Guidelines and Operational Criteria for Availing 14th Finance Commission Performance Grant by Village Panchayats
The Rural Development and Panchayat Raj Department issued G.O.(Ms)No. 55, Rural Development and Panchayat Raj (PR-1), dated 5th May 2016, prescribing eligibility, distribution, release and use of the 14th Finance Commission Performance Grant for Village Panchayats. Village Panchayats qualify only if they submit the required audited accounts and increase their own revenue collection by at least 5% over the previous year.
What the notification governs
The Rural Development and Panchayat Raj Department guidelines govern the Performance Grant allocated to Village Panchayats under the Fourteenth Finance Commission. Of the total grants-in-aid, 90% is the Basic Grant and 10% is the Performance Grant, with the Performance Grant available from 2016-17 onwards subject to conditions.
The notification is directed at Village Panchayats and the government officers who verify applications, approve eligibility and release funds. It concerns funding for local civic services rather than private property transactions.
Eligibility requirements
A Village Panchayat must satisfy both conditions below:
- Submit an audit report for annual accounts relating to a year not earlier than two years before the year in which the grant is claimed.
- Show at least a 5% increase in tax and non-tax revenue collection over the previous year, as recorded in the audited accounts.
For the 2016-17 Performance Grant, the required audit report is for 2014-15. The corresponding audit years are 2015-16 for the 2017-18 grant, 2016-17 for the 2018-19 grant and 2017-18 for the 2019-20 grant.
Village Panchayats must assess house tax, professional tax, D & O trade revenue and other own-source revenue, finalise demand and complete collection before the end of March each year.
Application and verification
The grant process requires:
- An application jointly signed by the Village Panchayat President and Panchayat Secretary.
- Certification by the Deputy Block Development Officer (Audit) confirming the audit report and revenue increase.
- Checking by the Block Development Officer (Village Panchayats).
- A 10% super-check by the Assistant Director (Panchayats).
- Submission of the consolidated eligible list by the District Collector to the Director of Rural Development and Panchayat Raj.
The relevant audit report must be placed before the Grama Sabha. Village Panchayats must also submit Village Panchayat Form 30 online and regularly complete PRIA Soft online entries.
Use and release of funds
Performance Grant funds must prioritise operation and maintenance of water supply, street lights and sanitation. Current consumption charges owed to TANGEDCO and water charges owed to the TWAD Board are the first charge. Remaining funds may fill gaps in basic amenities under the Basic Grant guidelines.
District Collectors must release the entitlement to Village Panchayats immediately after receiving funds. Expenditure must be documented, and utilisation certificates must be collected and consolidated for submission to the Directorate.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Does this notification apply to individual property buyers or owners?
The notification sets funding conditions for Village Panchayats and contains no provisions about buying, selling or registering private property. Its funds support local services such as water supply, sanitation and street lighting.
What must a Village Panchayat do to qualify for the Performance Grant?
It must submit the required audited annual accounts and show at least a 5% increase in its own tax and non-tax revenue collection over the previous year.
What can a Village Panchayat spend the Performance Grant on?
The grant must prioritise operation and maintenance of water supply, street lights and sanitation. TANGEDCO current consumption charges and TWAD Board water charges receive first priority.
Who certifies a Village Panchayat's eligibility?
The Deputy Block Development Officer (Audit) certifies the audit submission and revenue increase, with a specific recommendation on eligibility. The proposal is then checked and consolidated through the Block Development Officer, Assistant Director (Panchayats) and District Collector.
