Ministry of Panchayati Raj (FD Division) ****** Minutes of the National Workshop on Increasing Own Source of Revenue (OSR) by Pa
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Ministry of Panchayati Raj (FD Division) ****** Minutes of the National Workshop on increasing Own Source of Revenue (OSR) by Panchayats at Chitrakoot, Madhya Pradesh on 28th February – 1st March, 2017 Day: 1 (28.2.2017) of the workshop: 1. Inaugural Session: 1.1 Two Day National Workshop on “Increase in Own Source Revenue (OSR) by Panchayats” was organized by the Ministry of Panchayati Raj (MoPR) during 28th February and 1st March, 2017 at Deendayal Research Institute (DRI), Chitrakoot, Madhya Pradesh in coordination with the State Institute for Rural Development (SIRD), Jabalpur. The workshop was inaugurated by Shri Narendra Singh Tomar, Hon’ble Minister of Panchayati Raj, Rural Development and Drinking Water and Sanitation. The workshop was attended by officers/ officials of the Ministry of Panchayati Raj, representatives of the State Panchayati Raj Department and SIRDs. The list of participant is at Annexure-I. 1.2 Hon’ble Minister of Panchayati Raj, Rural Development and Drinking Water and Sanitation in his inaugural address said that the venue has been selected with a view to give the participants a feel of the ground reality as it is found in rural areas of the country so that when programmes for strengthening the local bodies or for the rural population are conceived in future, the ground reality in the rural areas is properly reflected in the programmes. He further said that the first priority of the Union Government is to develop the rural areas for which a substantial allocation of Rs.1.28 lakh crore has been proposed in the budget for FY 2017-18. Emphasis of the Government is to ensure nation building through the development of the rural areas. In this context The Hon’ble Minister elaborated that the villages also need to change their approach towards resolving issues concerning them from a narrow and local approach to a more broader and national perspective so that the problems can be resolved in a more holistic manner. 1.3 Hon’ble Minister further stated that Fourteenth Finance Commission (FFC) has allocated sizable sum of money to the rural local bodies for delivery of basic services to the local population. To ensure proper and efficient use of the huge grant, Government should provide sufficient training and other technical assistance to enhance the capacities of the panchayat representatives and functionaries so that outcomes justify the huge allocation. In the context of the two Day Workshop on increase of OSR, the Hon’ble Minister further highlighted the following issues for discussion/deliberation in the workshop: Generation of revenues by Panchayats from the various services they give to the local populace; The training and capacity building requirements of the officials and the elected representatives including Gram Sarpanches for OSR generation and digital transactions. Impact of GST on the revenues of the Rural Local Bodies. 1 Operational and policy level changes for enhancing OSR mobilization at the GP level. 1.4 Secretary, Ministry of Panchayati Raj (MoPR), Government of India (GoI) at the outset welcomed the participants of the workshop. He stated that there are various schemes of the Government of India for rural development under which Panchayati Raj Institutions (PRIs), specifically Gram Panchayats can play substantial role in implementations and service delivery. The experience of the elected representatives of Panchayats from different States attending the workshop in bringing substantial changes with the available resources either received from Central and State Governments and also resources generated by themselves could be an important learning experience which could be replicated in other villages also. 1.5 Secretary, MoPR further stated that meaningful and deliverable planning is only possible with the availability of base line data. SIRDs could play a significant role in making available all the necessary village/ block/ district level data. The issue of availability of adequate funds, functions and functionaries in Panchayats have remained discussion points at different fora. However, now substantial funds are flowing through PRI specifically to Gram Panchayats (GPs) under FFC and for the implementation of various Central and State Government schemes. The funds available under Central and State, which define the functional areas of GPs. Various manpower resources available at GP level under different schemes, effective coordination and convergence of available manpower could resolve the problems of manpower requirement for effective service delivery. He also informed that Rastriya Gram Swaraj Abhiyan (RGSA) is being restructured, which may also have provisions for the manpower apart from other components. 1.6 Joint Secretary, MoPR, GoI, made a power point presentation of the overview and objective of the workshop. He stated that the workshop has been structured in six Technical Sessions, which would be chaired by experts from different institutions. The purpose and outline of the technical sessions were briefly explained which are as under: (i) GST and impact on local government finance: The Session is expected to touch upon the various aspects of the legislation with particular reference to its impact on the revenues of the Rural Local Bodies. (ii) Review of Accounting and Auditing structure in States & progress on the Roadmap prepared in the previous OSR Workshop: In this session, the States are expected to present the details regarding accounting and auditing structure put in place by the State Governments in compliance with the condition of Performance Grant under FFC. A review on the progress made by various States on the roadmap prepared in the previous Workshop will also be made. (iii) Action taken by the States on less cash and digital transaction: In this session, it is proposed to review the status of training and awareness campaign conducted by the States in PRI system regarding digital mode of financial transactions. 2 (iv) Furnishing Information on Financial Empowerment of PRIs: In this session, the States are expected to present the details regarding financial position of PRIs pertaining to following areas: Various Heads and State Sponsored Schemes under which PRIs are receiving grants from the State Average amount of grants received by the PRIs under various Heads from the State Present Status of Financial Power of PRIs as per the PRI Act of the State Total Own Source of Revenue Mobilized by PRIs (v) Bringing policy level changes for enhancing OSR mobilization at the GP level: This session will highlight the possibility of rationalizing and reviewing age old Financial Rules of the Sates, concerning OSR mobilization at the GP level. It would also explore the existing potentials of levying new taxes and non-taxes for OSR mobilization. (vi) Undertaking operational level changes with regard to tax administration and tax enforcement: The session is expected to throw light on the possibility of simplification of concerned Financial Rules/GOs for lowering the number of defaulters; possibility of simplification of the concerned Financial Rules/GOs for efficient tax administration and possibility of simplification of concerned Rules/GOs for recovery of old and new tax arrears while considering inadequate GP level functionaries. 1.7 JS also mentioned that the Government of India is giving thrust on digital (cash-less/ less- cash) financial transactions. Efforts are being made to build capacity of people to adopt mode of digital financial transactions. Central and State Government have conducted various training in this regard to Government officers/ employees. Further, Special emphasis are being made to adopt this system especially in the rural areas and PRI system. State Panchayati Raj and Rural Development Departments were requested to create awareness among PRI and also to conduct Special Gram Sabha meetings to create awareness on digital financial transactions. 1.8 The elected representatives of well performing Gram Panchayats were invited to share their experiences to foster the cross learning. Sarpanch, Village-Dalauda Chaupati District-Mandsaur, Madhya Pradesh shared his experience and highlighted following points: 5000 dustbin has been distributed to all houses and shops and Rs.20/- per house/shop per month charged for collection of garbage. Organic fertilizer prepared from garbage and sold, which is a source of income for the GP. LED street lights has been fixed at 590 places in the villages. Rs.20/- per house/shop per month is being charged for the lighting, which generate enough funds for Operation and Maintenance (O&M). Shops constructed at the land of Gram Panchayat and rented, yield a permanent source of income for GP of around Rs.45,000/ per month. Permission for the construction of houses and payment of house tax is mandatory. Defaulters will not get any kind of certificate from GP. 3 Boards for the advertisement has been constructed at main entry points and cross over of the village which are rented for advertisement. Though this source around Rs.85,000/ has been generated in 21 month. 1.9 Sarpanch, Village-Kodariya, District-Indore Madhya Pradesh also shared her experience and highlighted following points: Every house has been provided two dustbin and garbage being collected from house to house. Organic fertilizer is being prepared from garbage and sold, which is a source of income for the GP. Village is known for making potato chips which create employment opportunities not only for the villagers but also to neighbouring villagers. Management of waste created from this activity was a challenge, which has been addressed with adequate waste management and preparation of organic fertilizer from the waste, which has become source of income for the GP. 2. Technical Session-1: GST and impact on local government finance: 2.1 This Technical Session was chaired by Dr. Ramalingam, Associate Professor, Gulati Institute of Finance and Taxation (GIFT), Thiruvananthapuram, Kerala. Dr. Ramalingam made a detailed presentation on “Goods and Services Tax (GST) and the changing contours of local finance. A copy of the presentation is at Annexure-II.