State Finance Commission chairman calls for authority, greater fiscal autonomy for local bodies

Greater fiscal autonomy and resources are what Tamil Nadu's Seventh State Finance Commission chairman K. Allaudin advocated for local bodies on Thursday. He emphasized that without adequate and predictable financial resources, no institution can exercise meaningful autonomy and fulfill its duties. Local governments currently rely heavily on transfers from the Union and State governments.

Municipal Administration and Water Supply Department Secretary Gagandeep Singh Bedi highlighted that own sources of revenue (OSR) for rural local bodies in various States, derived from property, professional taxes, rentals, and charges, typically ranged from 1% to 8%. In contrast, property tax collection in OECD countries averages 1.1% of GDP, while in India, it is only 0.2%.

To enhance the development of cities and villages, Bedi suggested increasing property tax collection. Regarding local body functions, Bedi also addressed the issue of spouses of elected women representatives informally assuming their roles, despite 50% reservation of seats for women in certain States. He called for empowering women elected representatives.

Joint Secretary in SSFC V. Anbazhagan addressed the issue of GIS-based tax collection and emphasized the importance of solid waste management, user charges, parking fees, and other revenue augmentation methods. Rural Development and Panchayat Raj Department Secretary Dharmendra Pratap Yadav highlighted the state government's initiative, Tamil Nadu Village Empowerment, Transformation and Rejuvenation Initiative (TN-VETRI), and stressed the need for authority to rural local bodies to levy and collect taxes.

Yadav criticized the bureaucratic environment and called for self-government models that are accountable to the people. Rural Development Department Secretary Dharmendra Pratap Yadav also requested an increase in devolution funds from 10% to 12%. Former Director of National Institute of Public Finance and Policy M. Govinda Rao emphasized the importance of clarifying local body functions and the need for autonomy to raise revenue in his inaugural address.