Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: due date for vat payment :: form 3cd :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: empanelment :: VAT Audit :: VAT RATES :: cpt
« Budget Extravaganza »
 Budget advancement helps Centre, states start spending early
 Five things that you can expect from the Mumbai civic budget today
 GST all set for July 1 rollout but casts shadow on state budgets
 Income-Tax collection revised in Rajasthan budget
 No new taxes likely in Maharashtra Budget
 H.P. budget devoid of any financial prudence
 GST, demonetisation todecide budget priorities
 Railways to come up with mini-budget tomorrow
 Budget today, but GST kills the tax suspense
 Budget 2017 does little to expand taxpayer base, salaried still bear brunt of taxes
 Six things Finance Minister did not tell you in Budget 2017

Panel moots a share in union taxes
February, 26th 2010

The Thirteenth Finance Commission has has suggested a share in the union taxes for the local bodies, taking the process or 
decentralisation a step further, through an innovative direct transfer.

Over the five years beginning April 2010, as per the projections of the Commission, local bodies will receive Rs 87,000-crore grant from the Centre.

The Rs 87,000-crore grant recommended by the Commission to urban and rural local bodies will give a substantial boost to their financial position, said Sanjiv Misra, former expenditure secretary and member 13th Finance Commission.

The rapid urbanisation has brought the finances of local bodies under severe pressure, preventing them from providing basic amenities and infrastructure. The cash-strapped states have been unable to support local bodies. The Commission was not in a position to suggest a direct devolution to these local bodies, so it has hit upon an innovative method to transfer resources to them. The Constitution does not recognise direct devolution to local bodies. The Commission got around this problem by working out this new methodology. This will allow local bodies to become party to Centres revenue buoyancy. The grant will go to state budgets directly but will be earmarked for local bodies, said Mr Misra.

The methodology devised will basically link the quantum of the grant to the previous financial years devolution. For every year of the award period, the Commission has recommended a basic grant amounting to 1.5% of the size of the divisible pool in the preceding year. The grant will go to state budgets directly but will be earmarked for local bodies, ensuring that states are not able to direct these funds for meeting their revenue expenditure.

This approach will find favour with states as the move will make it easier for local bodies to fund provision of basic infrastructure in their areas. Moreover, these funds are over and above what states will get as part of the total devolution.

The Commission has linked part of the grants to achieving governance objectives such as setting up an independent local body Ombudsman, a property tax board, some basic accounting norms, and greater transparency. This will help spur reforms and improve accountability and ensure better delivery.

For 2011-12, the Commission has recommended a performance grant of 0.5% of the divisible pool of the preceding year and for subsequent years of the award period 1% of the divisible pool of preceding year.

It has recommended a special area performance grant of Rs 10 per capita for 2011-12 and Rs 20 per capita for subsequent years of the award period. However, these performance-linked grants are to be released by the Centre only on fulfilment of these conditions.

The Commission has also recommended a separate special area basic grant of Rs 20 per capita, carved out of the basic grant, for every year in the award period.

The Commission has recommended distribution of the grants between urban and rural areas and the inter-se distribution between the states.

It has also asked the State governments to incentivise revenue collection by local bodies.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions