The 15^th Finance Commission headed by Chairman, Shri N.K. Singh alongwith its Members and senior officials met today with the representatives of the Panchayati Raj Institutions (PRIs) of Sikkim.  

The Commission noted that the State has transferred all 29 functions listed in the 11^th schedule of the Constitution to Rural Local Bodies.     

Sikkim has a total of 189 PRIs, of which 185 are Gram Panchayats  and 4 are Zila Parishads.

The revenue sources of PRI’s as informed by the State:

PRIs earn negligible revenues of their own. In 2017-18, they earned only 1.60 crores. The combined sources of revenues in 2017-18 are given below:

Sources of Revenues in 2017-18 (in Rs crores):

Own revenues	Transfers from GoI	Transfers from 14th FC	Devolution by SFC	Grant-in-Aid from State Government
1.60	90.00	28.95	22.32	20.57

 According to Pr. AG Sikkim, following are the issues pertaining to accounting of  PRIs –

• Transfer of functions to PRIs were not completed in full. (However, State Government has informed that they have devolved all functions to PRIs)
• New Accounting Format issued by Ministry of Panchayati Raj, Government of India in consultation with CAG was adopted since April 2010.  However, accounts were not maintained in New Accounting Format. System of certification has not been introduced in the State, as yet.

Requirements of Panchayat Raj Institutions in Sikkim as highlighted to the Commission, include –

• RLBs in Sikkim earn no revenues on their own. State government may help the local bodies to use innovative methods like market fees, parking space etc for improving the own revenues.
• Property Tax Board has not been set up by State Government yet. This should be immediately set up to explore and enhance own revenues.

Representatives of Rural Local Bodies of Sikkim - Shri Samsher Rai, Hon’ble Adhyaksha, East District Zilla Panchayat; Shri Ashok Gurung, Hon’ble Upa-Adhyaksha, West District Zilla Panchayat; Shri Him Bdr. Lakhey, Hon’ble Upa-Adhyaksha, South District Zilla Panchayat; Shri Tirtha Bahadur Chettri, Zilla Panchayat, Luing Ranks TC; Shri Hari Gururng, Zilla Panchayat, Rameng Perbing Phong TC; Smt. Devi Khatiwara, Zilla Panchayat, Lingdok Namphong TC; Shri Ongdita Bhutia, Zilla Panchayat, Darap Chumbong TC; Smt. Kala Subedi, Panchayat Sabhapati, Yangthang GPU; Shri Chabi lal Chettri, Panchayat Sabhapati, Martam GPU; Ms. Sarita Sharma, Panchayat Sabhapati, Premlakha Subhaneydara GPU; Ms. Bandana Chettri, Panchayat Sabhapati, Martam Nazitam GPU; Ms. Tashi Doma Bhutia, Panchayat Sabhapati, Navey Sothaak GPU; Shri Chungchung Lepcha, Panchayat Sabhapati, Chungthang GPU; Smt. Savitri Chettri, Panchayat Sabhapati, Kitam Manpur GPU and  Shri Bikash Sharma, Panchayat Sabhapati, Namphing GPU were present for discussions with the Finance Commission.

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

Panchayati Raj fiscal devolution flagged as inadequate; Commission to recommend measures to strengthen PRI revenue mobilisation. The Commission noted that Sikkim reported devolution of all 29 Eleventh Schedule functions to 189 PRIs but that PRIs earn negligible own revenues and rely largely on central and state transfers. Audit observations and PRI representatives identified gaps: non implementation of the new accounting format, absence of a certification system for PRI accounts, and incomplete functional and accounting transfers. PRIs requested measures to mobilise own revenues (market fees, parking), immediate constitution of a Property Tax Board, and implementation of accounting and certification reforms; the Commission recorded these concerns for its recommendations.