Ministry of Panchayati Raj released the
report of the committee on data sets for State Finance Commissions
Ministry of Panchayati Raj (MoPR) has released the
Report of the Committee on Datasets for State Finance Commissions (SFCs) to
strengthen evidence-based fiscal decentralisation and improve the quality of
financial devolution to Panchayati Raj Institutions (PRIs).
About the Report
¨
The Committee on Datasets
for State Finance Commissions was constituted by the Ministry of Panchayati Raj
following concerns raised during the Finance Commissions’ Conclave on
Devolution to Development (November 2024) regarding inadequate access to
reliable datasets for SFCs.
¨
The report identifies
essential datasets required by SFCs and recommends measures to improve data
availability, standardisation, interoperability, and institutional capacity.
¨
It seeks to strengthen
the information architecture supporting local governance and enable more
effective fiscal decentralisation.
¨
The report was released
by Dr. V. Anantha Nageswaran, Chief Economic Advisor to the Government of
India.
Key Findings of the Report
Challenges in the Existing Data Ecosystem:
¨
Fragmentation of data
across multiple departments with no integrated database for local government
finances and service delivery.
¨
Lack of Gram
Panchayat-level data granularity.
¨
Variations in accounting
practices across States hinder data comparability.
¨
Limited availability of
sector-wise and functional expenditure data.
¨
Capacity constraints at
the local level, including shortages of trained personnel for accounting and
data management.
¨
Delays in the
constitution and submission of SFC reports and wide variations in their quality
and methodology.
¨
Continued dependence on
outdated datasets such as Census 2011 and SECC data.
Essential Datasets Identified: The report
identifies the need for standardised datasets relating to:
¨
Demographic and
socio-economic indicators.
¨
Revenue, expenditure,
transfers, and debt.
¨
Governance and devolution
indicators.
¨
Infrastructure gaps and
asset inventories.
¨
Public service delivery
outcomes.
Key Recommendations
¨
Strengthening Data
Systems: Develop robust Gram Panchayat-level fiscal databases, ensure
systematic availability of Panchayat-level data through standard frameworks,
and publish a joint MoPR–MoSPI Data Handbook covering district, block, and Gram
Panchayat datasets.
¨
Improving Use of
Panchayat Advancement Index (PAI): Classify PAI indicators into need-based,
performance, and equity/backwardness categories for use by State Finance
Commissions.
¨
Institutional Reforms:
Establish Permanent State Finance Commission Cells, create a formal forum for
interaction and knowledge-sharing among SFCs, and prepare a comprehensive State
Finance Commission Manual.
¨
Capacity Building:
Enhance awareness and training on available datasets and the eGramSwaraj
Portal, strengthen NIRDPR’s role in capacity building and dissemination of best
practices, and revive periodic publication of Panchayat Statistics.
¨
Standardisation and
Transparency: Introduce uniform accounting heads for local body transfers,
adopt a common reporting format for SFC reports, and include a supplementary
budget document detailing transfers to rural and urban local bodies with Gram
Panchayat-wise allocations.
¨
Accountability Measures:
Request CAG to conduct a performance audit of the implementation of the 73rd
Constitutional Amendment Act and revive the Local Statistics System through an
expert group involving MoPR, MoSPI, and other stakeholders.
State Finance Commissions (SFCs)
¨
The State Finance
Commission (SFC) is a constitutional body established under Articles 243-I and
243-Yof the Constitution and is constituted by the Governor every five years.
¨
It reviews the financial
position of Panchayats and Municipalities and recommends measures to improve
their financial health.
¨
The Commission recommends
the distribution of State tax revenues between the State Government and local
bodies.
¨ It also advises on the assignment of taxes, duties, tolls, fees, and grants-in-aid from the Consolidated Fund of the State.
¨ Thus, the SFC plays a key role in strengthening local self-government and promoting fiscal decentralization.
