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Karnataka GPs in crisis as Centre withholds Rs 3,000-crore statutory grant

Bengaluru: As the current financial year draws to a close, Karnataka’s Gram Panchayats face a daunting challenge as the balance of the 15th Finance Commission’s statutory grant from the Center, totaling Rs 3,000 crore across three installments, remains withheld, plunging around six thousand Gram Panchayats into financial crisis.

This delay in releasing the crucial grant, disbursed in four annual installments, significantly impacts village administration, particularly amid the worsening drought situation, posing challenges to water and sanitation management at the grassroots level.

With the grant still unreleased, Panchayat Development Officers (PDOs) are compelled to borrow equipment from private vendors and agencies to sustain essential operations within Gram Panchayats. However, with only 27 days left in the financial year, concerns loom large over the feasibility of adhering to spending regulations even if the pending installments are disbursed promptly.

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Of particular concern is the allocation of 60% of the 15th fiscal grant for addressing drinking water and sanitation needs, crucial during times of widespread water scarcity and heightened risk of infectious diseases.

Moreover, the absence of grants in Gram Panchayat accounts exacerbates the financial strain, further compounded by revenue collection challenges, especially in rural hamlets.

While the state government has released grants for addressing drinking water issues under drought relief, these funds bypass the Gram Panchayats, with Taluk Task Forces utilizing the resources, highlighting the urgent need for direct financial assistance to the villages.

The 15th Finance Commission grants, ranging from Rs 40 lakh to Rs 1 crore per Panchayat based on rank and population, remain pending, with only 25% of the first tranche disbursed in September. Despite repeated appeals to the Center and meetings with relevant authorities, including Rural Development Minister Priyank Kharge, the grant release remains stalled.

Amidst ongoing debates over the state’s share of tax collection from the Center, the state government has yet to voice concerns over the delayed release of statutory grants for the 15th fiscal year, leaving Gram Panchayats grappling with financial uncertainty.

Traditionally, two installments were slated for release in August and September, followed by two more in January and February. However, the first tranche disbursed in September comprised unrestricted grants, falling short of addressing critical infrastructure needs.

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