Karnataka Government Moves to Boost Local Body Finances and Governance

The Karnataka government will take steps to improve the financial position of gram panchayats and strengthen decentralised governance, Chief Minister D.K. Shivakumar announced on Wednesday in Bengaluru.

Committee and Funds

Chairing a meeting of the Karnataka State Decentralisation Planning and Development Committee, the Chief Minister stated that a committee led by the Rural Development and Panchayat Raj Minister will examine the Fifth State Finance Commission recommendations on fund allocation and administrative reforms to submit a report on what can be implemented. Under this commission's report, ₹1,261 crore has been released to gram panchayats, ₹557 crore to taluk panchayats, and ₹183 crore to zilla panchayats.

Urban and Rural Plans

The government will also improve urban local bodies based on the 74th Constitutional Amendment, consulting experts from the National Law School of India University on law changes. Urban bodies will plan development through ward sabhas like gram sabhas, while district, taluk, and village planning committees must meet once every three months and submit reports. Officials must frame guidelines for the 'People's Plan' from the State Budget to include grassroots public needs, build software, and fund planning management units at district and taluk levels. All departments must submit responsibility maps for panchayat-related programmes on time.

GST and Taxes

To address local body finances further, the government will propose a share in GST revenue to the GST Council and seek a proposal for a Karnataka Panchayat Administrative Service from the concerned minister. Officials must also speed up the demarcation of gram thana boundaries using data from the Centre's SVAMITVA scheme through the Panchayat Raj and Revenue departments. Furthermore, to address lost revenue after the Karnataka Industrial Areas Development Board took over industry tax powers, officials must submit details of total tax collected and the amount shared with gram panchayats, given that the law mandates a 30% property tax share.

Context

Decentralised governance in India relies on local bodies like gram, taluk, and zilla panchayats to manage rural development and public services directly at the grassroots level. State finance commissions periodically review these bodies to recommend fair fund sharing and administrative improvements, helping local councils address community needs more effectively.