15th Finance Commission outlines procedure to allocate grants to ULB’s

PUNE: The meeting between the 15^th Finance Commission with the officials of the Reserve Bank of India on a high note for the Urban Local Bodies (ULBs) across the nation. The Finance Commission had previously discussed giving more financial freedom to the panchayats and ULBs and moves forward with a new plan of action for the performance based grants for the ULBs. The new outline for the grant disbursal to the ULB would be designed by the state government concerned and will be subjected to a pre-established eligibility criterion.

The FC had previously allocated Rs 87,143 crores for the ULB’s for the five-year period of 2015-2020. 80 per cent of the aforementioned amount is reserved for the basic grants while the rest is the performance grant.

In order for a ULB to be eligible for the performance grant, it will have to submit an audited annual account that relate to a year not earlier than two years preceding to the year during which it seeks the performance (in order to gauge the improvements made in revenue) to their respective state government along with publicly publishing the service level benchmarks relating to basic urban services each year for the period. The service level benchmarks of the ministry of urban development are to be used for the comparison.