2.  Ascertain extent to which ‘core functions’ (Water supply, Sanitation, Roads and other means of communication, Streetlights and maintenance of community assets) were entrusted to Panchayats through law;  Estimate costs of providing and maintaining core services of an acceptably defined standard.  Study incomes and expenditures of RLBs;

3.  Many critical activities relating to performance of core functions, nearly universally entrusted to village level RLBs.  Wide variation in scope and range of entrusted responsibilities related to core functions devolved upon Intermediate and District Panchayats, ranging from these levels having a commanding sweep of functions to perform, to those where they merely were given advisory powers.

4.  Descriptive information on a checklist  Consolidated numerical data for entire state  Numerical data from random sample, as selected by FFC Consistency checks undertaken form an annexe to the study report

6. DistrictIntermediateVillage Own Revenues9.6(1.6%)3.8 (0.4%)72.6 (11.3%) Transfers from Centre118.2 (19.0%)217.4 (25.6%)372.1 (60.7%) Central Finance Commission28.1 (4.5%)22.2 (2.6%)72.4 (8.5%) Assigned and Devolved funds from State 96.4 (15.5%)190.5 (22.4%)98.7 (11.6%) Grants in Aid from State357.5 (57.6%)365.6 (43.0%)42.1 (4.7%) Other Receipts10.5 (1.7%)50.3 (5.9%)14.1 (3.2%) District level; total revenues620.3(100%)849.7(100%)672.0 (100%) Rs/capita (%), 2012-13 Growth per annum during 2009-10 to 2012-13. Village level RLB: 4%. Intermediate level: 12% District level: 9%.

7. S.No State09-1010-1111-1212-1309-1010-1111-1212-13 All levels Total transfers (Rs crore) Per capita transfers (Rs) 1 Karnataka12281134011541217849 3323360141134731 2 Gujarat7934109681140814488 2327318932884141 3 Tamil Nadu2368309340814855 64483610961296 4 Kerala2258250531363943 1208138517952339 5 Uttar Pradesh1262178821722455 84117140156 6 Madhya Pradesh988134214192434 194259270456 7 Bihar201817812153 22193229 8 Rajasthan49141213991836 9881272351 9 Orissa47460211631448 138174333410 10 Maharashtra52794110151132 87154165182 11 Chhattisgarh4485927591101 236307387553 12 Punjab319443549644 186257316369 13 West Bengal391402443455 64657173 14 Uttarakhand168220106187 244316150263 15 Sikkim93110158144 2008238634513163 16 Assam6883228104 26328538 17 Andhra Pradesh50 100 99918 Himachal Pradesh6369 80 105113 128 19 Haryana022912477 --1407546 20 Tripura241918 87706667 Total30225372874549055503 371453547660

8. High volumes could be because of non-plan salary transfers (Karnataka, Maharashtra, Gujarat) or misclassification (Sikkim)

10. 2007-082008-092009-102010-112011-122012-13 Village Panchayats 2526.15 (69.0%) 3245.62 (70.1%) 3765.82 (71.9%) 4348.61 (71.9%) 7159.43 (73.6%) 8587.71 (75.3%) Intermediate Panchayats 538.85 (14.7%) 567.82 (12.3%) 665.22 (12.7%) 974.24 (16.1%) 1397.5 (14.4%) 1575.47 (13.8%) District Panchayats 593.73 (16.2%) 815.63 917.6%) 805.38 (15.4%) 725.97 (12.0%) 1175.61 (12.1%) 1247.06 (10.9%) Total transfers 3658.734629.075236.426048.829732.5411410.24

11. Level 2007-082008-092009-102010-112011-12 Tier wise details (Rs crore) Village level 2046.092179.892419.902783.683118.58 Intermediate level 311.74339.85381.62531.71575.17 District level 1352.401672.691772.252168.212414.95 Grand Total 3710.234192.434573.775483.596108.69 Category wise details (Rs. Crore) Immovable property tax 993.25945.691076.391245.851361.14 Other taxes 1209.671407.211540.391798.312135.35 User charges and non-tax revenues 1507.311839.531956.992439.432612.20 Total 3710.234192.434573.775483.596108.69

13.  Differences in State wide and sample RLB data, with former showing considerably higher figures  Classification of expenditures as capital and revenue expenditure showed inconsistencies; so total expenditures were taken into account.

14. TOTAL EXPENDITURE (At all Levels) 2007- 08 2008- 09 2009- 10 2010- 11 2011- 12 2012- 13 Average per capita Roads and Bridges 110.4153.2210.6195.9223.6242.1189.3 Water Supply 45.169.775.374.481.094.573.3 Buildings/ Community assets 77.496.9134.5147.2158.2166.4130.1 Street Lighting 5.48.49.111.612.614.210.2 Sanitation, Storm water drainage and solid waste 11.419.722.425.828.433.723.6 Other means of communication 16.920.630.529.828.830.026.1 Other capital Expenditure 93.4107.1186.0198.3168.5177.4155.1 Total expenditure 309.2364.2540.7541.7562.5631.2491.6

15.  Differences in incomes and expenditures year after year may arise due to the following factors –  States might not have reported opening or closing balances under the revenue and/or expenditure heads;  System of inter-agency transfer within the three levels of RLBs might not be recognized.  Unspent money for agency functions might be recredited to higher levels, where it might be classified as revenues all over again.

16.  Dichotomy between de-jure expression of devolution and de-facto operation of deconcentration  Many programmes implemented through deconcentration shown to be nominally undertaken at RLB level,  Wide variation in the extent of funds given to the District and Intermediate Panchayats.  Inter-agency transfers and re-crediting of funds takes place between the three levels of RLBs  Many State and Central level programmes operated through ‘Mission’ offices, at the District and Intermediate levels, which channelize funds for specific programmes and ring fence these from both deconcentrated departmental accounting systems, and the tiered local government system

17.  Dichotomy between de-jure expression of devolution and de-facto operation of deconcentration  Many programmes implemented through deconcentration shown to be nominally undertaken at RLB level,  Wide variation in the extent of funds given to the District and Intermediate Panchayats.  Inter-agency transfers and re-crediting of funds takes place between the three levels of RLBs  Many State and Central level programmes operated through ‘Mission’ offices, at the District and Intermediate levels, which channelize funds for specific programmes and ring fence these from both deconcentrated departmental accounting systems, and the tiered local government system

18.  The Flow - Centre -> Karnataka -> District (Kolar) -> Taluk (Mulbagal) -> Panchayats (30 nos)  Analysis of Karnataka state budget (2014-15) undertaken – devolved schemes, ‘overlapping schemes’ and ‘non-devolved’ schemes.  A list of parastatals and parallel bodies operating in relevant geographic vicinity.  Fundamental investigation - What is the money that gets spent in the geographic jurisdiction of a Grama Panchayat?  Major deliverable - A comprehensive spreadsheet database enabling slice and dice of data to obtain insights on the trail 

19.  List of all schemes (Centre, State etc)  Salary/Non Salary Classification amidst others  Schemes codes and link codes of all the schemes  Subcomponents of each scheme  Routing - ZP, TP, GP schemes  Flow of money across institutions  Allocated, Released, Received and Expended particulars

20.  Devolved sector envelop (Plan + Non Plan) - Rs 26341 crores  Devolved Plan - Rs 10481 crores  Devolved Non Plan - Rs 15860 crores  Salaries - Rs 14553 crores  55.2% of overall devolved amount is salaries  54% of ZP schemes are salaries  A staggering 71% of TP schemes are salaries

21.  Better inform all stakeholders in each State of the State-specific scenario, so as to hopefully trigger wider political debate on the crux of the issue, ie, fiscal devolution  Advocate for nationally accepted parameters of how fund flows are to be attributed to RLBs, specifically on how to treat (a) non-plan salary transfers, (b) allocations to and expenditures made by parallel bodies and user groups, (c) revenue transfers from the State of shared taxes, and (d) inter-agency transfers and recoupment of funds