Overview

• The standing committee chaired by Saptagiri Sankar Ulaka has flagged a multi-year drop in central allocations to Panchayati Raj Institutions as eroding the 73rd Amendment’s fiscal decentralization framework.
• It cautions that reduced untied and scheme-based transfers have weakened panchayats’ ability to deliver basic services, build infrastructure and support local livelihoods.
• The committee urges the Ministry of Panchayati Raj to engage immediately with the Ministry of Finance and the Fifteenth Finance Commission to secure adequate, untied, performance-linked grants.
• The report calls for ring-fenced allocations to shield PRI funds from diversion, flexible rebalancing of tied and untied grants and enhanced transparency in inter-tier fiscal transfers.
• Noting that only 25 states have set up State Finance Commissions and just nine have constituted sixth commissions on time, the panel presses for timely SFC formation and a model framework to strengthen District Planning Committees.