Central grant to Kerala panchayats may halt if state doesn't furnish State Finance Commission details
Jul 03, 2024
New Delhi [India], July 3 : Finance Commission grants to Gram Panchayats of Kerala may not be released by the Centre as the southern state has not followed some of the laid down procedures recommended by the 15th Finance Commission.
There are reports in local Kerala media on alleged negligence by the central government in releasing the 15th Finance Commission Grants to the Gram Panchayats in Kerala.
The Ministry of Panchayati Raj, through a statement on Wednesday, put forward its views and cleared the air on the allegations that were reported in Kerala media.
The ministry stated that the Centre has released Rs 3,774.20 crore as 14th Finance Commission grants to Gram Panchayats (2015-16 to 2019-20) and Rs 5,337.00 crore (as on June 28, 2024) as 15th Finance Commission grants to these Panchayats (2020-21 to 2026-27) in Kerala. For 15th Finance Commission period, the funds were released to Kerala in the form of Untied (Basic) and Tied grants to rural local bodies. 
As per the recommendations of 15th Finance Commission, it is mandatory for the States to constitute State Finance Commission (SFC), act upon their recommendations and lay the explanatory memorandum as to the actions taken thereof before the State Legislature on or before March 2024.
"After March 2024, no grants shall be released to the State that has not complied with the Constitutional provisions in respect of the SFC and these conditions," the ministry stated.
The Ministry, through letters on June 11 and June 24, 2024, requested all the States to provide the details of the State Finance Commission.
The state government, the ministry said, has submitted its Grant Transfer Certificate (GTC) of the second installment of Untied Grants for 2023-24 on June 7, 2024, through a letter. The said GTC is being examined by the Ministry of Panchayati Raj and being recommended for the release of next installment (1st Installment for FY 2024-25) to the Ministry of Finance.
However, as of June 28, 2024, the Ministry is yet to receive a reply from Kerala furnishing details on State Finance Commission, which is a mandatory condition for the release of grants after March 2024.
