Chandigarh, Sep 22 Punjab Chief Minister Bhagwant Mann on Tuesday called for a stronger financial framework for urban and rural local bodies, stressing the need for a disciplined state fiscal path and durable fiscal institutions to ensure financial sustainability and effective grassroots governance.
Chairing a meeting with the newly constituted Seventh State Finance Commission, Mann said it has been constituted to “make specific recommendations for distribution of taxes, duties, road tax and others amongst the panchayats/municipalities and the state, besides making further recommendations for improving the fiscal health of these civic bodies”.
The commission is a constitutional instrument for ensuring fiscal decentralization to Panchayati Raj Institutions and municipalities, he said.
It seeks to ensure that the grassroots institutions created under the 73rd Constitutional Amendment have the financial capacity to discharge their responsibilities effectively, the chief minister said.
Welcoming the chairman and members of the commission, Mann said, “The State Finance Commission has an important responsibility to examine the financial position of Panchayati Raj Institutions and Municipalities and recommend a framework for strengthening fiscal devolution and financial sustainability of local governments.”
“There is a need for a transparent, equitable and sustainable system of resource devolution, keeping in view the increasing responsibilities of panchayats and urban local bodies in delivering essential civic services and creating local infrastructure,” he said.
He hoped that the commission will undertake a comprehensive assessment of the revenue potential, expenditure responsibilities and financial requirements of local bodies, and make practical and forward-looking recommendations to strengthen their fiscal capacity and enable them to discharge their functions effectively.
Mann said, “The Commission also recommends measures to reduce unproductive revenue expenditure and steps to improve the quality of administration and technical support for efficient and effective use of capital resources.”
The Seventh State Finance Commission has been constituted by the Punjab government under Section 3(1) of the Punjab Finance Commission for Panchayats and Municipalities Act, 1994, under the chairmanship of former additional chief secretary of Punjab K Siva Prasad.
The commission also includes Shoikat Roy as expert member, and administrative secretary, rural development & panchayats, and administrative secretary, local government as ex-officio members, and special secretary finance as the ex-officio member secretary, Mann said.
The commission will make its report available by September 30, 2027, covering a period of five years commencing on April 1, 2026.
(PTI News)
