.

24. The Second State Finance Commission is not in favour of writing-off of

any part of the dues with the view to ensuring financial responsibility on the

part of the Urban Local Bodies. The allocation recommended by the Second

State Finance Commission will result in significant improvement in the financial

position of Urban Local Bodies, in addition to capital value based taxation

system due for implementation by Urban Local Bodies. The Second State

Finance Commission recommends that as an incentive for regular repayment of

loan instalments, the State Government should give the interest part of the loan

instalments due as subsidy. This should be outside the devolution recommended

for Urban Local Bodies. The subsidy towards interest should be given only to

those Institutions who make regular repayment of loan instalments. The LIC

and HUDCO loan instalments may also be paid by Government by adjusting the

same from the devolution of funds to individual Urban Local Bodies in respect of

those who are not paying instalments regularly.

Distribution of 11th Central Finance Commission Grants:

25. In the Eleventh Central Finance Commission report, it is envisaged

that the interse distribution of its grants among Panchayat Raj Institutions and

Urban Local Bodies should be based on the principles recommended by the State

Finance Commission. The Second State Finance Commission has assumed the

responsibility to make recommendations for the inter-se allocation of the

Eleventh Central Finance Commission Grants. The Second State Finance

Commission’s recommendations should be made applicable for the remaining

period of two years of award period of Eleventh Central Finance Commission i.e.,

2003-04 and 2004-05.

26. Each Grama Panchayat should be given Rupees one lakh out of the

11th Central Finance Commission grants for the purpose of maintenance of civic

services in rural areas. The remaining amount should be allocated to Zilla


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Panchayats and Taluk Panchayats in the ratio of 40:60 respectively. Inter-se

allocation among the Zilla Panchayats and Taluk Panchayats should be based on

the weightages assigned by the Second State Finance Commission.

27. For Urban Local Bodies the grants should be for the purpose of

maintenance of civic services. The inter-se allocation should be on the basis of

weightages assigned by the Second State Finance Commission which is the same

as the weightages assigned for the devolution to Urban Local Bodies out of

NLGORR.

28. The Rural Development & Panchayat Raj Department and the Urban

Development Department may decide regarding utilisation of earmarked grants

for the purpose of maintenance of accounts and their audit and database on the

finances of the local bodies in consultation with State Accounts Department and

Information and Technology Department.

Incentive scheme for Grama Panchayats:

29. Incentive scheme is designed to encourage Grama Panchayats to

maximize their revenue mobilisation. An amount of Rs.10 crores should be

earmarked during each year for the incentivisation scheme to Grama

Panchayats. The incentive fund may be increased after two years if the State

Government finds that this scheme has had the desired impact on the

performance of Grama Panchayats. Incentive fund should not be diverted for

any other purpose. Incentive fund should be allocated among all the districts in

proportion to the number of Grama Panchayats in each district. Amount under

the incentive fund should be released directly to Zilla Panchayats.

1. Chief Executive Officers of Zilla Panchayats will operate the Incentive

Fund at the district level. No further allocation to taluk level. The

entire district is considered as one unit for selecting Grama Panchayats

for awarding cash incentive.


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2. All Grama Panchayats whose Internal Revenue Mobilisation (IRM) is

60 percent and above to the total “Demand” in each year (i.e. Demand

including the opening balance and inclusive of all taxes, rates, fees,

etc.) for three consecutive preceding financial years (excluding the

financial year in which Incentive Award is being decided) are eligible to

be considered for awarding cash incentive.

Example: A Grama Panchayat whose collection was 60 percent and

above during the financial years 1999-00, 2000-01 and 2001-02 may be

considered for deciding the Incentive Award during the financial year

2002-03.

3. No Grama Panchayat whose IRM is less than 60 percent in any of the

three preceding years (consecutively) is eligible for Incentive award.

4. The Incentive award will be a fixed amount of Rs.2.00 lakhs (Rupees

Two Lakhs) for each eligible Grama Panchayat.

5. The Chief Executive Officer of every Zilla Panchayat will prepare a list

of all the Grama Panchayats in the district, every year, whose

collection was 60 percent and above in the preceding three years in the

descending order of the average percentage of collection over the three

years period. Incentive Award will go to such number of Grama

Panchayats, as per the amount available at Rs.2.00 lakhs per Grama

Panchayat, whose average collection (IRM) percentage is the highest.

6. A Grama Panchayat which gets the Incentive Award in a year will not

be eligible for Incentive Award for the next three years. (For example:

If a Grama Panchayat ‘X’ gets the Incentive Award in the year 2003-04,

it will not be eligible to get the Incentive Award for a period of three

years i.e., till 2005-06. Grama Panchayat ‘X’ will become eligible for

Incentive Award during the year 2006-07.

7. Grama Panchayats should utilise the Incentive Award amount

exclusively for Community Development works.

8. If in a financial year, sufficient number of eligible Grama Panchayats

for incentive award are not available, in any district, the Government

in RD&PR Department may divert the un-utilised allocation under the


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Incentive Fund of that district to any other district where more number

of eligible Grama Panchayats for getting incentive award are available.

Incentive Scheme for Urban Local Bodies:

30. For Urban Local Bodies, an Incentive scheme should be formulated by

the Government, on similar lines as recommended by the Second State Finance

Commission for Grama Panchayats, after two years of implementation of the

capital value based taxation system.

User Charges:

31. The concept of User Charges must be introduced at the Grama

Panchayats level. It should be an additionality to the house tax/property tax.

Section 199(2) of the Karnataka Panchayat Raj Act, 1993 should be amended

suitably to replace the term ‘water rate’ by the term ‘user charge’. There should

be flexibility in the levy of user charges in respect of those having individual tap

connection and those who draw water from public stand posts.

32. The quantum of user charges levied by Grama Panchayats should not

exceed 50 percent of the total Operation and Maintenance expenditure assessed

by the Grama Panchayat in a financial year.

Property Tax:

33. The present revenue realization by Grama Panchayats from property

tax is very low. Periodical revision is a must. The minimum rate of property tax

should be fixed at 8 percent of the annual letting value and maximum at 12

percent of annual letting value. The annual letting value itself should be revised

by a designated authority for every Grama Panchayat once in four years and the

Grama Panchayats should levy property tax accordingly. Houses constructed

outside the gramatana should also be brought under the purview of property tax

to be levied by Grama Panchayats. There should be specific provision for levy of


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property tax in respect of houses built on revenue lands outside the gramatana

area.

Assigning of new sources of revenue:

34. Fifty percent of the share out of revenue realised by lease/auction of

sand beds and stone quarrying should be assigned to the concerned Grama

Panchayats. The Second State Finance Commission is not in favour of transfer

of the management of sand beds and stone quarrying to Grama Panchayats. The

revenue realised on this account should be utilised only for community

development programmes and for protection of environment

35. The revenue realised from all the tanks falling within the jurisdiction

of Grama Panchayats should be fully assigned to the concerned Grama

Panchayats. If the water spread area of a tank falls under the jurisdiction of

more than one Grama Panchayat, the revenue may be assigned proportionately

on the basis of water spread area. The management of such tanks need not be

transferred to Grama Panchayats.

36. The transfer of funds from the Department of Mines and Geology and

Fisheries should be done by the District Officers directly as per the assignment

pattern recommended by Second State Finance Commission.

Solid Waste Management:

37. Keeping in view the orders of the Hon’ble Supreme Court of India

regarding Solid Waste Management, the cost of acquisition of land for landfill

should be borne by the State Government. This should be outside the NLGORR

devolution to the Urban Local Bodies. The increase in the quantum of funds

recommended to Urban Local Bodies by the Second State Finance Commission

out of NLGORR will take care of the funds required for other components of

Solid Waste Management including O&M cost.


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Consolidation of Schemes to avoid overlapping:

38. Consolidation of schemes which are multi sectoral in nature not

confined to any one department should be integrated and the department

identified by the Government should implement such schemes.

Reduction in the number of Heads of Account:

39. The Second State Finance Commission recommends that the number

of Heads of Accounts should be reduced by broadly categorizing them like New

Water Supply Schemes, Special Water Supply Schemes and Maintenance of

Water Supply Schemes.

Timely release of funds:

40. Funds earmarked to Panchayat Raj Institutions as per Link Document

should be released in time. Funds released during the fag end of a financial year

should be permitted to be used after the concerned financial year is over, by

giving three months time for utilisation of funds although the implementation of

the relevant schemes spills over to subsequent financial year.

Preparation of Annual Action Plan in two Parts:

41. The State Government should consider a change in the existing

pattern for preparation of Annual Action Plan. It may be divided into two parts.

To the extent of 80 percent of allocation at the beginning of the financial year as

Part-A. 20 percent of allocation during the month of November if funds are made

available as Part-B. Part-A is fully assured in the beginning of the financial year

itself. Part-B should be permitted to be taken up from November onwards if the

funds are made available by the Government.

Amendments to Karnataka Panchayat Raj Act, 1993 and Karnataka

Municipalities Act, 1964:

42. There are certain amendments considered necessary in the context of

suggestions made during the interaction with the representatives of Panchayat


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Raj Institutions and Urban Local Bodies and also in view of the

recommendations made by the Second State Finance Commission. These are

provided in the Report.

Human Resources Management in Urban Local Bodies:

43. The vacancy position of officers and staff in the Urban Local Bodies

needs immediate attention of the Government. There should be regular

recruitment to ensure that the vacancies that exist are filled-up promptly.

Unqualified and lower cadre officials are placed in charge of posts of Chief

Officers of Town Municipal Councils and Town Panchayats. These persons

should be replaced by qualified persons. This will facilitate dealing with the

problem of deterioration in the quality of services as well as better revenue

mobilisation. The Government should evolve a human resources management

policy and this should include regular recruitment and training of personnel.

General:

44. Post of an officer on special duty should be created six months before

the constitution of the State Finance Commission with a view to facilitating the

Commission to start functioning from day one itself. The posting of Government

officials to the State Finance Commission should be done promptly at the level of

State Government.

45. A Finance Commission Cell should be created with a view to closely

monitoring the implementation of the decisions taken by the Government and

also to maintain a database.


382

Annexure – 14

Government Order regarding implementation of First SFC recommendations issued by Finance Department, GOK (G.O.No.FD 9 ZPA 94

Dated:31.3.1997)


383


384


385

Annexure – 15

Government Order regarding implementation of Second SFC recommendations issued by Urban Development Department, GOK (G.O.

No.UD 121 SFC 2005, dated:12.4.2006)


386


387


388


389

Annexure – 16 Government Order regarding implementation of Second SFC

recommendations issued by Finance Department, GOK (G.O.No.FD 338 Exp-9/2006, Dated:29.06.2006)


390


391


392


393


394

Annexure – 17

List of persons consulted by the Commission

Sl. No. Name Designation

Finance Department 1 Sri M.R. Sreenivasamurthy Principal Secretary 2 Sri Yogendra Tripati Secretary 3 Sri Anil Kumar Jha Secretary

Rural Development and Panchayat Raj Department 4 Sri K. Jayaraj Principal Secretary 5 Sri A.S. Srikanth Secretary (Panchayat Raj) 6 Sri S. D. Meena Commissioner, Rural Water Supply 7 Smt Manjula M Director (Rural Infrastructure) 8 Sri A. S. Shivanandacharya 9 Sri C. M. Shirol Director 10 Sri Ashraful Hasan Director 11 Sri K. R. Raju Director 12 Sri B.S. Hiremath 13 Sri H.M. Prakash kumar Chief Engineer

Urban Development 14 Smt Lakshmi Venktachalam Principal Secretary 15 Sri Jyothi Ramalingam Principal Secretary 16 Sri Subhash Chandra Secretary 17 Sri Lakshmipathy Joint Director 18 Sri Gopalakrishna Gowda Managing Director (KUWSDB)

Health and Family Welfare Department 19 Sri P.N. Srinivasachary Commissioner 20 Sri M.S. Swamy 21 Dr. Suresh Nirajpete Assistant Director 22 Sri K. Nandakumar Chief Accounts Officer 23 Dr. B.R. Jagashetty Drug Controller

Backwardclass Commission 24 Sri N.M. Panali Director 25 Sri Mohmmad salim Managing Director

Social Welfare Department 26 Sri. M.K. Baladevkrishna Managing Director


395

27 Sri R. Narayanamurthy Deputy Secretary 28 Sri K.S.Puttaraju Joint Director, Social Welfare Dept. 29 Sri Thippeswamy Joint Director (Admin) 30 Sri H.S. Malleshappa Deputy Director (Admin) 31 Smt Y.B.Archana 32 Sri. T.R. Kotappa Divisional Director, DBCDC 33 Sri S.A. Rajvi 34 Sri N. Nagaraju Accounts Officer

Commerce and Industries Department 35 Sri H. Bhaskar Commissioner, Sericulture 36 Sri B. S. Ramaprasad Additional Secretary 37 Sri M.M. Khaji Additional Director 38 Sri Indraraj Aras Additional Director 39 Sri M.P. Rupanarayana 40 Sri M. Anand Joint Director 41 Sri Subhashchandra shetty Deputy Director 42 Smt G. Yemuna Deputy Director 43 Sri B. Mahesh Deputy Director

Minor Irrigation Departmet 44 Sri B. Guruprasad 45 Sri Vasanthkumar Director, Irrigation 46 Sri V. Govindaraj Deputy Secretary

Education Department (Primary and High School) 47 Smt Vanditha Sharma Principal Secretary, Education (Primary &

High School) 48 Sri Kumar Nayak Commissioner, Public Education

Department 49 Sri D.K. Rangaswamy Director, Mass Education 50 Sri Chidre Shankaraswamy Director, Public Education Department

(High School) 51 Sri S.B. Hundadakeri Director, Public Education Department 52 Sri Srikanteshwara 53 Sri K.S. Pujar Deputy Director (education)

Youth Services and Sports Department 54 Sri I.M. Vittala Murthy Secretary 55 Sri Amara kumar pande Commissioner 56 Smt Lalithamma Joint Director


396

57 Sri K.L. Patil Joint Director 58 Sri C.J. Shettar Joint Director 59 Sri Y.R. Kantharajendra Joint Director (Training)

Women and Child welfare Department 60 Dr. Shalini rajaneesh Secretary 61 Smt Ekroop Kour Director 62 Sri M.S. Manjunath Deputy Secretary 63 Sri H.B. Devraj Assistant Director

Forest Department 64 Smt Meera Saxena Principal Secretary 65 Sri Swamynathan Secretary 66 Sri Deepak Sharma

Animal Husbandry and Fisheries Department 67 Smt Shameem Bhanu Principal Secretary 68 Dr. D.S. Ashwath Commissioner 69 Dr. M. Ramakrishna Director (Animal Husbandry) 70 Sri H.S. Meerappagowda Director (Fisheries) 71 Dr. K. Nagarajashetty Joint Director (Development) 72 Dr. S.T. Ramegowda Assistant Director

Horticulture Department 73 Sri B.P. Kaniram Secretary 74 Sri G.N. Venkataramarav Technical Officer

Agriculture 75 Sri Rajaneesh Goel Commissioner 76 Sri G. Prakasha Director, Irrigation

Other Persons:

Shri M.B. Prakash IAS (Retd.)

Dr. S.S. Meenakshi Sundaram IAS (Retd.), State Planning Board

Shri. M.V. Rajashekaran Hon'ble Minister for State for Planning, Government of India

Dr. Kirit Parikh Member, Planning Commission, New Delhi, Government of India


397

Shri M. Veerappa Moily Chairman, Central Administrative Reforms Commission, Government of India

Shri K. H. Muniyappa Hon'ble Minister for Shipping, Road Transport & Highway, Government of India

Dr. A. Ravindra IAS (Retd.), Deputy Chairman, State Planning Board

Dr. G. Thimmaiah IAS (Retd.), Chairman, First State Finance Commission of Karnataka

Shri C. Narayanaswamy Ex MP

Shri Haranahalli Ramaswamy Ex MLA, former Chairman, Karnataka Administrative Reforms Commission(KARC)

Shri K.P. Surendranath IAS (Retd.), Chairman, Second State Finance Commission of Karnataka


398

Annexure – 18

Schedule of interactive & consultation meetings

1. Schedule of interactive meetings held at district level

Sl. No.

District Date

1 Mandya January 18, 2007

2 Mysore January 19, 2007

3 Dharwad January 23, 2007

4 Gadag January 24, 2007

5 Bijapur February 23,24, 2007

6 Bagalkote February 26,27, 2007

7 Uttara Kannada May 21, 2007

8 Bangalore Urban June 5, 2007

9 Kolar June 6, 2007

10 Tumkur June 7, 2007

11 Bangalore Rural June 8, 2007

12 Gulbarga June 14, 2007

13 Bidar June 15, 2007

14 Davanagere July 3, 2007

15 Chitradurga July 4, 2007

16 Belgaum July 27, 2007

17 Udupi August 29, 2007

18 Shimoga August 30, 2007

19 Hassan December 6, 2007

20 Chikmagalur December 7, 2007

21 Dakshina Kannada January 09,10, 2008

22 Raichur February 25, 2008

23 Koppal February 26, 2008

24 Bellary February 27, 2008

25 Kodagu November 13, 2008

26 Chamarajanagara November 14, 2008


399

2. Schedule of Consultation meetings held with Principal Secretaries, Secretaries, Heads of Departments and other senior officers of Government Departments;

Sl. No.

Department Date

1 Agriculture August 11, 2008

2 Horticulture August 11, 2008

3 Animal Husbandry and Fisheries August 12, 2008

4 Forest August 12, 2008

5 Women and Child Development August 18, 2008

6 Youth Services August 18, 2008

7 Education (Primary & Secondary and Adult Education)

August 19, 2008

8 Water Resources (Minor Irrigation) August 19, 2008

9 Social Welfare August 26, 2008

10 Industries and Commerce (Sericulture, Textiles & Handlooms and SSIs)

August 26, 2008

11 Health and Family Welfare August 27, 2008

12 Minorities Welfare August 27, 2008

3. Schedule of interactive meetings held at other States & Institutions

Sl. No. Institute / State Date

1 Institute for Social and Economic Change(ISEC), Bangalore

April 26, 2007

2 National Institute of Rural Development (NIRD), Hyderabad

September 6 & 7, 2007

3 Kerala December 14 & 15, 2007


400

Annexure – 19 Technical Notes

Technical Note: 1

Probit model:

In statistics, a probit model is a popular specification of a generalized linear model, using the

probit link function. A probit regression is the application of this model to a given dataset. It

is a method of solving the models was introduced by Ronald Fisher in an appendix to the

same article. Because the response is a series of binomial results, the likelihood is often

assumed to follow the binomial distribution. Let Y be a binary outcome variable, and let X be

a vector of regressors. The probit model assumes that,

Pr (Y =1/ X=x) = Φ (x’ β),

where Φ is the cumulative distribution function of the standard normal distribution. The

parameters β are typically estimated by maximum likelihood. While easily motivated without

it, the probit model can be generated by a simple latent variable model. Suppose that,

Y* = x’ β + Є,

where , Є/x ~ N(0,1) and suppose that Y is an indicator for whether the latent variable Y * is

positive:

Y =(def) 1 (Y* > 0) = {1 if

Y*> 0

0 otherwise

Then it is easy to show that

Pr (Y =1/ X=x) = Φ (x’ β),


401

http://en.wikipedia.org/wiki/Statistics

http://en.wikipedia.org/wiki/Generalized_linear_model

http://en.wikipedia.org/wiki/Probit

http://en.wikipedia.org/wiki/Ronald_Fisher

http://en.wikipedia.org/wiki/Binomial_distribution

http://en.wikipedia.org/wiki/Cumulative_distribution_function

http://en.wikipedia.org/wiki/Normal_distribution

http://en.wikipedia.org/wiki/Maximum_likelihood

http://en.wikipedia.org/wiki/Latent_variable_model

Technical Note: 2 Ordinary least squares (OLS): Ordinary least squares estimation applies to the linear multiple regression model

Yi = a0 + a1 X1i + a2 X2i + ... + ak Xki + ei

where Yi is observation i of dependent variable Y, X1i is observation i of independent

variable X1, a0 is the constant term and equals the coefficient of an implicit explanatory

variable with value 1, a1 etc. are the coefficients for the independent variables, ei is the

residual.

The ordinary least squares estimation method minimizes the sum of the squared residuals.

When using a number of assumptions, OLS produces so-called best linear unbiased

estimators (BLUE, Gauss-Markov Theorem). These estimators are unbiased (i.e. expected to

be equal to the true value) and efficient (i.e. estimated with smallest variances or confidence

intervals).

The assumptions are:

1. There is no correlation between explanatory variables and residuals (no simultaneity),

i.e. cov(Xji,ei) = 0.

2. The expected or mean value of the residuals equals zero, i.e. E(ei) = 0.

3. Residuals are homoskedastic (no heteroskedasticity), i.e. E(e I 2) = s2 = constant.

4. Residuals are independently distributed (no serial correlation), i.e. E(eiej) = 0.

5. Explanatory variables are independent (no multicollinearity), i.e. cov(Xi,Xj) = 0.

In addition to these well-known standard assumptions we also have:

6. Residuals are normally distributed, i.e. e ~ N(0, s2) (combining assumptions 2 and 3

and 5)

7. Explanatory variables are measured without error (no errors in variables).

8. Variables that are time series must be stationary (no unit roots), i.e.well-defined mean

and variance.


402

Annexure – 20

Classification of Properties - BBMP PART 1

Classification of Properties

Number of properties Nature and classification of Properties 2004-05 2005-06 2006-07 2007-08 A. NUMBER OF TOTAL PROPERTIES 6,86,000 7,15,000 7,55,000 13,00,000

B. NUMBER OF PROPERTIES ASSESSED FOR TAXATION

6,12,400 6,45,000 6,68,535 9,00,000

a) Number of assessed properties that paid taxes

4,25,890 4,29,279 5,85,900 6,57,540

b) Number of assessed properties that defaulted on payment

1,95,510 2,15,721 82,635 2,43,460

c) Number of assessed properties that desp[uted the assessment

250 300 350 600

C. NUMBER OF UN-ASSESSED PROPERTIES

64,600 70,000 86,465 5,00,000

Statutory and other form of exemptions 215 228 235 295

a) Number of properties whose value are below a certain threshold

3000 3500 3800 8700

b) Number of properties which serve a public purpose

1550 1580 1650 2550

c) Number of properties whose occupants belong to a disadvantaged category

5450 6600 7500 21,000

Estimated number of properties not counted or enumerated for purposes of taxation

1350 1380 1395 1855

Number of slum properties connected to municipal services, i.e., street lighting, solid waste collection and paved roads

5000 6000 7000 18,800

a) Number of slum propeties paying property taxes

2800 2800 2800 3500

b) Number of slum properties not paying property taxes

2650 3800 4700 17,500

c) Number of properties paying charges for water or other services

5000 6000 7000 18,500

D. NUMBER OF UNDER-ASSESSED PROPERTIES

5000 5000 5500 25,000

a) Approximate number of properties under rent control

500 500 500 1000

b) Approximate number of rent controlled properties paying taxes

500 500 500 1000

c) Appropriate number of properties whose values have remained unchanged for 5 years or more

1,50,000 1,50,000 1,50,000 2,60,000

Source: Bruhat Bangalore Mahanagara Palike


403

Annexure – 21

Property Taxes Receipts and Expenditure – BBMP

PART 2

Property Taxes Receipts and Expenditure

(in Rs. Lakh) 2004-05 2005-06 2006-07 2007-08

A. PROPERTY TAX RECEIPTS (a) Amount of property tax demanded (excluding arrears)

26100 27900 34800 522200

(i) From domestic properties 16500 17600 22300 37800

(ii) From non-domestic properties 9600 10300 12500 20200

(b) Amount of property tax arrears demanded 3900 4100 5200 6800

(i) From domestic properties 2400 2500 3800 3100

(ii) From non-domestic properties 1500 1600 1400 3700

(c) Amount of property tax collected 23200 25800 34700 44900

(i) From domestic properties(current) 13200 14600 18400 19900

(ii) From domestic properties(arrears) 1200 1800 2600 2400

(iii) From non-domestic properties (current)

7900 6300 11900 19700

(iv) From non-domestic properties (arrears)

900 1300 1800 2900

(d) Amount of property tax under dispute 2300 2600 2900 3500

(e) Amount of unpaid/defaulted property tax 6800 6200 5300 16100

B. SERVICE CHARGES RECEIPTS FROM CENTRAL GOVERNMENT AND STATE GOVERNMENT PROPERTIES:

(a) Amount of service charges demanded Central/State Government properties

43.17 52.16 62.30 79.50

(b) Amount of service charges collected from Central/State government properties

22.60 21.30 33.15 32.10

C. ESTIMATED EXPENDITURE ON PROPERTY TAX ASSESSMENT,

BILLING, AND COLLECTION

30.00 32.00 35.00 49.50

Source: Bruhat Bangalore Mahanagara Palike


404

Annexure – 22

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413

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414

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(PÉÃgÀ¼À ªÀiÁzÀj)


415

Annexure – 23

Speech of Sri. A.G. Kodgi, given at NIRD, Hyderabad on the

occasion of conference of Chairpersons of SFCs

Respected Chairpersons of State Finance Commissions, Commissioners, Dignitaries and other Delegates, Ladies and Gentlemen. It is my pleasure to participate in this workshop organized by

National Institute for Rural Development (NIRD), Hyderabad. The

Institution has been doing yeoman service in the field of Rural Development

and Panchayat Raj Institutions. I sincerely thank them for giving me and

the Members this Commission an opportunity to participate in this August

function. But, I initiate my speech on the subject on “Fiscal

Decentralization and Effective Autonomy in Karnataka”. I would

like to bring some important background about Local Self Government to

consider by this August body. Local Self Government or Decentralization of

power is not a new thing to our country and for that reason even during

Maharaj’s regime, the State administration was effectively done by

decentralization of some important powers and functions to the villages.

Even during the British rule, the powers both financial and administrative

were transferred to the Districts and Taluks for the smooth and proper

governance.

The Centrally planned strategy of the country has not solved the

basic problem of rural poverty, growing income disparities, population

explosion, scarcity of potable drinking water, lack of public hygiene facilities

etc. With this background, an attempt was made in 1957, when the

Balavantharay Mehta Committee was reviewed India’s planning system and

recommended constitution of statutory elected bodies with necessary

powers. This became the beginning of modern day Panchayat Raj System.


416

The two national level committees headed by Ashok Mehta and Professor

M. L. Danthwala further laid the foundation for the Decentralization.

While framing the Indian Constitution, importance was given to the

Local Self Government by specific mention in Article 40, which says

“The states shall take steps to organize Village Panchayats

and endow them with such powers and authority that may

be necessary to enable them to function as units of Self

Government.”

But unfortunately states have failed to take proper steps in this

direction. In the mean time, number of committees have been constituted to

suggest ways and means to improve the concept of local self government. As

a result, in the year 1992, two important amendments were brought to the

Constitution of India, which was the hallmark in the process of

Decentralization. It became mandatory for the Constitution of uniform

Panchayat and Municipal Acts.

Justice Venkatachalaiah Committee has rightly suggested that the

Panchayats and Municipals should be categorically declared to be the

institution of self government and exercise functions assigned to them. The

action taken reports of the State Finance Commissions shall be placed

before the State Legislature within 6 months of the submission of report.

There is a thinking that State Finance Commission’s role should only

advisory and suggesting measures to be taken by the States to supplement

the Finances of the local self government within the jurisdiction

particularly in the context of heavy pressure on Central Finances. This is

the complete negation of the 73rd and 74th Constitutional Amendments

wherein the finance commission was given the responsibility to recommend

grants to improve local government finances more than only tendering

advices without recommending grants for the local bodies would be a futile

exercise.


417

Finances of Panchayats and Fiscal Decentralisation in Karnataka

Introduction:

The 73rd Amendment to the Constitution of India in the year 1992 made it

mandatory upon all the States to establish Panchayat Raj System. An

already well established Panchayat Raj System in the State of Karnataka

made it easy for the State to adopt the provisions enshrined in the Articles

243 to 243 [O] of the Constitution. Karnataka, which had enacted

legislation in the year 1983 to assign large number of functions to the

different tiers of Panchayats passed a new Panchayat Raj Act in 1993 and

duly incorporated all the provisions of 73rd Amendment Act. A three tier

Panchayat Raj System viz., Grama Panchayat at the village level, Taluk

Panchayat at the taluk level and Zilla Panchayat at the district level was

created as per the provisions of the new “Karnataka Panchayat Raj Act

1993”. Currently, Karnataka has 5630 Grama Panchayats, 176 Taluk

Panchayats and 29 Zilla Panchayats. Elections to these institutions

were held three times; in 1993-94 and 1995 for the first term, in 2000 for

the second term and in 2005 for the third term since adoption of new

Panchayat Act. Karnataka has scrupulously followed Reservation

procedure as specified in the 73rd Amendment Act. In fact, Karnataka had

made 25 percent of the seats reservation in favour of women mandatory in

the 1983 Panchayat Raj Act, much before the 73rd Amendment Act. An

attempt has been made in this paper to sketch the finances of these

institutions, financial devolution made by the State to these bodies and the

best practices of Karnataka state in strengthening the Panchayat Raj

System.


418

Finances of Panchayat Raj Institutions in Karnataka:

As per the Karnataka Panchayat Raj Act 1993, the State government has

assigned 30 specific subjects to Grama Panchayats, 27 to Taluk Panchayats

and 28 to Zilla Panchayats, comprising of numerous schemes and

programmes for economic development and social justice, as listed in

the Eleventh Schedule of Constitution. Although the 73rd Amendment Act

does not specify which tier of Panchayat Raj should perform which function,

Karnataka has taken right measures to assign specific functions and roles

to each tier and has also done a detailed activity mapping of the

functions assigned. Finances and functionaries should follow the functions

transferred in order to realize the impact of decentralisation and

empowerment of rural people. The finances of Panchayat Raj Institutions in

Karnataka consist of mainly transfer of funds for specific purpose from

State as well as Central governments and local revenue mobilization by way

of power to levy certain taxes, fees and rates. As per the provisions of

Karnataka Panchayat Raj Act 1993, the Grama Panchayats in Karnataka

are empowered to have independent source of revenue in addition to the

specific purpose grants which they receive from State and Central

governments. Whereas, Zilla Panchayats and Taluk Panchayats do not have

independent sources of revenue, instead they depend for finances on

devolution of funds from the State and Central governments. The

Karnataka Panchayat Raj Act 1993 has the following provisions pertaining

to financial powers of Panchayat Raj Institutions in Karnataka;

1. Section 199 empowers Grama Panchayats to levy tax on

buildings and lands which are not subject to agricultural

assessment, levy water rate for supply of water for drinking and

other purposes, levy tax on entertainment other than

cinematography shows, levy tax on vehicles other than motor

vehicles, levy tax on advertisement and hoarding, levy pilgrim


419

fee on persons attending the jatras, festivals etc, levy market fee,

levy fee on registration of cattle, levy fee on buses, taxies and

auto-stands and levy fee on grazing cattle in the grazing lands.

2. Section 202 provides Grama Panchayats to levy tax on

factory/industry.

3. Section 204 provides for levy of local cess on the land revenue by

the government whose proceeds shall be passed on to the Grama

Panchayats.

4. Section 205 provides for the levy of duty on transfer of

immovable properties in the form of surcharge at the rate of three

percent of the duty imposed by the Karnataka Stamp Act, 1957 on

instruments of sale, etc., situated within the limits of the area of

Taluk Panchayat. The entire amount collected shall be passed on to

the Taluk Panchayats in the State in proportion to the population of

the taluk.

5. Section 206 stipulates that the Government shall make annually a

grant of rupees not less than five lakhs to each Grama

Panchayat which shall be utilized for meeting the electricity charges,

maintenance of water supply schemes, sanitation and other welfare

activities.

6. Section 207 specifies that the Government shall make a grant to

every Taluk Panchayat and Zilla Panchayat to cover the expenses of

the establishment.

7. Section 208 states that the Government may make discretionary

grant to the Grama Panchayats, Taluk Panchayats and Zilla

Panchayats.

8. Sections 214, 220, and 229 empower the three tiers of Panchayat

Raj Institutions in Karnataka to raise loans and form a sinking


420

fund with the previous sanction of the Government and subject to

conditions imposed by it from time to time.

9. Sections 221 and 228 state that the Taluk Panchayat and Zilla

Panchayat may charge fee for any license or permission issued by

them and levy rent and fee for the occupation or use of land or

other property placed under their control.

Fiscal Decentralisation in Karnataka:

As already mentioned, matching finances and functionaries should be

transferred to Panchayat Raj Institutions along with the functions. With

regard to functionaries, Karnataka has deputed large number of personnel

for all the three tiers of Panchayat Raj Institutions. As these persons are on

deputation from different line departments of Karnataka government it

would be worthwhile to create a separate Cadre and Recruitment

Rules for Panchayat Raj Institutions.

Box – 1 Indicators and Weightages adopted by First State Finance Commission

of Karnataka First State Finance Commission had fixed a weightage of 33.33 percent to Population, 33.33 percent weightage to Area and 33.34 percent weightage to backwardness indicators. Among the three Indicators of Backwardness, Illiteracy rate and Population per hospital bed were assigned 11.11 percent weightage each and Road length per sq.km. was assigned 11.12 percent weightage.

Setting up of State Finance Commissions, which is mandatory, plays a

vital role in fiscal decentralisation. Karnataka has rightfully constituted

State Finance Commissions regularly as per the provisions of 73rd

Amendment Act and Karnataka Panchayat Raj Act 1993.The first

Commission was constituted in

the year 1994 which gave its

report in 1996. The second

Commission was constituted in

the year 2000 and it gave its

report in 2002. Key

recommendations on financial

devolution made by the two

Finance Commissions of

Karnataka and extent of actual


421

devolution taken place in Karnataka are briefly discussed in the following

paragraphs.

The First State Finance Commission of Karnataka recommended

transferring one consolidated share in the total Non-Loan Gross Own

Revenue Receipts (NLGORR) of the State government to Panchayat Raj

Institutions and Urban Local Bodies in Karnataka. The NLGORR of the

State government include all taxes, duties, fees, interest receipts and other

non-loan non-tax receipts levied and collected by the State government.

Although the term of reference to the Commission was specifically to

suggest the principles governing the sharing of the net proceeds of the

taxes, duties, tolls and fees and other revenues levied by the State

Government, the First State Finance Commission decided to recommend a

share in the NLGORR of the State Government, considering the practical

difficulties in arriving at the net yield. The First State Finance

Commission recommended that the total share of Panchayat Raj

Institutions and Urban Local Bodies out of NLGORR of the State

Government should be 36 percent. Based on weightages fixed to the

indicators, the Commission recommended that the share of Panchayat

Raj Institutions should be 85 percent of 36 percent i.e., 30.60

percent of NLGORR. The indicators and the weights assigned are given in

Box–1. The State Government accepted this recommendation. It may be

seen from Table–1 that Karnataka has devolved more than 30.6 percent of

NLGORR to the Panchayat Raj Institutions.


422

Table – 1

Financial Devolution made to Panchayat Raj Institutions during the period 1997-98 to 2002-03

Year NLGORR

of Karnataka (Rs. Crores)

Amount Devolved to

PRIs (Rs. Crores)

% to NLGORR

1997-98 7676 2685 34.98

1998-99 8413 3010 35.78

1999-00 9356 3278 35.04

2000-01 10703 3661 34.21

2001-02 10947 3724 34.02

2002-03 11717 4409 37.63 Source: Report of Second State Finance Commission-2002, Government of Karnataka (GOK); Finance Department, GOK

The Second State Finance Commission retained the concept of

NLGORR as the basis for devolution of funds to the Panchayat Raj

Institutions and Urban Local Bodies. Considering the fact that the State

government had effected 39 plus percentage of devolution during the

period 1997-98 to 2001-02 to the Panchayat Raj Institutions and Urban

Local Bodies, it enhanced the share from 36 percent to 40 percent. The

indicators and weightages were slightly modified (please see Box–2) and

relative share of Panchayat Raj Institutions and Urban Local Bodies was

arrived at 80 and 20 percent respectively. In other words the share of

Panchayat Raj Institutions was 32 percent and that of Urban Local Bodies

was 8 percent of NLGORR. The Second State Finance Commission

suggested that its recommendations be made effective from the financial

year 2003-04. But, Karnataka government took considerable time to

implement its recommendations, only in June 2006 orders were issued and

the basis for devolution was altered to Non-Loan Net Own Revenue


423

Box – 2 Indicators and Weightages adopted

by Second State Finance Commission of Karnataka


Population 30 Area 30 SCs and STs Population 15

Illiteracy Rate 15 Population per hospital bed 10

Receipts (NLNORR)

instead of Non-Loan Gross

Own Revenue Receipts

(NLGORR). It may be seen

from the facts given in Table–

2 that the Panchayat Raj

Institutions have received less

than 32 percentage of

NLGORR during the financial

years 2004-05, 2005-06 and 2006-07. But, during the financial year 2007-08

Karnataka government has made an allocation of almost 32 percent.

Table – 2

Financial Devolution made to Panchayat Raj Institutions during the period 2003-04 to 2007-08

Year NLGORR of

Karnataka (Rs. Crores)

Amount Devolved to

PRIs (Rs. Crores)

% to NLGORR

2003-04 15529 5178 33.35

2004-05 20545 6138 29.87

2005-06 22506 6466 28.73

2006-07 (R.E) 28185 8008 28.41

2007-08 (B.E) 28548 9071 31.77


Allocation of Plan Funds to Panchayat Raj Institutions in Karnataka:

Karnataka has been a pioneering state in supporting Panchayat Raj

Institutions; it had embarked upon a unique two tier system of

decentralized local governance through Zill Parishads and Mandal

Panchayats. The initiative of Karnataka in 1987 was a first in

decentralization reforms with a central theme being creation of strong


424

district level local governments. Karnataka transferred all the district

sector plan schemes to these institutions which were being implemented by

the respective line departments of state government. The plan funds are

meant for taking up developmental works. It would be worthwhile here to

compare the transfer of plan funds to the Panchayat Raj Institutions during

the pre and post constitutional amendment (which is also the period in

which the recommendations of First and Second State Finance

Commissions of Karnataka were supposed to have been implemented). The

comparative figures are given in Table-3 below. The trends in the plan size

of Karnataka vis-à-vis allocation of plan funds to Panchayat Raj Institutions

are given in Figure-1. It may be seen that there is a five percent point

difference in allocations of plan funds between the two periods and the

growth rate of allocation of plan funds is not in congruent with which the

plan size of Karnataka has grown.

Table – 3

Period Total Plan size of Karnataka (Rs.Crores)

Funds allocated to PRIs under

Plan (Rs. Crores)

Percentage

Pre - 73rd Amendment Act (1987 – 1997) 22695 4111 18.11

Post- 73rd Amendment Act (1998 – 2008)

109866 14085 12.82

Source: Panchayat Raj Institutions in Karnataka, Empowering Villages, Department of Rural Development and Panchayat Raj, GOK; Finance Department, GOK


425

Figure - 1

Trends in Total Plan Size and Allocation of Plan Funds to PRIs in Karnataka:

02000400060008000

100001200014000160001800020000

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

(Rs.

in C

rore

s)

Total Plan size of Karnataka Funds alloted to PRIs under Plan

Source: Panchayat Raj Institutions in Karnataka, Empowering Villages, Department of Rural Development and Panchayat Raj, GOK; Finance Department, GOK

Best Practices Adopted by Karnataka in Strengthening Panchayat Raj System:

As already stated, Karnataka is pioneering among Indian States in

establishment of local self governments much before the 73rd Constitutional

Amendment made it mandatory. It conducted elections in 1987 itself for

2469 Mandal Panchayats and 19 Zilla Parishads. Karnataka also made

provisions for reservation to women, SCs, STs and Backward Classes. Be

fittingly, Karnataka initiated all appropriate actions to implement the

provisions laid down in the 73rd Constitutional Amendment Act. Best

practices followed by Karnataka on key components of decentralisation are

portrayed below;

One of the most vital features of Panchayat Raj system in Karnataka has

been conduct of regular elections and empowerment of weaker sections of

society including women. It has made reservations for SCs, STs OBCs and

Women not only for getting elected to Panchayats but also for the


426

executive positions i.e., for chairperson and vice-chairperson posts. An

analysis of data of members elected to the 5650 Grama Panchayats in the

recent elections reveals the impact of reservation policy of Karnataka state.

It may be seen from Table-4 and 5 that Karnataka has the unique

distinction of exceeding the constitutional mandate of 33 percent in

providing representation to women. There is a clear visibility of

participation of women in Panchayat Raj system in Karnataka.

Table – 4

Composition of Elected Representatives in Grama Panchayats in Karnataka (2005)

Category General % Women % Total %

SCs 9137 17.54 7860 19.99 16997 18.60

STs 3456 6.64 6424 16.34 9880 10.80

BCs 18527 35.57 11817 30.05 30344 33.20

General 20964 40.25 13217 33.62 34181 37.40

Members 52084 56.98 39318 43.02 91402 Source: Website of Karnataka State Election Commission, GOK

Table – 5

Representation of Women in Panchayat Raj Institutions in Karnataka (2005)

Category Grama

Panchayat %

Taluk Panchayat

% Zilla

Panchayat %

SCs 7860 20 291 19 71 19

STs 6424 16 209 14 39 10

BCs 11817 30 477 31 121 32

General 13217 34 542 38 142 38

Members 39318 43 1519 41 373 37 Source: Panchayat Raj Institutions in Karnataka, Empowering Villages,

Department of RD and PR, GOK


427

Karnataka has assigned all 29 subjects of expenditure items to Panchayat

Raj Institutions as stipulated in the Eleventh Schedule of 73rd

Constitutional Amendment Act. Further, a detailed activity mapping of

the functions assigned to each tier has been done for ensuring role clarity.

With regard to providing functionaries for smooth governance and

implementation of schemes and programmes, Karnataka has deputed large

number of workforce to the Panchayat Raj Institutions.

Ward Sabhas for each constituency in Grama Panchayats and Grama

Sabhas at the Panchayat level have been established for effective and

greater people’s participation in Karnataka. Ward Sabhas and Grama

Sabhas were strengthened by giving several mandatory powers such as

identification and prioritization of beneficiaries for all Government

programmes, approval of developmental plans, generating proposals and

determining priority of schemes, identifying deficiencies in water supply,

locating street light arrangements, promoting adult education and

preventing social evils.

Karnataka has been giving Grama Panchayats more untied funds to make

them perform their functions effectively. In this regard the statutory

development grant to Grama Panchayats has been regularly enhanced since

1993 from rupees one lakh to rupees five lakhs. In order to streamline

fund flow to the Grama Panchayats, effective direct releases of Government

devolutions through banks has been introduced.

As per the Constitutional obligation, Karnataka has regularly constituted

State Finance Commissions to review the financial positions of the

Panchayats. The First Commission was constituted in the year 1994, the

Second Commission was constituted in the year 2000 and the present Third

Commission was constituted in 2006.


428

Karnataka has taken appropriate measures to implement the Right to

Information Act in the Panchayat Raj system also. Measures have been

taken for maintenance of display boards that contain information about

receipt of funds, expenditure incurred, works under taken etc., in the

Panchayat Raj Institutions.

Karnataka has developed a new interactive training programme

transmitted through the satellite centre located at Abdul Nazir Sab State

Institute for Rural Development, Mysore to give thrust to the training of

Panchayat Members which is not adequate.

Constitution of Karnataka Third State Finance Commission:

Article 243[I] and Article 243[Y] of the Constitution [73rd Amendment] Act

1992, envisages Constitution of State Finance Commissions every five

years to review the financial position of the Panchayat and the

Municipalities. Section 267 of the Karnataka Panchayat Act 1993, Section

503-C of the Karnataka Municipal Corporation Act[Amendment] 1994 and

Section 302-B of the Karnataka Municipalities Act [Amendment] 1994 has

made provision for the constitution of State Finance Commission in

accordance with the provision of the 73rd and 74th Amendment to

the Constitution of India. These Sections specify that the State Finance

Commission shall consist of Chairman and two other Members.

Accordingly, In August 2006, Government of Karnataka constituted the

Third State Finance Commission as per the provisions of Article 243(I) vide

Notification No. FD 8 ZPA 2006 dated: August 28, 2006 with the following

members;

1. Shri. A.G.Kodgi B.Sc., LLB, Chairman 2. Dr. Mahendra S. Kanthi Ph.D. Member 3. Shri. T.Thimmegowda, M.A.(Economics) Member

I.A.S.(Retd)


429

Functioning of Karnataka Third State Finance Commission:

The Commission started functioning in all earnestness, despite several

administrative constraints. The Commission, at the outset has designed

different questionnaire for the three tires of Panchayat Raj Institutions

[PRIs], for Urban Local Bodies [ULBs], for the Hon’ble Members of the

Parliament [ from Karnataka] and the Hon’ble Members of the State

Legislature and for Officers at the District level. In addition, the views and

suggestions of the general public and the Non Governmental Organisations

[NGOs] have been sought through a Press Notification.

Lack of Organisational Capacity and Accountability:

Local governments in Karnataka suffer from inadequate organizational

capacity coupled with inept accounting systems. Majority of personnel

managing the Grama Panchayats are unskilled and their financial practices

are rarely checked. Local bodies do not have a information system that can

generate data on cost of providing services and thereby weakening the cost

control and accounting mechanisms. This acts as a “barrier to

benefit – tax-burden” linkage.

Essence of Decentralization and role of State Finance Commissions:

Justice Venkatachalaiah Committee has rightly suggested that the

Panchayats and Municipalities should be categorically declared to be the

institutions of Self Government and exercise functions assigned to them.

The action taken reports of the State Finance Commission’s shall be placed

before the State Legislature within 6 months of the submission of the

report. There is a thinking that State Finance Commission’s role should

only advisory in suggesting measures to be taken by the States to

supplement the Finances of the Local Self Government within the

jurisdiction particularly in the context of heavy pressure on Central


430

finances. This is the complete negation of the 73rd and 74th Constitutional

Amendments wherein the Finance Commission was given the responsibility

to recommend grants to improve Local Government finances more than

only tendering advices. Without recommending grants for the Local Bodies

would be a futile exercise.

Many states including (Karnataka) are trying to undermine the very

significance of Finance Commission. The guidelines suggested by the 12th

Finance Commission and also other State Finance Commissions are

generally ignored by the State Governments. The autonomy at the local

bodies are throttled either by not giving proper finance or not giving

adequate trained personnel. The other constraint is that there is no co-

ordination between elected representatives at various levels. Unhealthy

competition by them to gain more power for themselves has destroyed the

basic tenet of democracy and Local Self Government.

Sir, now I am heading the 3rd Finance Commission with two eminent

members i.e., Dr. Mahendra S. Kanthi, S/o S.R. Kanthi, former Chief

Minister of Karnataka and an expert in the field of Economics and Sri

T.Thimmegowda, a retired I.A.S. officer with vast experience in

administration and in the field of Local Self Government with the

background of Economics. Our main purpose is to strengthen the Village

Panchayats and to suggest the Government to give more autonomy to the

Local bodies. Finance autonomy means release of funds, without any

conditions. Unconditional grants to the local bodies with trained technical

personnel’s are the basic needs for the autonomy to the local bodies. The

essence of decentralization is creating an environment of awareness and

culture of education in Grama Sabha. In a democracy citizens rights come

with responsibilities. Creating an environment of awareness is a pre-

requisite for successful devolution of financial and political power in any


431

society. At present the functions of the local bodies are identified by the

Government and funds are earmarked in the link documents. Even the

technical personnel are appointed by the Government to implement the

works of the local bodies. This is clearly the violation of principles laid

down in the Constitution. At the same time it is also necessary to suggest

ways and means to improve the financial conditions of the local bodies and

make them stand on their own legs. Local bodies must be able to mobilize

their own resources and they must be allowed to prepare their own plans

and appoint the functionaries and provide better quality of service to the

people.

One more important aspect which needs to be addressed by the State

Finance Commission is that door to door household survey to be

undertaken by the Grama Panchayats for the proper identification of

individual beneficiaries and to prepare village level plan scheme. As on

today there is a total confusion in the identification of people below poverty

line for various benefits. Different norms and yardsticks are fixed for

different schemes of central and state governments. It is high time; that

proper norms and yardsticks have to be fixed to identify people below

poverty line for all government schemes of individual benefits. This is the

very essence of Autonomy for the Local Self Government.

Finally Sir, I am concluding my speech with the following important

suggestions and observations for initiating discussions.

CONCLUDING SUGGESTIONS:

1. Significant revenue raising powers need to be assigned to local

governments. This requires restructuring and broadening of the

State Tax System with emphasis on resource mobilization by local

governments.


432

2. Power to employ and determination of salaries, wages etc. of

their employees need to be vested with local governments.

3. Intergovernmental Fiscal Transfers have to be predictable and

transparent to local citizens.

4. Available resources need to be used effectively.

5. Devolution has to be with a greater autonomy to Gram Panchayats

and should be linked to performance.

6. Incentive components to be introduced.

7. There is a need for creation of a separate cadre for services in the

field of Panchayat Raj System. There should be vertical system of

promotion for employees. The posts of Secretaries of Grama

Panchayats need to be upgraded suitably for better administration of

panchayat affairs.

8. Panchayat Raj Institutions should work with Voluntary /Citizens’

Organizations. Their roles are complimentary and can serve as a

catalyst in empowerment and social change.

9. Greater and faster computerization of PRIs is urgently needed.

This will strengthen automation and enhance capacity to deliver

services.

10. “Stree Shakthi” and “Self Help” groups have proven to be credit

worthy and responsible agents of change at the village level. Thus

more financial and technical assistance must be forthcoming to these

clusters of economic change.

11. The State Finance Commission must have a life span of 5

years and complete its research and empirical study. The

Commission should consist of individuals who have experience in

Academic / Research, Panchayat Raj Institutions and those who are


433

involved in Community Service Rural Organizations. The Finance

Commission should have independent powers to monitor the

implementation the Panchayat Raj Schemes and to assure

the scientific disbursement of funds to local Governments.

The Finance Commission should regularly report to the Governor

regarding implementation of Commission’s recommendations.

12. Increase honorarium of elected representatives to cover their

basic needs/ expenses and to strengthen the devolution process.

13. Net-Working amongst Grama Panchayats will increase mobility and

better understanding of each others problems and solutions.

14. Creation of Ombudsman: At the district level, an Ombudsman

system has to be created for the redressal of grievances and to

contain corruption.

15. Last but not least, a regular Audit and its review for Transparency

and Accountability, a system has to be evolved in Panchayat Raj

Institutions and Urban Local Bodies.


434

Annexure – 24

Speech of Sri. A.G. Kodgi, given at Vidyabhavana, Karnataka

Panchayat Parishad and Global Rural Development Institute,

Bangalore.

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«PÉÃA¢æPÀgÀtªÉAzÀÄ sÁ« ÀÄwÛzÉ. C¢üPÁgÀUÀ¼ÀÄ vÀªÀÄä C¢üPÁgÀPÉÌ ZÀÄåw §gÀzÀAvÉ JZÀÑjPÉ¬ÄAzÀ

C¢üPÁgÀ ZÀ ÁªÀuÉAiÀÄ°è «PÉÃA¢æPÀgÀt ¹zÁÝAvÀªÀ£ÀÄß PÁtÄwÛzÁÝgÉ. ZÀÄ£Á¬ÄvÀ ¥Àæw¤¢üUÀ¼ÀÄ C¢üPÁgÀ

ªÀiÁvÀæ vÀªÀÄVgÀ°, ºÉÆuÉUÁjPÉ ÉÃgÉÆ§âjVgÀ° J£ÀÄßªÀ zsÉÆÃgÀuÉ vÁ¼ÀÄwÛzÁÝgÉ. EzÀjAzÁV

¥ÀAZÁAiÀÄvï gÁeï UÉÆAzÀ®zÀ UÀÆqÁVzÉ. EzÀPÉÌ £ÁªÉ®ègÀÆ ºÉÆuÉUÁgÀgÀÄ. M§âgÀ ªÉÄÃ ÉÆ§âgÀÄ

PÉ ÀgÀÄ JgÀZÀÄvÁÛ §gÀÄªÀÅzÀjAzÀ CxÀªÁ J¯Áè «µÀAiÀÄUÀ¼À£ÀÄß gÁdQÃAiÀÄ zÀÈ¶ÖPÉÆÃ£À¢AzÀ

£ÉÆÃqÀÄªÀÅzÀjAzÀ ÀªÀÄ ÉåUÉ ¥ÀjºÁgÀ ¹UÀÄwÛ®è.

EzÀPÉÌ ¥ÀjºÁgÀªÉAzÀgÉ:-

1) gÁdå ¸ÀPÁðgÀ ¸ÀA¥ÀÆtð C¢üPÁgÀ ºÁUÀÆ DqÀ½vÀ «PÉÃA¢æPÀgÀt ¹zÁÝAvÀPÉÌ ¹zÀÞ

DUÀÄªÀÅzÀÄ ªÀÄvÀÄÛ EzÀgÀ C£ÀÄµÁ×£ÀPÀÌ£ÀÄUÀÄtªÁV ¥ÀAZÁAiÀÄvï gÁeï ÀA ÉÜUÀ½UÉ

ºÀtPÁ¹£À ¥ÀÆgÉÊPÉUÉ C£ÀÄPÀÆ® PÀ°à ÀÄªÀÅzÀÄ.

2) C¢üPÁjUÀ¼ÀÄ C¢üPÁgÀ ZÀ ÁªÀuÉ ªÀÄgÉvÀÄ d£ÀgÀ »vÀ zÀÈ¶Ö¬ÄAzÀ ««zsÀ AiÉÆÃd£ÉUÀ¼À£ÀÄß

C£ÀÄµÁ×£ÀPÉÌ vÀgÀÄªÀ ¥ÀæªÀÄÄR dªÁ¨ÁÝjAiÀÄ£ÀÄß ªÀ» À ÉÃPÀÄ.


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3) J¯Áè ºÀAvÀUÀ¼À d£À ¥Àæw¤¢üUÀ¼ÀÄ vÀªÀÄä PÁAiÀÄðPÉëÃvÀæ, PÀvÀðªÀå ºÁUÀÆ ºÉÆuÉUÁjPÉAiÀÄ£ÀÄß

CjvÀÄ PÁAiÀÄð ¤ªÀð» À ÉÃPÀÄ ªÀÄvÀÄÛ E£ÉÆßAzÀÄ ºÀAvÀzÀ d£À ¥Àæw¤¢üUÀ¼À PÁAiÀÄðPÉëÃvÀæ

ºÁUÀÆ ºÉÆuÉUÁjPÉAiÀÄ ªÉÄÃ É ºÀ ÀÛPÉëÃ¥À ªÀiÁqÀÄªÀÅzÀgÀ §zÀ®Ä ÀºÀPÁgÀ ¤ÃqÀ ÉÃPÀÄ.

4) ¥ÀæeÁÕªÀAvÀ ªÀÄvÀzÁgÀgÀÄ JZÉÑvÀÄÛ eÁUÀgÀÆPÀvÉ¬ÄAzÀ F ªÀåªÀ ÉÜ ªÉÄÃ É ºÀvÉÆÃn

EqÀ ÉÃPÀÄ. DzÀgÉ EzÉ®èªÀÇ ºÉÃUÉ ¸ÁzsÀå J£ÀÄßªÀ ªÀÄºÀvÀézÀ ¥Àæ±Éß GzÀãªÀªÁUÀÄvÀÛzÉ. 15

ªÀµÀðUÀ¼À £ÀAvÀgÀªÀÇ £Á«£ÀÆß «PÉÃA¢æPÀgÀt ¹zÁÝAvÀªÀ£ÀÄß ÀA¥ÀÆtðªÁV M¦àPÉÆ¼Àî®Ä

¸ÁzsÀåªÁV®è.

««zsÀ ºÀAvÀzÀ ¥ÀAZÁAiÀÄvï gÁeï ÀA ÉÜUÀ¼À°è £ÀÆå£ÀvÉUÀ¼ÀÄ EªÉ. CzÀPÉÌ ¥ÀjºÁgÀªÀÇ EzÉ.

¥ÀAZÁAiÀÄvï gÁeï ÀA ÉÜUÀ¼À°è £ÀÆå£ÀvÉAiÀÄ, ÀªÀÄ¸ÉåUÀ¼À CjªÀÅ E®è¢zÀÝ°è ¥ÀjºÁgÀ ¸ÁzsÀåªÁUÀ ÁgÀzÀÄ.

F »£Éß ÉAiÀÄ°è, PÉ®ªÀÅ £ÀÆå£ÀvÉ, ÀªÀÄ ÉåUÀ¼À£ÀÄß ºÁUÀÆ CzÀPÉÌ ¥ÀjºÁgÀUÀ¼À£ÀÄß PÀÆqÀ vÀªÀÄä ªÀÄÄA¢qÀ®Ä

EaÒ ÀÄvÉÛÃ£É.

UÁæªÀÄ ¥ÀAZÁAiÀÄvï:

£Á£ÀÄ PÀAqÀAvÉ ºÉaÑ£À UÁæªÀÄ ¥ÀAZÁAiÀÄvÀÄUÀ¼ÀÄ vÀªÀÄä dªÁ¨ÁÝjAiÀÄ£ÀÄß CjvÀÄ PÁAiÀÄð

¤ªÀð» ÀÄwÛ®è¢gÀÄªÀÅzÀÄ UÀªÀÄ£ÀPÉÌ §A¢zÉ ªÀÄvÀÄÛ EzÀPÉÌ ¥ÀjºÁgÀ PÀAqÀÄPÉÆ¼Àî ÉÃPÁVzÉ.

1. ªÁqï À sÉ /UÁæªÀÄ À sÉUÀ¼ÀÄ ÀjAiÀiÁV, ªÀåªÀ¹ÜvÀªÁV dgÀÄUÀ ÉÃPÀÄ.

2. ªÁqïð À sÉ/UÁæªÀÄ À sÉUÀ¼À°è PÁAiÀÄðPÀæªÀÄUÀ¼ÀÄ, AiÉÆÃd£ÉUÀ¼À ¥ÀnÖ ¹zÀÞ DUÀ ÉÃPÀÄ.

3. PÁ®PÁ®PÉÌ QæAiÀiÁ AiÉÆÃd£ÉUÀ¼ÀÄ vÀAiÀiÁgÁUÀ ÉÃPÀÄ.

4. ¥sÀ Á£ÀÄ sÀ«UÀ¼À DAiÉÄÌ ªÁqïð À sÉAiÀÄÀ°è ÀjAiÀiÁV DUÀ ÉÃPÀÄ.

5. ¤ªÉÃ±À£À ºÁUÀÆ ªÀ Àw gÀ»vÀgÀ £ÉÊd ¥ÀnÖ ªÁqïð À sÉUÀ¼À°è ¹zÀÞªÁUÀ ÉÃPÀÄ,

6. C£ÀÄzÁ£À ÀzÀâ¼ÀPÉ ÀjAiÀiÁV DUÀ ÉÃPÀÄ.

7. vÉjUÉ ªÀ ÀÆ®Ä, ¤Ãj£À PÀgÀ ÀªÀÄ¥ÀðPÀªÁV DUÀ ÉÃPÀÄ.

8. ÀA¥À£ÀÆä® «PÉÃA¢æPÀgÀtzÀ°è D ÀQÛ ªÀ» À ÉÃPÀÄ.

CzÉÃ jÃwAiÀÄ°è f¯Áè ¥ÀAZÁAiÀÄvï ºÁUÀÆ vÁ®ÆèPÀÄ ¥ÀAZÁAiÀÄwÛ£À®Æè PÀÆqÀ C£ÉÃPÀ

jÃwAiÀÄ £ÀÆå£ÀvÉUÀ¼ÀÄ PÀAqÀÄ §A¢ªÉ.


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UÁæªÀÄ ¥ÀAZÁAiÀÄvÀÄUÀ¼À PÁAiÀÄð¤ªÀðºÀuÉAiÀÄ ªÉÄÃ°éZÁgÀuÉ ªÀiÁqÀ ÉÃPÁzÀ vÁ®ÆèPÀÄ

¥ÀAZÁAiÀÄvÀÄ ªÀÄvÀÄÛ f¯Áè ¥ÀAZÁAiÀÄvÀÄ vÀªÀÄä PÀvÀðªÀåªÀ£ÀÄß ÀjAiÀiÁV, vÀÈ¦ÛPÀgÀªÁV ¤ªÀð» ÀÄwÛ®è

JA§ÄzÀÄ UÀªÀÄ£ÀPÉÌ §A¢zÉ.

vÁ®ÆèPÀÄ ¥ÀAZÁAiÀÄvÀÄUÀ¼ÀÄ PÉÃªÀ® ÀPÁðgÀzÀ KeÉAmïgÁV PÉ® À ªÀiÁqÀÄwÛzÁÝgÉ JA§

sÁªÀ£É¬ÄzÉ. F »£Éß ÉAiÀÄ°è, vÁ®ÆèPÀÄ ¥ÀAZÁAiÀÄvÀÄUÀ½UÉ ºÉaÑ£À C£ÀÄzÁ£À, C¢üPÁgÀ ºÁUÀÆ

PÁAiÀÄðPÀæªÀÄUÀ¼À£ÀÄß ªÀ» ÀÄªÀÅzÀgÀ ªÀÄÆ®PÀ §®¥Àr ÀÄªÀÅzÀÄ CUÀvÀå«zÉ.

1) f¯Áè ¥ÀAZÁAiÀÄvÀÄUÀ¼À ªÉÄÃ É ªÀåªÀ¹ÜvÀªÁzÀ ªÉÄÃ°éZÁgÀuÉ ªÀiÁqÀÄªÀÅzÀgÀ ªÀÄÆ®PÀ F

ÀªÀÄ ÉåUÉ ¥ÀjºÁgÀ PÀAqÀÄPÉÆ¼Àî ÉÃPÀÄ.

2) ªÉÄÃ°éZÁgÀuÉUÁV MAzÀÄ vÀ¤SÁ vÀAqÀªÀ£ÀÄß gÀZÀ£É (Ombudsmen) ªÀiÁqÀÄªÀÅzÀgÀ

ªÀÄÆ®PÀ F MAzÀÄ ªÀåªÀ ÉÜ ¤«ðWÀßªÁV PÁAiÀÄð ¤ªÀð» ÀÄªÀAvÉ ªÀiÁqÀ ÉÃPÁVzÉ.

3) ¸ÀPÁðgÀ, C¢üPÁjUÀ¼ÀÄ ºÁUÀÆ C¢üPÁgÀgÉÃvÀgÀ ªÀÄvÀÄÛ d£À ¥Àæw¤¢üUÀ¼ÀÄ ¥ÀAZÁAiÀÄvï

gÁeï ªÀåªÀ ÉÜAiÀÄ°è C£ÀªÀ±ÀåPÀ ºÀ ÀÛPÉëÃ¥À ªÀiÁqÀÄªÀÅzÀÄ ÀÆPÀÛªÀ®è. ÀPÁðgÀ CUÀvÀå«gÀÄªÀ

C£ÀÄzÁ£ÀUÀ¼À£ÀÄß PÁ®PÁ®PÉÌ ©qÀÄUÀqÉ ªÀiÁr, C£ÀÄóµÁ×£Á¢üPÁjUÀ¼ÀÄ PÀvÀðªÀåªÀÄvÀÄÛ

ºÉÆuÉUÁjPÉ¬ÄAzÀ PÉ® À ªÀiÁqÀÄªÀAvÉ ÀÆPÀÛ PÀæªÀÄ PÉÊUÉÆ¼Àî ÉÃPÀÄ.

4) d£À ¥Àæw¤¢üUÀ¼ÀÄ ¥ÀAZÁAiÀÄvï gÁeï ªÀåªÀ ÉÜUÉ ¥ÀÆgÀPÀªÁV ªÀiÁUÀðzÀ±Àð£À ¤ÃqÀ ÉÃPÀÄ

gÁdå ªÀÄlÖzÀ ¥ÀAZÁAiÀÄvï gÁeï C¢üPÁjUÀ¼ÀÄ PÉ¼ÀV£À ºÀAvÀzÀ C¢üPÁjUÀ½UÉ

ªÀiÁUÀðzÀ±Àð£À ¤ÃqÀÄªÀÅzÀÄ ªÀÄvÀÄÛ CªÀgÀ PÉ®¸À PÁAiÀÄðUÀ¼À ÀÆPÀÛ ªÉÄÃ°éZÁgÀuÉAiÀÄ£ÀÄß

£ÀqÉ ÀÄªÀÅzÀgÀ ªÀÄÆ®PÀ ¥ÀAZÁAiÀÄvï gÁeï ªÀåªÀ ÉÜAiÀÄ AiÀÄ±À¹ìUÉ PÁgÀtgÁUÀ ÉÃPÀÄ.

¥ÀAZÁAiÀÄvï gÁeï ªÀåªÀ ÉÜAiÀÄ°è PÉ®ªÉÇAzÀÄ £ÀÆå£ÀvÉUÀ¼ÀÄ EzÀÝgÀÆ PÀÆqÀ PÁ£ÀÆ£ÀÄ§zÀÞªÁV

ªÀ»¹PÉÆnÖgÀÄªÀÀ dªÁ¨ÁÝj, ºÉÆuÉUÁjPÉUÀ¼À£ÀÄß, C¢üPÁgÀUÀ¼À£ÀÄß ªÀåªÀ¹ÜvÀªÁzÀ jÃwAiÀÄ°è ZÀ Á¬Ä¹

ªÀiÁUÀðzÀ±Àð£À ¤ÃqÀÄªÀÅzÀgÀ ªÀÄÆ®PÀ J¯Áè ÀªÀÄ ÉåUÀ½UÉ ¥ÀjºÁgÀ PÀAqÀÄPÉÆ¼Àî ÉÃPÁVzÉ.

²ÃvÀ DVzÉ JA§ PÁgÀtPÉÌ ªÀÄÆUÀ£ÀÄß PÉÆAiÀÄÄÝPÉÆ¼ÀÄîªÀ ªÀåªÀ ÉÜ Àj E®è. F »£Éß ÉAiÀÄ°è

¥ÀAZÁAiÀÄvï gÁeï ÀA ÉÜUÀ½UÉ dªÁ¨ÁÝj ºÁUÀÆ C¢üPÁgÀªÀ£ÀÄß ªÉÆlPÀÄUÉÆ½ ÀÄªÀÅzÀÄ ÀjAiÀÄ®è,

ªÀiÁvÀæªÀ®èzÉÃ EzÀÄ ÀA«zsÁ£ÀPÉÌ «gÀÄzÀÞªÁUÀÄvÀÛzÉ.

PÉÆ£ÉAiÀÄzÁV, MAzÀÄ ªÀiÁvÀÄ K£ÉAzÀgÉ PÀ£ÁðlPÀzÀ°è ¥ÀAZÁAiÀÄvï gÁeï ªÀåªÀ ÉÜ

§®¥Àr ÀÄªÀÅzÀÄ ¥ÀæeÁ¥Àæ sÀÄvÀé G½«UÉ CUÀvÀå ªÀÄvÀÄÛ EzÀÄ £ÀªÉÄä®ègÀ PÀvÀðªÀå.


439

Douments and Reports referred to by the Third State Finance Commission

1. Constitution of India.

2. Karnataka Panchayat Raj Act, 1993.

3. Karnataka Municipalities Act, 1964.

4. Karnataka Municipal Corporations Act, 1976.

5. Budget Documents 2002-03 to 2008-09, Finance Department.

6. Census Report of 2001.

7. Report of 12th Central Finance Commission (November, 2004).

8. Report of First State Finance Commission of Karnataka (1996) relating to Urban Local Bodies.

9. Report of First State Finance Commission of Karnataka (1996) relating to Panchayat Raj Institutions.

10. Report of Second State Finance Commission of Karnataka (December, 2002)

11. Report of Karnataka Administrative Reforms Commission (2001).

12. Report of High Power Committee for Redressal of Regional Imbalances, GOK (June, 2002).

13. Report of Second State Finance Commission of West Bengal (2002).

14. Report of Third State Finance Commission of Kerala (November, 2005).

15. Medium Term Fiscal Plan [MTFP] for Karnataka 2006-10, Finance Department, GOK (2006).

16. Medium Term Fiscal Plan [MTFP] for Karnataka 2008-12, Finance Department, GOK (2008).

17. Annual Plan 2008-09, Planning Department, GOK (August, 2008).

18. Accounts Reckoner for 1998-2007, Finance Department, GOK (November, 2007).

19. Karnataka Development Report, Planning Commission, GOI (2007).

20. Fiscal Decentralisation to Rural Governments in the State of West Bengal- Analysis and Reform Options (June, 2007).


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21. Empowering Villages, Panchayat Raj Institutions in Karnataka, RDPR Department, GOK

22. Dr.G.Narendra Kumar, Decentralisation and Local Finance Issues in India.

23. M.Devendra Babu, Finances of Panchayats in Karnataka: A Policy Paper (2004).

24. M.Devendra Babu, Fiscal Decentralisation: A Study of Karnataka State (2007).

25. M.Devendra Babu, Report of the Karnataka State Finance Commission: Status and Implications, The Indian Journal of Economics (January, 2002)


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