Finance Commission released grants for Uttar Pradesh
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Finance Commission released grants for Uttar Pradesh

Context:

The Union Government has released the second installment of the Fifteenth Finance Commission (XV FC) Grants for Rural Local Bodies in Uttar Pradesh and Andhra Pradesh for the financial year 2024–25.

  • In Uttar Pradesh, Rs. 1598.80 crores have been allocated to 75 District Panchayats, 826 Block Panchayats, and 57,691 Gram Panchayats. In Andhra Pradesh, Rs. 420.9989 crore has been released for 13,097 Gram Panchayats, 650 Block Panchayats, and 13 District Panchayats, along with a withheld amount of Rs. 25.4898 crore from the first installment.
  • The Ministry of Panchayati Raj and Jal Shakti recommend these grants, which the Ministry of Finance then releases.
  • The funds are categorized into Untied Grants, which can be used for specific local needs and Tied Grants, which are restricted to sanitation, water supply, and waste management.
  • The goal is to empower Panchayati Raj Institutions (PRIs) and Rural Local Bodies (RLBs) to address local issues, except for administrative costs like salaries.
  • This initiative is part of the government’s effort to strengthen grassroots democracy and local governance, in line with the vision of inclusive growth and self-reliant villages contributing to the nation’s development.

Finance Commission

  • The Finance Commission is constituted by the President under Article 280 of the Constitution, mainly to give its recommendations on the distribution of tax revenues between the Union and the States and amongst the States themselves. Two distinctive features of the Commission’s work involve redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the center and the States respectively and equalization of all public services across the States.

The functions of the Finance Commission

  • The Commission has to make recommendations to the President as to—  
  • the distribution between the Union and the States of the net proceeds of taxes which are to be, or maybe, divided between them and the allocation between the States of the respective shares of such proceeds; 
  • the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
  • the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State based on the recommendations made by the Finance Commission of the State;
  • the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State based on the recommendations made by the Finance Commission of the State;
  • any other matter referred to the Commission by the President in the interests of sound finance.
  • The Commission determines its procedure and have such powers in the performance of their functions as Parliament may by law confer on them.
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