Fourth Finance Commission of Rajasthan
The Fourth Finance Commission of Rajasthan, constituted under Article 243-I of the Constitution of India, played a crucial role in recommending principles governing the distribution of financial resources between the state government and the local bodies (Panchayati Raj Institutions and Urban Local Bodies). This commission’s recommendations were pivotal in empowering local self-governance and ensuring more equitable development across the state.
The Commission was established with the mandate to review the financial position of the Panchayats and Municipalities and to make recommendations on the principles that should govern:
- The distribution between the State and the Panchayats and Municipalities of the net proceeds of the taxes, duties, tolls, and fees leviable by the State, which may be divided between them and the allocation of such proceeds between the Panchayats and Municipalities at all levels.
- The determination of the taxes, duties, tolls, and fees which may be assigned to or appropriated by the Panchayats and Municipalities.
- Grant-in-aid to the Panchayats and Municipalities from the Consolidated Fund of the State.
- Measures needed to improve the financial position of the Panchayats and Municipalities.
- Any other matter referred to the Commission by the Governor in the interest of sound finance of the Panchayats and Municipalities.
Key recommendations of the Fourth Finance Commission likely focused on increasing the devolution of funds to local bodies. This aimed to address the developmental needs at the grassroots level more effectively. The commission probably suggested enhancing the share of state taxes devolved to Panchayats and Municipalities, enabling them to undertake various development programs and infrastructure projects independently. Further, the commission most likely emphasized the need for capacity building within local bodies, allowing them to manage their finances effectively and ensure transparent and accountable governance.
The recommendations likely touched upon the following:
- Formula for Devolution: A specific formula for distributing the devolved funds between different tiers of Panchayats (Gram Panchayat, Panchayat Samiti, Zila Parishad) and various categories of Municipalities based on factors such as population, area, backwardness, and revenue mobilization.
- Grant-in-Aid: Recommendations regarding specific purpose grants to address particular issues or gaps in local body finances, potentially focusing on areas like sanitation, water supply, and infrastructure development.
- Taxation Powers: Suggestions on expanding the taxation powers of Panchayats and Municipalities, giving them greater autonomy in generating their own revenue sources. This might have included recommendations on property taxes, entertainment taxes, and other local levies.
- Financial Discipline: Measures to ensure financial discipline and accountability in the management of funds by local bodies, including recommendations on auditing, accounting practices, and budget preparation.
- Resource Mobilization: Strategies for improving resource mobilization by Panchayats and Municipalities through better tax collection, efficient user charges, and exploring other revenue-generating avenues.
The implementation of the Fourth Finance Commission’s recommendations had a significant impact on the financial health and functional autonomy of local bodies in Rajasthan. By increasing the flow of funds to the grassroots level, the commission played a critical role in strengthening local self-governance and promoting inclusive and sustainable development throughout the state.