ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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A Critique of the Fifteenth Finance Commission

This article analyses the conditions imposed by the central finance commissions on the release of grants to local bodies in the past and assesses the difficulties that they will face to draw the entire grants recommended to them during the Fifteenth Finance Commission period.

Central Grants for Local Bodies

During the decade of the 1990s, it was realised that without constitutional recognition, self-govern­ment cannot be a reality. Therefore, the 73rd and 74th Constitutional Amendments Act were passed in 1992, which formally established local bodies as the third tier of governance in India. The local bodies of governance are broadly classified into two categories—rural local bodies (RLBs) and urban local bodies (ULBs). These institutions look after the local planning, development, and administration of an area or small community such as villages, towns, or cities. In order to improve performance, accountability, and credibility of the local bodies, constitutional provisions under Article 243 (A to O) for RLBs and Article 243 (P to ZG) for ULBs were inserted to specify the governance structure and devolve functions and sources of finance and mandate the appointment of independent institutions like the state finance commissions (SFCs) to enable decentralised administrative, political and fiscal governance in the country.

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Updated On : 4th Dec, 2022
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