The Hindu : Andhra Pradesh / Hyderabad News : State Finance Commission to be reconstituted

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Tuesday, Jun 21, 2011
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Andhra Pradesh

Andhra Pradesh - Hyderabad

State Finance Commission to be reconstituted

Special Correspondent

Chief Minister promises to clear arrears due to local bodies under local taxes and seigniorage

Roads to be black-topped in mandals at a cost of Rs. 250 crore to Rs. 300 crore
Special recruitment to fill 7,565 out of 15,000 panchayat secretary posts

HYDERABAD: Addressing a major problem of the cash-strapped panchayat raj institutions, Chief Minister N. Kiran Kumar Reddy has given a commitment to reconstitute the State Finance Commission (SFC) as per the recommendations of the 13th Finance Commission and to clear the arrears due to them under local taxes like profession tax and seigniorage.

Once reconstituted, the SFC will make proposals to ensure proper transfer of funds to these local bodies. The commitment by the Chief Minister came out at a high-level meeting convened by him here on Monday on issues of these institutions which was attended by Panchayat Raj Minister K. Jana Reddy, department's principal secretary Rajiv Sharma and other top officials.

Mr. Kiran Kumar Reddy said the freeze on release of arrears would be lifted partially and 30 to 40 per cent of the dues to Panchayat Raj institutions would be released immediately to meet their urgent requirements. The balance amount would be provided in phases.

The seigniorage dues would have to be released to zilla parishads, mandal parishads and gram panchayats in 25:50:25 ratio. Officials told the Chief Minister that the recent buoyancy in professional tax collection was not properly reflected in the budgetary allocations to panchayat bodies. Their allocations remained static for four years now.

Briefing reporters later, Mr. Jana Reddy said the freeze imposed on release of arrears to the local bodies should not be misconstrued as an attempt to undermine these institutions and attributed the delay to the government's strict adherence to financial discipline.

He said the pending dues towards honorarium to elected representatives of panchayat raj bodies, amounting to Rs. 32 crore, would be released now and the pending bills against the works completed under a programme taken up before the elections with the allotment of Rs. 90 to each mandal, cleared. Roads would be black-topped in mandals at a cost of Rs. 250 crore to Rs. 300 crore.

He said special recruitment would be undertaken to fill 7,565 out of 15,000 panchayat secretary posts. He disclosed that extension officers would be appointed for Assembly constituencies for liaison between the panchayat secretaries and officials and achieve coordination to implement welfare and developmental schemes.

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