The 14th Finance Commission (14th FC / XIV FC) constituted by the President on January, 2, 2013 to give recommendations on specified aspects of Centre State fiscal relations during 2015-20. The 14th FC submitted its report to the President of India on 15-12-2014 and the report is made available by Government of India on their website www.fincomindia.nic.in. The Government of India accepted the recommendations of 14th FC which cover the period 2015-2020.
As per para 9.73 of the report of 14th FC, the amount is to be disbursed as per the recommendations of State Finance Commission (SFC) if any are there. in case the SFC formula is not available, then the share of each of the three tiers of ULBs will be determined on the basis of the population of 2011 with a weight of 90% and area with a weight of 10% and then distributed among the entities in each tier in proportion to the population of 2011 (Census 2011) and area in the ration of 90:10.
The 14th FC has recommended that local bodies should be required to spend the grants only on the basic services within the functions assigned to them under relevant legislations. The 14th FC has recommended grants in two parts : (i) Basic Grant and (ii) Performance Grant for duly constituted ULBs, division between basic and performance grant will be 80:20 basis. The share of Andhra Pradesh in respect of Grants for Urban Local Bodies (ULBs) for the period from 2015-2016 to 2019-2020 i.e., five year period is as follows:
- GoI have allocated an amount of Rs.3635.80 Crores to Urban Local Bodes in the State of Andhra Pradesh under 14th FC grants.
Out of which basic grant allocated to Urban Local Bodies of Andhra Pradesh is Rs.2908.64 Crores (80%) and performance grant is Rs.727.16 Crores (20%).
The allocations of the amount to the ULBs is to be made based on Census-2011 Population with a weight of 90% and area with a weight of 10%
For the release of Performance grants from 2016-17 onwards, the ULB has to fulfill the following conditions from the year 2015-16 onwards.
1. Submission of Audited Annual Accounts for the year 2014-15.
2. Improvement in own municipal revenue over the preceding year as reflected in the audited accounts: all ULBs shall make efforts to show an increase in own municipal revenues from the year 2015-16 over the preceding year i.e., 2014-15 at least by 5% of the total revenues. All ULBs shall submit the following information to State Audit department to verify whether there is any improvement in own municipal revenues for the year 2014-15 over the preceding year 2013-14. Own revenues means receipts from Tax and Non-Tax sources only. Assigned Revenues (i.e., Entertainment Tax, Surcharge on Stamp Duty, Profession tax compensation) Plan and Non-Plan grants and Loans shall be excluded from own municipal revenues. ULBs which have achieved 5% or more increase in municipal own revenues during 2014-15 over the preceding year 2013-14 will be eligible for Performance Grant for the year 2016-17.
3. Measurement and publication of Service Level Benchmarking (SLB) for the basic services (a. Water Supply, b. Sewerage and Sanitation, c. Solid Waste Management and d. Storm Water Drainage) provided by the ULBs. Publication of SLBs relating to basic urban services for each year from 2015-16 is to be prepared by each ULB and publication in the District Gazette and made available to the residents of the ULBs.