New funding mechanism for zila parishads, panchayat samitis

Despite protests by zila parishads in the state, the state government has allocated 40% of the funds of zila parishad and panchayat samiti for Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA).

On August 16, the panchayati raj department had issued an order stating that 20% funds of zila parishad and 20% funds of the panchayat samiti would be earmarked for MNREGA.

As per an earlier arrangement, 50% of the funds were allocated to zila parishad, 30% to panchayat samiti and the remaining 20% to panchayats.

However, under the current directive, zila parishads will be allocated 50% of funds, of which 20% will be allocated for MNREGA.

Similarly, 30% will be allocated for panchayat samitis, of which 20% will be allocated for MNREGA. Gram panchayats will be allocated 20% of funds for undertaking development work.

Rural development and panchayati raj minister Anil Sharma said the funds allocated for MNREGA would be kept in a separate account.

He said gap funding would soon be provided after the MGNREGA district plans were approved by the concerned block.

“I want to streamline the funding mechanism under the panchayti raj. Under the latest order, we have directed zila parishads, panchayat samitis and panchayats to follow the latest rules,” he said.

Earlier in July, the department had constituted a three-member committee to discuss the funding mechanism.

The committee had proposed to draft new funding guidelines so that maximum funds could be utilised. This came in the wake of reports of unspent funds lying with panchayati raj institutions.

A panchayati raj department official and a member of the committee told Hindustan Times that there were some cases where zila parishad members had announced funds for a project without obtaining permission.
He further said on various occasions, a majority of the funds had been utilised for yuvak mandals and mahila mandals, which was a sheer wastage of money.

Not only this, the department had also withdrawn funds for zila parishads and panchayat samitis under repair heads, he said.

“Fund was utilized by zila parishads and panchayat samitis for repair work but nothing significant was done. For repair works, there are sufficient funds under the MNREGA,” he said.

Chairman of Shimla zila parishad, Chandreshwar Prasad, who was spearheading the campaign of zila parishad members to not change the funding mechanism, said after this order, zila parishads would not be able to distribute funds easily as zila parishads and panchayat samitis had to submit proposals for development works to the House and only after it was sanctioned by the department, the work could be started.

“We will hold a meeting and decide our future strategy,” he said. Earlier, all zila parishad members had met chief minister Virbhadra Singh and rural development minister Anil Sharma regarding this issue.

New funding mechanism explained

Institution Fund allocation Funds earmarked for MNREGA
Zila parishads 50% 20%
Panchayat samitis 30% 20%
Gram panchayats 20% NIL