Rajasthan Finance Commission

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About Rajasthan Finance Commission

The Finance Commission of Rajasthan was first set up in the year 1994. With tenure of 5 years, the state has so far experienced the formation and activities of the following 3 Finance Commissions:

  • 1st State Finance Commission of Rajasthan (1995 to 2000)
  • 2nd State Finance Commission of Rajasthan (2000 to 2005)
  • 3rd State Finance Commission of Rajasthan (2005 to 2010)

The latest one was formed on 15th September, 2005 by the then Governor of Rajasthan. However, the commission became fully operational from the month of February, 2006. This commission adopted the methodology of the collection of material, information and analysis, inviting ideas from the people concerned, meeting as well as discussions with experienced and eminent people, visiting the districts and welcoming memorandum from the Finance Department of Rajasthan, local governments and Panchayati Raj.

Parties involved in Rajasthan Finance Commission

The core commission was formed of the below mentioned posts:

Shri Manik Chand Surana: Ex-Member of the Legislative Assembly of Rajasthan

Other Members
  • Shri Jeet Ram: M. L. A. (Member of Legislative Assembly)
  • Shri Khush Veer Singh (Member of Legislative Assembly)
  • Shri Ramavtar Raghuvanshi: Member - Secretary of Commission and retired I. A. S.
However, following are some of the eminent people, who were, directly or indirectly, associated with the 3rd Finance Commission of Rajasthan:

  • Smt. Pratibha Patil: The then Governor of Rajasthan (Presently the President of India)
  • Smt. Vasundhara Raje: The then Chief Minister of Rajasthan
  • Shri Kalu Lal Gurjar: Minister of Panchayati Raj
  • Shri M. L. Mehta: Ex-Chief Secretary
  • Shri D. R. Mehta: Ex-Chairman of S. E. B. I.
  • Shri Bhagirath Sharma: I. A. S. (R)
  • Shri L. C. Gupta: I. A. S. (R)
  • Shri D. B. Gupta
  • Shri Lalit K. Panwar
  • Shri Rajiv Maharshri
  • Shri Ram Lubhaya
  • Shri Subhash Garg
  • Shri Tanmay Kumar
  • Shri T. Srinivasan

Functions of Commission

The 3rd Finance Commission of this state was expected to act independently as a quasi-judicial body. They had to perform the tedious task of suggesting the devolution of the economical resources from the Government of Rajasthan to the state's local bodies so as to help them release the constitutional obligations. Apart from evolving their own methodology, the commission was supposed to design the formats, questionnaires as well as solicit the relevant data of the state's earnings and expenditures. They were even responsible for collecting the data by visiting the different districts in the state. The report of this Finance Commission even included the detailed analysis of the economic status of the different tiers of U. L. B.s and P. R. I.s (Panchayati Raj Institutions).

Responsibilities of different financial branches

While the formulation of the report, the Finance Department of Rajasthan State Government provided a memorandum regarding the state finances to the commission. This stated that, apart from viewing the state resources in isolation, a holistic perspective should be taken into consideration for the formulation of the state plan. It even furnished the commission with the information that the U. L. B.s and P. R. I.s. are getting share of the individual taxes like entertainment tax and land revenue tax.

Sectors receiving grants

This Finance Commission of Rajasthan has made strong recommendations in their report to increase the revenue of the P. R. I.s and the U. L. B.s. P. R. I.s, mainly, include Gram Panchayats, Zilla Parishads and Panchayat Samitis. The below mentioned table provides the distribution of the P. R. I.'s fund:

P. R. I.'s2005 to 20062006 to 2007
Zilla Parishads (3 %)INR. 4.73 croresINR. 5.40 crores
Panchayat Samitis (12 %)INR. 18.91 croresINR. 21.61 crores
Gram Panchayats (85 %)INR. 133.93 croresINR. 153.03 crores
TotalINR. 157.57 croresINR. 180.04 crores

Apart from that, the grant of fund to the U. L. B.s is done on the basis of the following aspects:

  • Total U. L. B. population: 85 %
  • U. L. B. population in class - II, III and IV municipalities: 15 %

Main highlights

The main principles on which the Commission was based on were:

The principle of fiscal federalism of revenue adequacy or fiscal need states that to guarantee the accountability of any government in a better way, its revenue raising ability from their own sources are supposed to match, as much as possible, with their expenditure requirement.

A local government's strength is vitally dependent on the financial levels, which are available to the system of government so as to tackle the assigned responsibilities effectively.

Last Updated on 1/31/2012