In a significant step towards advancing data-driven fiscal decentralisation and strengthening grassroots governance, Dr V. Anantha Nageswaran, Chief Economic Adviser to the Government of India, on Monday released the Report of the Committee on Datasets for State Finance Commissions.
Addressing the gathering, Nageswaran observed that citizens experience governance through the availability of basic services such as drinking water, roads, street lighting and Anganwadi services, making empowered Panchayats central to effective governance.
He noted that fiscal decentralisation is ultimately about bringing governance close enough to people to positively impact their lives. State Finance Commissions, he said, can make sound recommendations only when they have access to reliable, timely and granular data. “Better data leads to better governance,” he remarked.
Emphasising that the quality of resource-allocation decisions is directly linked to the quality of data and analysis available, Nageswaran described the report as an important step towards strengthening the information architecture for local governance.
He also highlighted the report’s recommendation that the Comptroller and Auditor General (CAG) undertake a performance audit of the implementation of the 73 Constitutional Amendment across states. The proposed audit would assess the extent of functional, financial and administrative devolution to Panchayati Raj Institutions, further reinforcing accountability and deepening the gains of constitutional decentralisation.
Vivek Bharadwaj, Secretary, Ministry of Panchayati Raj (MoPR), highlighted two key outcomes of the ministry’s sustained engagement with the Sixteenth Finance Commission.
First, recognising the governance needs of India’s rapidly expanding peri-urban areas, the Commission has proposed an Urbanisation Premium of Rs 10,000 crore to support local bodies managing the transition of census towns into urban entities. Bharadwaj described it as the first dedicated national initiative aimed at addressing the challenges and opportunities of peri-urban transformation.
Second, he noted that the Commission has reintroduced a performance-based grant framework, allocating Rs 87,000 crore exclusively for Panchayats. This, he said, would further incentivise improved governance and service delivery at the grassroots level.
