The 15^th Finance Commission today met the representatives of the Panchayati Raj Institutions(PRIs) of Telangana today. They had detailed discussions on several issues highlighted by the representatives and sought by the Commission.

​ The basic Information on PRIs of Telangana (as provided by State):

​i)​ To strengthen local self-governance in the State, the Telangana Panchayat Raj Act, 2018 was enacted.

​ii) Only 10 out of 29 functions envisaged in the Eleventh Schedule of the Constitution devolved to PRIs.

​iii) Accounts are maintained upto 2017-18 & audited upto 2016-17.

​iv) SFC-I of Telangana constituted on 16.03.2015 is expected to submit its report by 02-01-2020. State has been releasing funds currently as per the recommendations of SFC-III (appointed by erstwhile AP).

​v) Number of local bodies (as on January, 2019) at each level of PRI is as below:

PRIs	Number of Local Bodies
Zilla Parishad (ZP)	9
Mandal Praja Parishad (MPP)	438
Gram Panchayat (GP)	12,751
Total	13,198

 ​Revenue Sources of PRIs (as provided by the State):

 i) Own tax revenue of ZP & MPP is almost negligible, being less than 0.05% of total revenue in 2016-17 & 2017-18. However, it constituted almost 23% for GP in these two years, mainly from immovable property tax..

ii) Own non-tax revenue of each tier of PRIs was less than 5% of their total revenue in 2016-17 & 2017-18.

iii) Major source of revenue of GP is transfers from FC-XIV which comprised around 55% of total revenue of GP in 2016-17 & 2017-18.

iv) Major sources of revenue of ZP & MPP are grants-in-aid from state govt. and assigned & devolved taxes. In 2016-17 & 2017-18, their share in total revenue varied from 60% to 84% for ZP & from 72%to 75% for MPP.

​​According to CAG’s Report on Local Bodies, 2016-17:

i) As per audit carried out in 5 ZPs, 25 MPPs, and 46 GPs for the period 2014-17, it has been found that PRIs did not have records detailing the inventory of land in their possession. This resulted in encroachment of PRIs land.

ii) The Rural Water Supply department failed to initiate timely action to identify the source of funding before taking up the water supply scheme leading to delay in completion of works in time.

​Devolution by FC-XIV to RLBs

Grants	Telangana (Rs. crore)	All States (Rs. crore)	Grants to Telangana as a % of Total Grants
Basic Grant	4837.75	180262.98	2.68%
Performance Grant	537.53	20029.22	2.68%

 The FC-XIV had recommended grants for only gram panchayats out of 3 tiers of PRIs. The State Government was asked about its views on this arrangement.

Devolution of functions: limited transfer to Telangana PRIs, highlighting revenue dependence and audit and land record gaps. 15th Finance Commission met Telangana PRI representatives to review governance and fiscal issues: Telangana enacted the Panchayat Raj Act, 2018 but only ten of twenty nine Eleventh Schedule functions have been devolved; accounts and audits lag; SFC I constituted; PRIs comprise nine ZPs, 438 MPPs and 12,751 GPs; fiscal dependence is high with GPs reliant on central transfers and property tax and ZPs/MPPs reliant on state grants; CAG reported missing land inventories and funding identification failures delaying water schemes; FC XIV grants focused on gram panchayats only.