Himachal Pradesh Urban Local Bodies to Receive Monthly Grants-in-Aid

The Himachal Pradesh government has decided to release grants-in-aid to the states 61 urban local bodies on a monthly basis, rather than in one lump sum or in advance. The move is aimed at ensuring that the funds are utilized more effectively and efficiently.

The Urban Development Department of Himachal Pradesh has announced that the grants-in-aid to the state's 61 urban local bodies will now be released on a monthly basis, rather than in one lump sum or in advance. This decision was made in light of the natural disaster that occurred in July, which caused significant damage to infrastructure and property in many urban areas.

Previous Release and Return of Funds

In July, the government had released a total of Rs 153.64 crore in grants-in-aid to the urban local bodies under the Sixth State Finance Commission award. However, following the natural disaster, the Urban Development Department directed the commissioners of the municipal corporations, the executive officers of the municipal councils, and the secretaries of the nagar panchayats to return 50% of the grant, amounting to around Rs 76.82 crore.

New Guidelines for Grant Release

The decision to release the grants-in-aid on a monthly basis was made after the state finance department issued economy instructions and financial guidelines for incurring expenditure. The department observed that departments were releasing the grants-in-aid and subsidies for state schemes either in one go or, in some cases, quarterly in advance. After due consideration, the finance department decided that grants-in-aid and subsidies for state schemes should be released monthly.

Difficulties Faced by Urban Local Bodies

The urban local bodies have expressed concerns about the decision to return 50% of the grant-in-aid. They argue that they have already made various development plans and released the budget based on the funds received in July. Returning 50% of the grant-in-aid would be challenging and could hinder their ability to carry out essential development works.

Appeal for Reconsideration

BJP leader Karan Nanda has written to the Urban Development Department, requesting them to reconsider the decision to return 50% of the grant-in-aid. He highlighted that the urban areas have suffered huge losses during the recent monsoon season, and the funds are needed for rehabilitation and reconstruction efforts. Nanda also pointed out that the Shimla Municipal Corporation, which received a grant-in-aid of Rs 30.89 crore for rehabilitation after the natural disaster, will now have to return Rs 15.44 crore.

The decision to release the grants-in-aid on a monthly basis aims to ensure proper utilization of funds and prevent any misuse. However, the urban local bodies have genuine concerns about the challenges they face in returning 50% of the grant-in-aid. The state government should consider their appeal and explore alternative measures to address the financial needs of the urban local bodies, especially in light of the recent natural disasters and the ongoing monsoon season.