The Ministry of Panchayati Raj including its Secretary, Shri Rahul Bhatnagar and senior officials made a presentation to the Chairman of 15th Finance Commission, Shri N.K. Singh, its Members and senior officials of the Commission.

It may be noted that Article 280 (3) (bb) of the Constitution specifies that the measures needed to augment the Consolidated Fund of a State to supplement the  resources  of  the Panchayats in the State should be on the basis of the recommendations made by the Finance Commission.

Amongst several proposals to the Finance Commission, the Ministry has proposed an allocation of ₹ 10,00,000 crores to Panchayats by the 15th Finance Commission which is a hike of 399 per cent from that given by the 14th Finance Commission.

The meeting discussed in detail the proposals of the Ministry which included:

• Allocations to different categories of Panchayats.
• Modification in modality for provision of Performance Grant.
• Allocation of  funds to non-part IX areas/ DPs & IPs and UT Panchayats.
• Sustainable Development Goals linked to activities other than construction.
• Need for increased adoption of Digital Technology by the Panchayats.
• Augmentation of Own Source Revenue- Mechanism to be developed by State Govt.

Both the Ministry and the Commission agreed to the view that all three tiers of Panchayati Raj Institutions should receive fund devolution, and the proportionality should be within a specified band.

The Commission will go through all the proposals which shall also be part of the Memorandum of the Central Government to the Commission – for the purpose of making its final recommendations.

Fund devolution to Panchayats proposed expanded allocations and modality changes under constitutional finance commission framework. Under Article 280(3)(bb), the Ministry proposed substantially increased devolution to Panchayats and revisions to allocation categories, performance grant modalities, inclusion of non Part IX areas and UT panchayats, SDG linked activities beyond construction, digital technology adoption, and state developed mechanisms to augment Panchayat own source revenue; the Commission agreed funds should flow to all three tiers within a proportional band and will review these proposals for inclusion in the Central Government's memorandum to inform final recommendations.