CM directs focus on financial empowerment of local bodies
Chief Minister N Chandrababu Naidu at a meeting on Panchayat Raj, Rural Development at the Secretariat on Wednesday
Dy CM orders audit of property tax collections
Vijayawada: Chief Minister N Chandrababu Naidu has emphasised that local bodies must not just rely on financial support from the Central and State governments but actively generate their own revenue streams to achieve rapid development.
Speaking at a meeting with the members of the 5th State Finance Commission here on Wednesday, he ordered that financially weak local bodies catering to areas with low per capita income be categorised to enable targeted assistance.
While echoing this, Deputy Chief Minister Pawan Kalyan instructed officials to complete the process of classification of local bodies within a fixed timeframe. Officials informed him that this would require legal amendments. The State Finance Commission presented its recommendations to the Chief Minister for the period of 2025-29, focusing on both financial and non-financial measures to strengthen local governance. The Commission placed on record that Andhra Pradesh faces significant financial challenges. For the 2023-24 fiscal year, the state's expenditure on salaries, pensions, and interest payments was 111 percent of its own revenue. The Commission's report revealed a projected resource gap of Rs 7,033 crore for Panchayat Raj institutions and Rs 2,016 crore for urban local bodies for the 2025-29 period.
The report also highlighted a major disparity between property tax demand and collection. Additionally, it revealed that the previous government left an outstanding electricity bill of Rs 5,851.58 crore for gram panchayats as of June 2024.
Chief Minister Naidu outlined a strategy to consolidate funds from various sources, including those under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), to assess the operational needs of panchayats. He stated that this would help in formulating specific policies to strengthen them. While acknowledging the significant funds coming from the Centre for employment programs, he stressed the importance of ensuring that these funds are utilised properly to create tangible assets.
"Local bodies must strive for self-sufficiency," the Chief Minister said, while advising officials to explore new revenue streams for urban local bodies as well. He suggested that the state could increase its matching grants to those of Central Finance Commission to help local bodies utilise them more effectively. At the same time, he said, the government has a responsibility to support socio-economically disadvantaged local bodies. Naidu also called for greater accountability, urging elected representatives to responsibly use funds as they are the first point of contact for citizens. Deputy Chief Minister Pawan Kalyan instructed officials to conduct an audit of property tax collections and assess outstanding dues in respect of local bodies from 2019 to 2024. He directed them to digitise all tax payment details to ensure transparency. He called for a comprehensive study on the poultry industry in villages to establish a policy that benefits both residents and businesses.
The meeting was attended by State Finance Commission Chairperson Ratnakumari, members Prasad Rao and Krupa Rao, along with senior officials from the Finance, Panchayat Raj, and Municipal departments.
