PART I EXTRAORDINARY
FINANCE DEPARTMENT
(CASP&FC)
FOURTH STATE FINANCE COMMISSION - FIXING THE TERMS OF
REFERENCE (FUNCTIONS).
[G.O.Ms.No. 64, Finance (CASP&FC), 15th May, 2018.]
NOTIFICATION
In pursuance of the provisions of the Article 243-1 and section 235 of Andhra
Pradesh Panchayat Raj Act, 1994 the Fourth State Finance Commission under
the Chairmanship of Prof. Gummadi Nancharaiah has been constituted vide
Notification Dt: 8.2.2018.
Now, the Governor of Andhra Pradesh is pleased to decide the following detailed
terms of reference of the Fourth State Finance Commission, namely-
1. The State Finance Commission shall review the financial position of the Gram
Panchayats, Mandal Parishads, Zilla Parishads and of the Nagar Panchayats,
Municipal Councils and Municipal Corporations in the State and make
recommendations to the Governor as to:-
(a) The principles which should govem:-
(i)
The distribution between the State Government and the Gram
Panchayats, Mandal Parishads, Zilla Parishads, Nagar Panchayats,
Municipal Councils and Municipal Corporations of the net proceeds
of the taxes, duties, tolls and fees livable by the State, which may
be divided between them and the allocation between the said
bodies at all levels of their respective shares of such proceeds;
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Registered No. HSE-49/2016
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AMARAVATI, WEDNESDAY, MAY 16, 2018
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NOTIFICATIONS BY GOVERNMENT
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(ii)
The determination of the taxes, duties, tolls and fees which
may be assigned to or apportioned by the said Panchayats,
Mandal Parishads, Zilla Parishads, Nagar Panchayats, Municipal
Councils, and Municipal Corporations;
(iii)
The sharing of grants-in-aid to the said Gram Panchayats,
Mandal Parishads, Zilla Parishads, Nagar Panchayats, Municipal
Councils and Municipal Corporations from the Consolidated Fund
of the State;
(b) The measures needed to improve the financial position of the said
Gram Panchayats, Mandal Parishads, Zilla Parishads, Nagar Panchayats,
Municipal Councils, and Municipal Corporations including measures for
improving the management of available resources;
2. The Commission shall assess the financial requirements of the Panchayats
and Municipalities as well as the ways and means to augment their
resources to minimize dependence on additional financial support from the
State Government in order to achieve swift and impartial fiscal consolidation
with further sustainable financial base as to improve the civic services.
3. The Commission shall also recommendations on any other matter that
may be referred to it, by the Governor, in the interest of sound finances of
Panchayat Raj and Municipal Bodies referred to above.
4. In making its recommendations, the Commission shall have regard among
other considerations, to:-
i.
Based on the level of taxation and non-tax revenue resources including
their ability to raise additional taxes, devolutions, grants from State
Government and grants from 14th Finance Commission make projections
for the forthcoming years from April, 2020;
ii.
Analyze the outstanding debt position of the Panchayats and
Municipalities in detail and offer recommendations to establish sound
equilibrium between their receipts and expenditures aiming to build up
surplus capital savings;
iii.
Decrease the debt liabilities of Panchayats and Municipalities, keeping
in view their resource capacity and simultaneously widen their resources
aiming to reduce the projected gap between their revenue receipts
and expenditures;
iv.
Appraise tax and non-tax efforts of the Panchayats and Municipalities
as against their targets, if any, and explore additional potential
resources in order to uplift their tax and non-tax revenues, making their
accounts credible and more self dependent keeping in view the
suggestions made by the 14th Finance Commission;
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v.
Scrutinize the timely needs for possible commercialization of public
services like drinking water supply system, sanitation, street light etc.
by way of imposing user charges, updating rates of levies, taxes, fees
etc. as well as privatization of public transport system. This should be
done in a way that both public and private agencies are benefited
and the people do get adequate services with affordable charges;
vi.
Suggest measures for improving accountability of Local Bodies in
discharging their functions.
vii.
The requirements of the Panchayat Raj Institutions, and Municipal Bodies
for meeting the non-plan revenue expenditure on staff and administration
etc ;
viii.
The requirements of the bodies for capital expenditure for creating
assets like, water Supply Schemes, Roads, Bridges, Buildings, Minor
irrigation Sources;
ix.
The maintenance and upkeep of capital assets like Buildings, Roads,
Water Supply Schemes, Minor irrigation sources by the Panchayat Raj
Institutions, Municipal Bodies, Municipal Corporations and the norms
on the basis on which specified amounts are recommended for the
maintenance of assets;
x.
The Provisions required for emoluments and terminal benefits of employees;
xi.
The status and improvement for computerization of accounts; and
xii.
The incentives which may be provided for better realization of taxes and
non-taxes.
5.
In making the recommendations, the Commission shall have regard to the
resources of the State Government and its burden of committed expenditure
and liabilities thereon, in particular, on account of expenditure on civil
administration, police social economic services and non-plan revenue
expenditure and debt servicing, including the debit serving on behalf of
local bodies.
6. The Commission shall also have regard to-
(i)
Evaluate the revenue receipts and expenditures of the Panchayats
and Municipalities on a common scale keeping in view their population
and its socio-economic backwardness, geographic location etc. in the
process of devolution of funds by means of taxes, duties, tolls, fees and
grant-in-aid to the Panchayats and Municipalities;
(ii)
Assess the debt liabilities of the Panchayats and Municipalities as on
31st March, 2020 and resolve necessary steps to sustain appropriate
debt level;
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ANDHRA PRADESH GAZETTE EXTRAORDINARY
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(iii)
Impart quality and cost effective Civic services that bear express
installation and render more comforts to the people by using modem
technologies. Also after incentives like encouragements to the Panchayats
and Municipalities for better utilization of their resources adhering to their
financial restrictions;
(iv)
Undergo and examine the reforms considered and suggested by the
previous State Finance Commissions, endorse and ensure their
implementation in the best way that the principles behind them can be
attained at optimum level.
(v)
Keeping in view the recommendations of 14th Finance Commission,
examine the functions assigned to the Zilla Praja Parishads and suggest
measures for strengthening their financial base to meet their essential
requirements.
7.
The Commission shall provide its conclusions along with the basis of their
findings as well as the Panchayat and Municipality wise projected estimates
of receipts and expenditure.
8.
The Commission shall consider the recommendations of the 14th Finance
Commission while preparing its report and use the templates devised by the
13th Finance Commission and other guidelines to be issued by Government of
India from time to time.
9.
The Commission shall make its report available on or before 30th October 2019
covering a period of forthcoming five years commencing on the 1st day of April
2020.
MUDDADA RAVI CHANDRA,
Principal Secretary to Government (FAC).
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