Finance Commission holds meeting with representatives of Madhya Pradesh ULBs

Madhya Pradesh has a total of 378 ULBs, of which 16 are Municipal Corporation, 98 are Municipalities and 264 are Nagar Parishads.

The 15th Finance Commission headed by Chairman, Shri N.K. Singh along with its Members and senior officials today met with the representatives of the Urban Local Bodies (ULBs)  of Madhya Pradesh.

The Commission was informed that:

All 18 functions as envisaged in the 12th schedule of the Constitution, have been devolved to ULBs in Madhya Pradesh.     

The State has been releasing funds currently as per the recommendations of the 3rd  State Finance Commission.

Madhya Pradesh has a total of 378 ULBs, of which 16 are Municipal Corporation, 98 are Municipalities and  264 are Nagar Parishads.  As per the recommendations of the 3rd  SFC,  1% of the net tax revenues of State was recommended to be devolved to ULBs which has been accepted by the Government of Madhya Pradesh.

The 14th Finance Commission had recommended for the period 2015-20, a devolution of Rs. 4141.27 crores to Madhya Pradesh as Basic Grant ( 5.94 per cent of total grants) and devolution of Rs. 1035.32 crores as Performance grant ( 5.94 per cent of total grants).

The Commission observed that the State has been releasing funds currently as per the recommendations of 3rd SFC.  The recommendations of the 4th SFC had not been accepted, while the submission of the report of 5th SFC  is still awaited.

The Commission desired to know whether ULBs have suffered any loss of revenue due to subsuming of advertisement & entertainment tax, unless levied by local bodies, in GST, and the extent of the same. The Commission also wanted to know, if any, compensatory mechanism was provided to ULBs to meet the revenue shortfall due to such subsuming

The Commission further noted all the concerns highlighted by the representatives of the ULBs and promised to address them in its recommendations to the Central Government.

(With Inputs from PIB)