Facilitating Technical Support to 6th State Finance Commission, Sikkim for preparation of draft SFC report

Date 17-Apr-2023 to 02-Jun-2023

Location Sikkim

Format Local

Constitution of 6^th State Finance Commission

Articles 243 I and 243Y of Constitution of India prescribes for constitution of State Finance Commission in State to review financial position of the Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) and to make appropriate recommendations for strengthening financial capacities of PRIs and ULBs. Accordingly, and as per Sikkim Panchayat and Municipalities Acts and in pursuance of section 3 of Sikkim (Constitution of Finance Commission) Rules, 1995, the Governor of Sikkim has constituted the Sixth State Finance Commission vide Notification GoS/FCD/Fin/2021-22/01/273, dated 20/06/2022, to review the financial position of the Local Bodies and to make recommendations to the Governor as to the following matters, namely:

 

1. The principles which should govern:

• The distribution of fund between the State and the Local Bodies namely Zilla Panchayats, Gram Panchayats, Municipalities, Municipal Councils and Nagar Panchayats, of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under part IX and IX A of the Constitution of India and the allocation between Zilla Panchayats, Gram Panchayats and Urban Local Bodies at all levels of their respective shares of such proceeds.
• The determination of the taxes, duties, tolls and fees which may be assigned to or appropriated by the Zilla Panchayats, Gram Panchayats, Municipalities, Municipal Councils and Nagar Panchayats.
• The Grants-in-Aid to the Zilla Panchayats, Gram Panchayats, Municipalities, Municipal Councils and Nagar Panchayats from the Consolidated Fund of the State.

2. The measures needed to improve the financial position of the Zilla Panchayats, Gram Panchayats, Municipalities, Municipal Councils and Nagar Panchayats.
3. The Commission shall also:

• Examine and suggest the extent to which and the manner in which the resource available to the local bodies could best be utilised for meeting the expenditure of the bodies.
• Make a detailed analysis of the repayment of loans and advances, if any, extended by the government from time to time to the local bodies and make suitable recommendations for repayment of government dues and make possibility of adjusting these dues against future devolution of revenues from Government to these bodies;
• Examine the resources of the Local Bodies for the five years commencing on 1^st April 2025, on the basis of the existing and proposed level of taxation and non-tax revenues likely to be reached by the end of fiscal year 2029-30. Any new taxes and duties leviable during the award period may be taken into consideration.

4. In making its recommendations, the Commission shall have regard to, among other things:

• The resources of the State Government and the demands thereon, on account of expenditure on civil administration, debt servicing, development and other committed expenditure of the Local bodies.
• Suggest improving the quality of public expenditure to obtain better outputs and outcomes;
• Examine the component of maintenance and upkeep of capital assets created by the Local Bodies or transferred by the Government to the Local Bodies.

5. In making its recommendations on various matters, the Commission shall take the base of population figure as of 2011, in all such cases where population is a factor for determination of devolution of taxes, duties and grants-in-aids.
6. The Commission shall indicate the basis on which it has arrived at its findings and make available the estimate of receipts and expenditure of each tier of Local Bodies within the State

Composition of the 6^th SFC

The chairperson and members of the current State Finance Commission are:

1. Tashi Cho Cho Chairperson
2. Roshni Rai Member
3. Tenzing Dorjee Member
4. Raj Narayan Pradhan Member Secretary

Functioning of the Commission

The 6^th SFC started its functioning immediately after its constitution. It has engaged the PRIA Education Trust (www.pria.org) as technical support agency to provide supports to the SFC in generation and analysis of appropriate data to arrive at suitable recommendations. Besides, compilation and analyses of data from various governmental departments and other credible sources, the SFC intends to consult several important stakeholders from Sikkim to receive their inputs and suggestions for preparation of the report. So, a series of consultations with different stakeholders were organised from 17- 21 April and 29 May- 2 June 2023. 

CONSULTATIONS- PHASE 1

Consultation 1- With the members of past State Finance Commissions of Sikkim

Date- Monday, 17^th April 2023

Participants: Chairpersons, Members and Member Secretaries of past and current (6^th) SFCs and Members of PRIA

Objective

• To discuss the experiences of members
• Recommendations for the preparation of 6^th SFC report

Consultation 2- Meeting with ULB officials at Urban Development Department

Date- Tuesday, 18^th April 2023

Participants: Chairpersons, Members and Member Secretary of the 6^th SFC, Nodal Officials (officials who are posted in the field and are directly associated with functioning of the ULBs and their finances) from all the ULBs in Sikkim, Official of the UDHD in Gangtok, who are directly concerned with functioning of ULBs in the state and Members of PRIA

ObjectiveS

• To understand the implications of past SFC recommendations – what differences 5^th and 4^th SFC recommendations made to improve functioning and finances of the ULBs
• What are current opportunities and challenges at ULB levels, which should be addressed by the 6^th SFC
• Capacity building and financial requirements of ULBs with special reference to newly constituted ULBs in the state

Consultation 3- Meeting with Rural field functionaries (ADC (Dev)/BDOs/ADs/VAA/PDAs, & other frontline workers) and Nodal officers from the  RMDD who are directly associated with the functioning of PRIs in the state

Date- Wednesday, 19^th April 2023

Participants: Chairpersons, Members and Member Secretary of the 6^th SFC, Rural Field functionaries (ADC (Dev)/BDOs/ADs/VAA/PDAs and other frontline workers of PRIs), RMDD Nodal Officers and Members of PRIA

Objectives

• To understand the implications of past SFC recommendations in improving the functioning and finances of the PRIs in the state.
• To understand current opportunities and challenges at Gram and District Panchayat levels, which should be addressed by the 6^th SFC
• Capacity building and financial requirements of GPUs and ZPs with special reference to newly constituted Districts.

Consultation 4- Meeting with State level officials from RDD, UDD and Finance Department

Date- Wednesday, 19^th April 2023

Participants: Chairpersons, Members and Member Secretary of the 6^th SFC, State level officials of RDD, UDD, Finance Department and Members of PRIA

Objectives

• To understate the current state of Devolution and Activity Mapping of the 3Fs (Finances, Functions and Functionaries) for PRIs and ULBs
• To understand the issues in devolution among PRIs and ULBs vis-a- vis the SFC reports
• To assess State’s preparedness for implementation of SFC recommendations.

 

Consultation 5: Discussions with the SFC Members

Date: 21 April 2023

To discuss the emerging issues from the compiled data and the recent consultations.

 

CONSULTATIONS- PHASE 2

During the first phase of its consultation meetings, the 6^th SFC hosted meetings with the members of past SFCs of Sikkim, field officials of the ULBs, and senior officers of the departments of Rural Development, Urban Development and Finance and Revenue. A meeting was also held with more than 300 representatives, which included VAAs/PDAs of almost all GPUs in Sikkim and associated BDOs, ADCs and ADs. Finally, an internal discussion was held within the 6^th SFC to review the experiences of recently held consultations, quality of data available and needed, possibilities of a quick study on implications of past SFC recommendations and ways forward for the 6^th SFC to discuss and decide on its strategies and suggestions for future recommendations.

In continuity of the above consultations, the second phase of consultations were organised from 29^th May- 2^nd June 2023.

Consultation 5 - Meeting with the Elected Members of GPs (award winning, remote and newly constituted

 

Date- Monday, 29^th May 2023

Participants: The participants could be progressive elected representatives who have been publicly awarded/appreciated for their work, elected members from remote and newly constituted GPs.  All districts/regions should be represented. It should be ensured that good numbers of women (and other marginalized section) should participate in this meeting. Since most of the elected representatives are new, if RMDD feels fine, some past GPU members could also be invited to this meeting. It would be useful for constructive discussions if the number of participants is restricted to remain manageable (less than 60).   

Objective

• To understand the GPUs experiences with past SFC recommendations.
• To understand current opportunities and challenges at Gram Panchayat levels, which should be addressed by the 6^th
• Capacity building, Resource Mobilization, and additional financial requirements of GPUs
• Additional financial requirements and capacity building for remote and newly constituted GPUs.

 

Consultation 6 - Meeting with the Members of all Zilla Panchayats (ZP Adhyaksha, Upa Adhyaksha, DCs (Sachiva) and DPOs

 

Date- Monday, 29^th May 2023

Participants: All the Adhyaksha and Upa Adhyaksha of ZPs and 2 or 3 selected members from each ZP (including women members) should participate in this meeting. The DCs (Sachiva) and DPOs of all 6 ZPs should also be invited to participate in the meeting.  

Objectives

• To understand the implications of SFC recommendations in functioning of the ZPs.
• To understand current challenges and opportunities with the ZPs. The functional relationships between ZPs and GPUs.
• Capacity building, Resource Mobilization, and additional financial requirements of ZPs

Consultation 7 - Meeting with Elected Members of ULBs (Mayor, Deputy Mayor, Chairperson, Vice Chairperson, President, Vice President, MEOs)

 Date- Tuesday, 30^th May 2023

Participants: All Elected Members of ULBs (Mayor, Deputy Mayor, Chairperson, Vice Chairperson, President, Vice President, MEOs) of all 7 ULBs in Sikkim should be invited to this meeting. Since most of ULB members are newly elected, if it is possible, some knowledgeable past members of the ULBs could also be invited to share their experiences.

 Objectives

• To understand the overall experiences of ULBs with past SFC recommendations.
• To understand current opportunities and challenges at ULB levels, which should be addressed by the 6^th
• Capacity building, Resource Mobilization, and additional financial requirements of ULBs
• Additional Capacity building, Resource Mobilization, and additional financial requirements of newly constituted ULBs

Consultation 8 - Meeting with the SIRD and Skill Development Department, other Capacity Building Organizations of the Government of Sikkim

 Date- Tuesday, 30^th May 2023

Participants: The Director and other faculty members, who are responsible for training of the PRI and the ULB functionaries and representatives should participate. Skill Development Department and other agencies of the Government of Sikkim, which build capacities of the PRIs and ULBs should also participate.    

Objectives

• To understand the issues in Capacity building of PRIs and ULBs
• What additional capacities are required by SIRD and other capacity builders?
• Support expected from the 6^th

Consultation 9 - Meeting with the CSR Representatives

 Date- Thursday, 1^st June 2023 (11.00 AM- 01.00 PM)

Participants: All CSR representatives of private and public sector companies working in Sikkim should participate. The key representatives of nodal departments (for companies and CSR) should also participate. 

 Objectives

• To understand the current context of CSR initiatives of the companies and their existing or possible links with the GPUs or ZPs or ULBs?
• How PRIs and ULBs could access CSR funds. What additional capacities the LBs may require for using CSR funds?
• What could be the best institutional mechanism, which SFC may suggest, for optimal use of the CSR funds. How corporate talents could help the PRIs and ULBs?

Consultation 10 - Meeting with the Representatives of Self-Help Groups (SHGs) and Farmer Producer organizations (FPOs).

 Date- Thursday, 1^st June 2023

Participants: The representatives of selected SHGs and FPOs should participate in the meeting. The local government officials who directly deal with SHGs or FPOs should also be invited to this meeting. The total number of participants should not be more than 30.    

Objectives

• To understand the framework of current relations of SHGs and FPOs with PRIs and ULBs
• How PRIs and ULBs could develop mutually beneficial relationships with the SHGs and FPOs?
• Suggestions for the 6^th SFC to explore institutionalization of relationships of SHGs and FPOs with the Local Bodies.

Consultation 11:  Internal Meeting of the 6^th SFC

Date- Friday, 2^nd June 2023

Participants: Chairperson and Members of 6^th SFC.    

 

Objective

To discuss the emanating issues from recently concluded meetings to formulate final criteria for resource allocation and 6^th SFC recommendations. And to finalize different sections of the 6^th SFC report.