No data on revenue; SFC in a fix over spending of RLBs

​Hyderabad: With no database on the revenue and expenditure of rural local bodies is available, the State Finance Commission has been finding it difficult to understand their finances and is depending on the records of Panchayat Raj Institutions (PRI) offices.

The Gram Panchayat, Mandal Parishad and Zilla Parishad officials are preparing the revenue and expenditure details and sending it to the SFC to create a data base. The SFC may require a lot of time to process the information and to assess the financial condition of PRIs and make its recommendations.

The State government has formed the SFC in December last year and B Rajesam Goud has been appointed as its Chairman. The Commission began its work recently and has been looking for the data.

The objective of the SFC is to determine the formula for devolution of funds between the State government and rural local bodies. The SFC decides the part of the tax revenue of the State to go to the PRIs and urban local bodies. It evolves a formula which is prepared on the basis of revenue and expenditure of local bodies. It decides the per capita fund to be given to the municipalities and gram panchayats.

The SFC needs a database to examine the revenue and expenditure patterns of local bodies. It needs the particulars of grants received by the Gram Panchayats, Mandal Parishads and Zilla Parishads from the State and Centre. It also needs the revenue collected by the local bodies. The data of funds being given by the State government in other forms is also required.

The details of expenditure like salary bills, spending on development works, maintenance and requirement in the near future should be with the SFC to assess the financial requirements of the rural bodies.

However, the database was not built in the past few years and there is no consolidated information with the State government. With this, the SFC asked the officials of local bodies to compile the data and send the same to it.
Absence of records of revenue and expenditure in rural local bodies was also pointed out by the Comptroller and Auditor General of India. The official audit institution said that the records were not maintained properly.

In its previous observations, the CAG said that records such as cash books, assets register, advance registers, stock registers etc., are to be maintained as per the provisions of Panchayat Raj Act, 1994 in respect of Zilla Parishads and Mandal Parishads and for gram panchayats as per GP accounts manual of Panchayat Raj and Rural Development department. Scrutiny of records of PRIs in 2015 revealed improper maintenance of cash book in 520 PRIs, non-maintenance of stock registers in 1921 PRIs and non-maintenance of asset register in seven 22 PRIs.

The State government released Eleventh and Twelfth Finance Commission grants amounting to Rs 67.37 crore to Commissioner Panchayat Raj of composite State of Andhra Pradesh for creation of database on finances of PRIs. Of this, 14.03 crore was allocated to Telangana and transferred to Commissioner Panchayat Raj, Telangana.

The State government is yet to devise a system for obtaining a consolidated picture about the finances of the PRIs. The State government devolved 10 out of 29 subjects listed in Eleventh Schedule to 73rd Constitutional Amendment Act, 1992. Of these, funds relating to only four departments (Agriculture, Animal Husbandry, Backward Classes Welfare and Fisheries) were released to PRIs.

In a recent meeting on the functioning of PRIs, Minister Jupally Krishna Rao expressed dissatisfaction over no preparation of database for the PRIs. The officials said that the software was under preparation and would be provided soon with all the activities of rural bodies put online.