Finance Commission for Panchayats, ULBs

Finance is the backbone of any institution without which even conceiving their survival is impossible. It is equally unquestionable that there should be clarity and transparency in matters dealing with finance, how and wherefrom the sustained source of funds was managed and how it was spent as also on which of the priorities. Panchayats and Urban Local Bodies are no different , in fact, thrust being on their more empowerment and an autonomy in their functions being grass root level democratic institutions, setting up of Finance Commission for them to deal with financial matters has been ensured legislatively too . It is , however, not comprehended as to why despite there being a law already made in the year 2011 in the State, Finance Commission has not been set up . In fact, it is an exercise to be conducted mandatorily once in five years. Its importance needs to be seen, now as never before in the context of releasing of massive funds by the Central Government to these institutions. The significance of the legislation , it is worth noting, can be seen that there would be no change whatsoever as the application and the enforceability of the relevant Act would remain unchanged even under the status of the Jammu and Kashmir now being a union territory.
How can , in the absence of a mechanism having sufficient powers , it be decided as to how the net proceeds of taxes, duties, tolls and fees etc levied by the State from time to time be distributed between the State and the Panchayats and Municipalities which can best be decided by a duly constituted Finance Commission . Again, how could the issue of improving the financial base of these grass root institutions be ensured in the absence of a Financial Commission, perhaps, has not impressed the State authorities so as to feel the need of giving practical shape to the Act which has been passed eight years ago in this regard. Laws are made to provide not only a strong mechanism for whatever issues they are enacted but also to implement and follow them. In the instant case, the same has been conveniently treated as absolutely optional. The issue assumes its own importance following formal elections to these basic and grass root democratic institutions which were held late last year in the State.
We are unable to understand the reasons behind an apparent lackadaisical approach of the concerned State administration towards this matter especially when we are unexpectedly observing that even preliminary preparations or some formal discussions on setting into motion constituting of Finance Commission is nowhere to be seen. State Housing and Urban Development Department and Rural Development Department should have been otherwise enthusiastic about the issue but they appear to be least concerned as the practice mostly followed in the administrative system is that unless the things came down from “the higher ups” very pressingly and was followed up thereafter, nothing moves let alone initiated from the Departments. The entire approach not only goes contrary to the aim of empowering Panchayats and the Local Urban Bodies but is tantamount to undermining the vision of the Prime Minister and his thrust on the subject matter , that of strengthening the grass root institutions especially when seen in the context of the PM’s assurances given to the representatives of Panchayats from Jammu and Kashmir who had met him in the recent past.
We hope that under the changed scenario vis-a-vis, Jammu and Kashmir which is also aimed at bringing considerable changes in the style and manner of attending to administrative matters, the Commission would be formed , now, without any loss of further time and there being sufficient talent available in the State as regards the eligibility of the Chairperson for the said Commission, the matter would be resolved , all in the interests of the Panchayats and the ULBs.