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Plan. The State Finance Commissions were set-up to determine the principle of sharing of revenue between the State and the panchayats as also between the panchayats at different levels and to suggest ways of local resource mobilisation by the panchayats. However, so far SFCs of only 7 States have submitted their recommendations to the respective State governments. In order to bring about genuine democratic decentralised planning, it is required that all SFCs submit their recommendations to their State governments so as to enable the State governments to devolve necessary powers and functions to the PRIs both via legislative action and executive orders.

5.22 Similarly, as per provisions of the Constitution 74th Amendment Act, the Urban Local Bodies/ Municipalities are expected to prepare plans for the development of urban areas. The municipalities will be the focal institutions for the provision of urban infrastructure and delivery of services and the States would have to endow them with Commensurate functional and financial powers and responsibilities.

5.23 While the urban local bodies would have a share in the revenue of the States, they would have to be permitted to levy their own taxes/cesses at the local level. These could include profession tax, property tax, entertainment tax and motor vehicle taxes etc. In addition they could levy user charges and license fees, wherever feasible. Some of the municipalities in cities could also raise resources from the market by issue of bonds.

5.24 The financing tasks of the Plans of local bodies will have to be integrated with the follow up of the implementation of the State Finance Commission Reports. These reports are expected to give the details of schemes of revenue raising for meeting current expenditures and grantsin-aid for meeting these requirements to aid the process of restructuring of these bodies which are at present financially unviable. These exercises have to be followed up by detailing the sources of finance for capital expenditure for infrastructure provision. Those bodies which are able to restructure their revenue account finances, must be enabled to engage in borrowing for productive infrastructure projects subject to credit worthiness. Financial sector reform to allow floatation and trade of municipal and local body papers, for financially viable local bodies and tax and other incentives for this purpose must be thought of, as in other countries.

5.25 As per Article 243(G) of the 73rd Constitutional Amendment Act, the Panchayati Raj Institutions will prepare plans for economic development and social justice. Thus the core function of the PRIs would be planning at the local level through the institution of the District Planning Committees. Even these have not been set up in many States. However, this should receive top priority as these District

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Planning Committees will provide the umbrella for the preparation of integrated district development plan. However certain broad principles would have to be laid down for assigning a role to each of the three- tiers; the actual devolution could be based on the rule that what can be done at a lower level should be done at that level, and not a higher level. The Gramsabha would list out priorities and assist in the selection of beneficiaries for various programmes and schemes. In this way the aspirations of the people would be articulated. Thereafter the planning process would begin from below with the preparation of village plans which would' be incorporated into the intermediate level plans and finally merged into a district plan.

5.26 A 'Core Planning Team', comprising of experts from various disciplines should be formed. The team should obtain inputs from the Remote Sensing Centres, ARPU, and other organisations on the physical and natural resource endownments of the area and assist in the formulation of the plans. Keeping in view the resources available at each level programmes/schemes should be taken up on the basis of identified priorities. In so far as earmarking of resources for decentralised planning is concerned the recommendation of NDC Committee that 41 per cent of plan resources be set apart for this should be the objective during the Ninth Plan. This could include a proportion as untied funds and as, incentive grants' to match the contribution raised by PRIs. Thereafter sectoral allocations at the State level should be on the basis of demands made from below by the districts and in keeping with national priorities. In this way, it would be possible to bring about both a vertical and a horizontal integration of resources and services. The PRIS, would provide an umbrella for the convergence of various sectoral, Poverty alleviation and area development programmes at each tier and the vertical integration would be facilitated by an integration of area plans from the Village to the State level. This would ensure a synergy between macro-level and micro-level objectives.

5.27 A comprehensive and time bound training policy would have to be formulated in order to ensure that the Panchayati Raj functionaries are equipped with information regarding various programmes/schemes of the governments, available technologies and other relevant information which have to be disseminated amongst the local people. The Central government should provide for training of trainers but the State governments would have to take up training at the more decentralised levels in keeping with the local training requirements.

5.28 Awareness building among the people needs to be given top priority. The government machinery, voluntary organisations and self- help groups will be involved in the process of advocacy and in organising the people, especially

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the poor. Participation of people can be encouraged through beneficiary/functional committees which should be given the responsibility of overseeing the implementation of various programmes. Social audit and transparency in the functioning of PRIs is crucial for the growth and development of these institutions. These will be the important goals of the decentralisation strategy during the Ninth Plan.

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