Manual for Integrated District Planning - National Institute of Rural ...

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Manual for Integrated District Planning department, which in turn, may or may not make specific allocations to the local governments. 5.4.2 In this scenario, it becomes absolutely essential that some kind of budget separation is made so that local governments have an idea of the budget which their plan must match. This can be achieved through a series of steps, commencing with the creation of a Local Government Sector Budget Window in the budget of state governments and ending with each local government getting a clear communication of its budget. 5.4.3 The broad separation of the budget can be met in two ways: (i) each department could create separate line items in their budgets for local governments, earmarking allocations pertaining to responsibilities devolved and schemes entrusted to them. Departments can thus directly send their funds to local governments in accordance with these earmarked budget line items. Alternatively, (ii) all such earmarked funds pertaining to different departments could be consolidated by the Finance Departments and sent to local governments in regular installments. The approach followed in three states is given in Box 12. Box 12 Karnataka All schemes pertaining to Panchayats are transferred to a ‘District Sector’, which is a separate part of the budget document. Releases from the District Sector to each district are further elaborated in a ‘link document’, which contains the district-wise break up of each line item (both plan and non plan) in the District Sector. Thus each Zila Parishad knows what its annual budget is and the basket of schemes and funding streams that it is supposed to implement, both plan and non-plan. However, there is no universally adopted mechanism to further break up the allocations in the link book between the Zila Parishads, Taluk Panchayats and Gram Panchayats, though some districts have come up with the concept of a ‘district link book’, which breaks up this information further down to the level of each Panchayat. Kerala Kerala is the only state where the overall budget is disaggregated to the level of each local government. Appendix-IV of the State Budget gives details of funds allocated to each local self-government institution, under different heads of accounts. These are classified under three main categories of funds. (a) Untied plan allocation, which is about 30 to 40 percent of the state’s plan allocation. (b) Allocation for different subjects transferred to local self-government institutions, which includes plan and non-plan funds that are tied to specific schemes. (c) Maintenance grant and general purpose grant. Thus at one glance, each Panchayat can easily find out its budget directly from the State Budget. West Bengal Work of separation of the budget for Panchayats is in progress in West Bengal. General Orders on Activity Maps were issued in the state in January 2007, following which 10 departments issued matching internal orders. Of these, four departments have opened a separate head of account within their individual budgets to transfer funds to the three levels of Panchayats for execution of the functions and activities transferred by these departments to the Panchayats through activity mapping. 36
Manual for Integrated District Planning Box 13: Resource-availability checklist for each local government to help prepare their plan S. No. Component Yes/No Remarks 1 2 Has the state made arrangements for a separate budget head in which devolution of funds, pertaining to all matters devolved to local governments are separately indicated? Indicate the number of state departments whose funds are channelised through the local government sector window. 3 Has the state decided upon and indicated the formula for distribution of local government components of the state plan, and indicated the broad order of resources that would be available during 2007-08 from the state plan to: a b different levels of local government to each local government 4 Has the state indicated the resources that would be available to the local government sector during the year concerned in the green and blue formats? 5.4.4 The Checklist in Box 13 is useful to ascertain whether the steps in separation of a budget at the state-level have been undertaken. 5.4.5 Separation of the budget for each local government at the district level: Given that in most states fiscal decentralisation lags behind functional decentralisation, the presentation of the budget to each local government is a particularly important step at the district level. Therefore, the envisioning process needs to be accompanied by a comprehensive financial-resource mapping exercise at the district, block, village and urban level, which provides a clear idea of the funds available at each level for implementing a plan. There is a very close relationship between the two exercises. Envisioning can trigger: (a) achieving the maximum outcomes within the existing fund-allocation pattern, through greater vigilance and better implementation; (b) improving fund-allocation pattern based upon feedback from the visioning process, on what people really need and want; and (c) Spurring the seeking out of more sources of funds, such as improving local revenues, canvassing for contributions, promoting further investments, obtaining more credit, etc. The question often arises as to what precisely constitutes the budget of local governments, given that there are several parallel structures that operate above and below them. Is it necessary for a local government to know what allocations are being spent by others within its jurisdiction? What about allocations made to sub-local government-level user groups and subcommittees, some stand-alone or others formally designated as subcommittees of the local government but designed 37
Page 1: Planning Commission of India Manual
Page 5 and 6: Foreword The overriding them of the
Page 7 and 8: Acknowledgements In pursuance of th
Page 9 and 10: Abbreviations ACA AIBP AIILSG ANM A
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Page 17 and 18: Chapter 1 Introduction and Backgrou
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Page 43 and 44: Chapter 4 Bridging Regional Dispari
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This manual attempts to set out the
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