The 15th Finance Commission headed by Chairman, Shri N.K. Singh alongwith its Members and senior officials today met with the representatives of the Urban Local Bodies (ULBs) of Rajasthan.

The Commission was informed that:

• 16 out of 18 functions envisaged in the Twelfth Schedule of the Constitution have been devolved to ULB’s. Water Supply function is partially devolved and urban planning is yet to be devolved to PRIs.
• Rajasthan has a total of 190 ULBs, of which 149 are Municipal Boards, 34 are Municipalities and 7 are Municipal Corporations.

The 14th Finance Commission had recommended for the period 2015-20, a devolution of ₹ 3611 crores to Rajasthan as Basic Grant (5.2 per cent of total grants) and a devolution of ₹ 903 crores as Performance grant (5.2 per cent of total grants).

According to Pr. AG Rajasthan, following are the issues pertaining to accounting of ULB are -

• The accountability mechanism and financial reporting of the Urban Local Bodies in the State continues to be weak. Only 68% of the ULB Accounts are certified during 2017-18.
• Parking of money &Multiplicity of Bank accounts are major areas of concern in ULBs hampering transparency &accountability. As on March 2018, ₹ 1,652 cr was lying as unutilized closing balances in Municipal Funds.
• National Municipal Accounts Manual (NMAM) for ULBs was introduced for all ULBs to maintain the accounts on Accrual Based Accounting System from 1 April 2010: Only 60 ULBs were maintaining the accounts on above system.

Representatives of Municipal Corporations of Municipalities of Bikaner, Jaipur, Gangapur, Sujangarh, Niwai, Sambhar, Pratapgarh, Keshavraypatan, Shahpura, Sikar were present.

The Commission noted all the concerns highlighted by the representatives of the ULBs and promised to address them in its recommendations to the Central Government.

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MC

(Release ID: 1584472)

Devolution to Urban Local Bodies reviewed due to weak accounting and governance; recommendations to reform municipal finance forthcoming. Devolution of fiscal and functional responsibilities to Urban Local Bodies and municipal financial governance are central: most Twelfth Schedule functions are devolved though water supply is only partially devolved and urban planning not devolved; Rajasthan's ULBs exhibit weak financial reporting, incomplete account certification, large unutilized closing balances, multiplicity of bank accounts, and limited adoption of the National Municipal Accounts Manual and accrual accounting, issues the Commission will address in its recommendations to the Central Government.