*Stronger Financial Framework For Local Bodies Essential To Strengthen Grassroots Governance: CM Bhagwant Singh Mann*
*Disciplined State Fiscal Path & Durable Fiscal Institutions Needed For Financial Sustainability Of Panchayats, Municipalities: CM Bhagwant Singh Mann*
*Commission To Make Practical, Forward-Looking Recommendations For Strengthening Fiscal Capacity Of Local Bodies: CM Bhagwant Singh Mann*
*Commission To Submit Report By September 30, 2027, Covering 5-Year Period From April 1, 2026: CM Bhagwant Singh Mann*
CHANDIGARH; 22nd September 2026:
Chief Minister Bhagwant Singh Mann on Tuesday called for a stronger financial framework for urban and rural local bodies, stressing the need for a disciplined state fiscal path and durable fiscal institutions to ensure financial sustainability and effective grassroots governance.
Chairing a meeting with the newly constituted Seventh Punjab Finance Commission, CM Bhagwant Singh Mann said, “The Commission has been constituted to make specific recommendations for distribution of taxes, duties, road tax and others amongst the Panchayats/Municipalities and the state, besides making further recommendations for improving the fiscal health of these civic bodies.”
The Chief Minister stated, “The Commission is a constitutional instrument for ensuring fiscal decentralization to Panchayati Raj institutions and Municipalities. It seeks to ensure that the grassroots institutions created under the 73rd Constitutional Amendment have the financial capacity to discharge their responsibilities effectively.”
Welcoming the Chairman and Members of the Commission, he said, “The State Finance Commission has an important responsibility to examine the financial position of Panchayati Raj Institutions and Municipalities and recommend a framework for strengthening fiscal devolution and financial sustainability of local governments.”
“There is a need for a transparent, equitable and sustainable system of resource devolution, keeping in view the increasing responsibilities of Panchayats and Urban Local Bodies in delivering essential civic services and creating local infrastructure,” he said.
The Chief Minister said, “I hope that the Commission will undertake a comprehensive assessment of the revenue potential, expenditure responsibilities and financial requirements of local bodies, and make practical and forward-looking recommendations to strengthen their fiscal capacity and enable them to discharge their functions effectively.”
CM Bhagwant Singh Mann said, “The Commission has the mandate to recommend the distribution between the state and the Panchayats/Municipalities of the net proceeds of the taxes, duties, tolls and fees leviable by the State which may be divided between them.”
“The significance of the Commission can be well gauged from the fact that it also recommends the allocation among the Panchayats/Municipalities at all levels of their respective shares of such proceeds,” he said.
The Chief Minister further said, “The Commission is also imperative for recommending the measures needed to improve the financial position of the Panchayats/Municipalities.”
Likewise, CM Bhagwant Singh Mann said, “The Commission also recommends measures to reduce unproductive revenue expenditure and steps to improve the quality of administration and technical support for efficient and effective use of capital resources. To undertake this important task, the Seventh Punjab Finance Commission has been constituted by the Punjab Government under Section 3(1) of the Punjab Finance Commission for Panchayats and Municipalities Act, 1994, under the chairmanship of former Additional Chief Secretary of Punjab K. Siva Prasad.”
“The Commission also includes Shoikat Roy as Expert Member, Administrative Secretary, Rural Development & Panchayats, Government of Punjab, and Administrative Secretary, Local Government, Government of Punjab, as Ex-officio Members and Special Secretary Finance, Government of Punjab, as the Ex-officio Member Secretary,” he said.
Extending best wishes to the newly appointed Chairman and Members of the Commission, CM Bhagwant Singh Mann said, “The state government will extend fulsome support and cooperation to the Commission for this important task.”
The Chief Minister said, “The Commission will make its report available by September 30, 2027, covering a period of five years commencing on April 1, 2026. In the larger public interests, the Commission shall indicate the basis on which it has arrived at its findings.”
Additional Chief Secretary Alok Shekhar, Secretary Rural Development, Secretary Local Government and others were also present on the occasion.
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