Finance is a simple task of providing the necessary funds (money) required by the business of entities like companies, firms, individuals and others on the terms that are most favourable to achieve their economic objectives."

1. Panchayati Raj Department
http://orissapanchayat.gov.in

2. GENERAL GUIDELINES
 The Finance Commission is being set-up every five years by
Government of India to discharge the mandate laid down in
articles 270, 275 and 280 of the constitution to perform 3
different types of tasks:-
 To recommend distribution, between Union and States,
of the net proceed of taxes out of divisible pool.
 To recommend the allocation between the different
States of such proceeds, and
 Thirdly, to recommend measures to supplement the
resources of the Panchyats and Municipalities by
augmenting the consolidated funds of individual States,
taking into account the recommendations of the
respective State Finance Commissions (SFCs).

3. 13th FC Recommendations
 For augmenting the resources of rural local bodies in terms of
award of grant based on certain principles. The grant have two
main components.
a) Basic Grant – For 5 years (2010-11 to 2014-15)
b) Performance Grant – For 4 years (2011-12 to 2014-15)
 A small portion of grants is allocated to Special Area covered
by the V & VI Schedules and areas exempted from the purview
of Part X and XI (A) of the constitution.
 This grant is called “Special Area Basic Grant”, and accessible
for all the five years to meet some of the development needs
of these areas.

4. Modalities of releasing 13 FC Grant
 During 1st year General Basic Grant is being provided to all GPs for implementation
various development measures and basing on this performance as well as fulfillment
of certain conditionality Incentive Performance grant shall be released.
 Incentive Performance Grant is available for the period from 2011-12 to 2014-15.
 The State is eligible to draw its allocations, if it complies with the following
conditions:
– Must put in place a Supplement Budget to the Local Bodies.
– Must have an audit system as stipulated by CAG and maintenance of accounts of
PRIs.
– Should appoint independent Local Body Ombudsman who will look into
complaints of corruption and maladministration against the functionaries of Local
Bodies, both elected members and officials and recommend suitable action.
– Should make necessary arrangement for electronically transferring Local Body
Grants (e-Transfer) within five days of receipt from Central Government.
– The State Government should adequately empower Local Body for levying
property tax and other taxes to raise the income of PRIs.

5. Grants Recommended by 13th FC
( in Crore)
2011-
Components 2010-11 2012-13 2013-14 2014-15 Total
12
1 General Basic
241.29 279.78 326.99 387.43 458.71 1694.20
Grant
2 General
0.00 95.66 224.41 264.70 312.23 897.00
Performance
3 Special Area Grant 19.39 19.39
Total 260.68 375.44 551.40 652.13 770.94 2610.59
The Commission have specifically recommended to use above grants
on the following components.
 Drinking water supply,
 Sewerage, Solid waste management (rural sanitation),
 Operational expenses (Maintenance of Accounts, Conducting of
Audits, Creation of the Database) etc.

6. Criteria for distribution of Grants
The grants have been distributed to the Panchayats based on their In Lakh
population.
Upto 5000 5001-7500 7501-10000 >10000
(3492 GPs) (2045 GPs) (572 GPs) (125 GPs)
Perform Perform Perform Perfor
Year Category Basic ance Total Basic ance Total Basic ance Total Basic mance Total
DW 1.75 0.00 1.75 1.92 0.00 1.92 2.08 0.00 2.08 2.15 0.00 2.15
Year 1
(10-11) Sanitation 1.63 0.00 1.63 1.77 0.00 1.77 1.91 0.00 1.91 1.98 0.00 1.984
Sub Total 3.38 0.00 3.38 3.69 0.00 3.69 3.99 0.00 3.99 4.13 0.00 4.134
DW 2.06 0.76 2.82 2.26 0.83 3.09 2.44 0.90 3.34 2.53 0.93 3.46
Year 2
(11-12) Sanitation 1.92 0.70 2.62 2.08 0.76 2.84 2.24 0.82 3.06 2.33 0.86 3.191
Sub Total 3.98 1.46 5.44 4.34 1.59 5.93 4.68 1.72 6.40 4.86 1.79 6.651
DW 2.43 1.78 4.21 2.67 1.95 4.62 2.88 2.10 4.98 2.99 2.18 5.17
Year 3
(12-13) Sanitation 2.26 1.65 3.91 2.45 1.79 4.24 2.65 1.93 4.58 2.75 2.01 4.764
Sub Total 4.69 3.43 8.12 5.12 3.74 8.86 5.53 4.03 9.56 5.74 4.19 9.934

7. Criteria for distribution of Grants
The grants have been distributed to the Panchayats based on their In Lakh
population.
Upto 5000 5001-7500 7501-10000 >10000
(3492 GPs) (2045 GPs) (572 GPs) (125 GPs)
Perform Perform Perform Perfor
Year Category Basic ance Total Basic ance Total Basic ance Total Basic mance Total
DW 2.91 2.09 5.00 3.19 2.30 5.49 3.45 2.48 5.93 3.58 2.57 6.15
Year 4
Sanitation 2.71 1.95 4.66 2.94 2.11 5.05 3.17 2.28 5.45 3.29 2.37 5.664
(13-14)
Sub Total 5.62 4.04 9.66 6.13 4.41 10.54 6.62 4.76 11.38 6.87 4.94 11.81
DW 3.48 2.47 5.95 3.81 2.71 6.52 4.12 2.93 7.05 4.27 3.03 7.3
Year 5
Sanitation 3.23 2.30 5.53 3.51 2.49 6.00 3.78 2.69 6.47 3.93 2.80 6.733
(14-15)
Sub Total 6.71 4.77 11.48 7.32 5.20 12.52 7.90 5.62 13.52 8.20 5.83 14.03
DW 12.63 7.10 19.73 13.85 7.79 21.64 14.97 8.41 23.38 15.52 8.71 24.23
G.Total Sanitation 11.75 6.60 18.35 12.75 7.15 19.90 13.74 7.72 21.46 14.30 8.04 22.34
G. Total 24.38 13.70 38.08 26.60 14.94 41.54 28.71 16.13 44.84 29.82 16.75 46.57

8. Criteria for distribution of Grants (As per Population of G.P)
(RS. IN LAKH)
G. P. 

9. Year 

10. Drinking water supply
Scarcity of drinking water in rural areas is seen to be a major problem, more
specifically, in tribal areas, this is very acute.
The Operation and Maintenance of Drinking Water Supply system including
Hand Pumps and Village Piped Water Projects is being directly managed by the
Gram Panchayats.
The Operation and Maintenance cost of these projects shall be met out of
these funds being provided to GPs.
GPs shall take over the Operation and Maintenance of these projects after due
physical verification and inventory by the RWSS and Rural Development
Department,
if not done already.
While taking up such physical assets, the current operation and maintenance
cost like energy charges can only be met out of the funds released under these
grants.
 Arrears, if any, shall not be paid out of the current provision of the 13th
Finance Commission Award.

11. Utilization funds for Drinking Water Supply
 The following expenditures are to be met out of 13th Finance Commission
Award.
– Procurement of spare parts for repair/rejuvenation of Water Supply
System (Hand pump, Tube wells & Pipe Water Supply).
– Payment of salary / wages of the RWSS employees deployed at Panchayat
Samities / Gram Panchayats including self employed mechanics.
– Payment of electric charges for PWS schemes (not arrear dues).
– Expenditures towards deployment of mobile vans for repairs of PWS
– Any other relevant purpose as per instructions issued by PR Department.
 A Gram Panchayat level purchase Committee in the Chairmanship of the
concerned B.D.O and other members i.e. Asst. Engineer, RWS & S and Junior
Engineer, RWS&S for procurement of materials from authorized
manufacturing firms/Suppliers as approved by the Chief Engineer, RWS&S for
repair / rejuvenation.
 The requirement of spare parts for maintenance of hand pumps, tube wells,
Pipe water Supply will be assessed by the Junior Engineer, RWS&S.

12. New water supply projects
a) Prepare micro plan of the GP for operation and maintenance.
o Technical assistance by RD Department / RWSS.
o Block wise list to be sent to PR Department by the DRDAs.
o A separate property / assets register shall be maintained at the GP
Level all such spot sources.
a) In the normal maintenance, self employed mechanics shall be engaged
by the Gram Panchayats and their remuneration would be met out of
these funds. Detailed accounts in this regard shall be maintained by the
Gram Panchayat indicating the stock and utilization.
b) The Operation and Maintenance of defunct hand pump.
c) Upgradation to pipe water supply scheme where good and quality
discharge of water sources by dovetailing funds from other scheme for
wider coverage.

13. Sewerage / Solid Waste Management (Rural Sanitation)/
Construction of C.C Road
 Construction of Cement Concrete Roads with Drain inside villages /
habitations of the GPs in their areas giving priority to different
habitations / villages in the following manners.
– First Priority : Primitive Tribal Group (PTG) villages /habitations ;
– Next Priority : ST/SC habitations/villages;
– Most populous village : If a block has already covered the above
two categories.
 While selecting the most populous village, the C.C. Road
should be planned for execution from ST/SC basti towards the
main habitation and not the vice-versa;
 If the most populous village of the G.P. has already been
covered up to the length of 500 meters, C.C. Road in the next
most populous village shall be taken up.
 The five years action plan based on the above principles should be
prepared and duly approved by Gram Sabha / Palli Sabha for taking of
the work.

14. Operational Expenses
All the GPs have already been supplied with Desktop, Laptop, Printer, MS
Office package etc out of 12th Finance Commission Grants,
The 13th Finance Commission have emphasized on maintenance of
accounts, conducting audit in each GP, entering into prescribed accounting
software to meet these expenses @ 2000/- per month per GP to be
provided for the above purposes. Out of this, 500/- per month for each
G.P. for operation and maintenance of computers and other consumable
peripherals shall be released directly to Gram Panchayats.
The monthly remuneration of Computer Programmers @ 9300/- is to
be met out of 13th Finance Commission Award, as was being done earlier.
A 20 seated digital database management system with LAN has been
setup in all the 314 blocks out of 12th Finance Commission Grant. A sum of
20,000/- per year per block is being provided for maintenance of the above
infrastructure out of the present grant.

15. DISTRICT-WISE DISTRIBUTION OF 13TH FINANCE COMMISSION AWARD FOR DRINKING
WATER, SEWERAGE AND SOLID WASTE MANAGEMENT (SANITATION) FOR THE YEAR
2010-11 (SPECIAL AREA GRANT TO SCHEDULED AREA DISTRICTS)
In Lakh
Sl No District No. of Gram Panchayats Total
including
Outgrowth/Census Town
etc.
1 BALASORE 25 25.00
2 GAJAPATI 96 93.00
3 GANJAM 23 23.00
4KALAHANDI 37 36.00
5 KORAPUT 227 225.00
6 MALKANGIRI 108 107.00
7 NABARANGPUR 170 176.00
8 PHULBANI 153 149.00
9 RAYAGADA 174 172.00
10 KEONJHAR 222 221.00
11 MAYURBHANJ 383 390.00
12 SAMBALPUR 55 54.00
13 SUNDARGARH 268 269.00
ORISSA 1941 1939.00

16. Utilisation of Special Area Grant
 Apart from General Basic Grant and General Performance Grant, the
13th Finance Commission have considered additional allocation of funds
for development of scheduled areas.
 There are as many as 1925 Gram Panchayats and 16 nos of Out
Growth/ Census Town/ Industrial and Educational Township etc.
covered under the Scheduled Areas in Orissa.
 The additional allocation will supplement the fund already available with
them out of Basic and Performance Grants for providing the basic
services like Supply of Drinking Water, Sewerage and Solid Waste
Management (Rural Sanitation) etc.
 The guidelines for utilization of funds as outlined for General Basic Grant
and General Performance Grant shall duly be adhered to for utilization
of funds under Special Area Grant also.

17. Submission of U.Cs
 The concerned PS/ GPs are responsible for timely utilization of the funds so
released and submission of Utilization Certificates.
 The Collectors and Project Director of DRDAs should review the position in
regard to utilization of funds and submit quarterly review report regularly to this
Department by 2nd week of each quarter.
 The Panchayat Samiti/ Gram Panchayat shall maintain separate account for
receipt and utilization of funds out of 13th Finance Commission Award.
 The monthly expenditure statement along with progress of works taken up shall
be furnished by the Districts to this Department by 5 th of the every month
regularly.
 The Project Director of DRDAs / District Panchayat Officers shall collect the
Utilisation Certificates from the Block Development Officers and submit the
same to this Department in time.
 Funds released should be utilized at the earliest following due procedure.
 Under no circumstances, funds released shall be utilized for any purpose other
than those specified in the instructions issued above.

18. Panchayati Raj Department
http://orissapanchayat.gov.in