Grants-in-aid to be released on monthly basis to local bodies in Himachal

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The grants-in-aid to Himachal Pradesh's 61 urban local bodies would henceforth be released on a monthly basis and not in one lump sum instalment or in advance, according to the Urban Development Department.

The grants-in-aid of about Rs 153.64 crore was released and credited to the accounts of all urban bodies on July 25 under the Sixth State Finance Commission award.

But the Urban Development department wrote to commissioners of the municipal corporations, the executive officers of the municipal councils and the secretaries of the nagar panchayats after the natural disaster in July, directing them to return 50 per cent of the grant amounting to around Rs 76.82 crore.

The state finance department, vide its notification of August 8 issued economy instructions and financial guidelines for incurring expenditure and observed that departments are 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 has decided that grants-in-aid and subsidies for state schemes be released monthly.

Subsequently, another letter was sent to all the urban local bodies on September 23, requesting them to return 50 per cent of the grant-in-aid so that it could be released every month, said an additional director of the Urban Development department in a letter to BJP leader Karan Nanda.

Nanda had asked for reconsideration of the decision to send back 50 per cent of the grant-in-aid.

After receiving the grants-in-aid in July, the urban bodies have made various development plans and also released the budget. It has now become difficult for them to return 50 per cent of the grants-in-aid, the BJP's state media in-charge told PTI on Thursday.

Some of the urban local bodies have already prepared plans and already spent the money and they are in a fix "how to return" 50 per cent grant, said a sitting councillor of the municipal corporation.

Nanda had in his letter to the urban development quoted the commissioner of the Solan Municipal Corporation, stating that "many development works have already started in Solan and the budget is being spent on schemes".

Nanda said there has been a huge loss of life and property in Shimla due to a natural disaster in August and a grant-in-aid of Rs 30.89 crore was received by the municipal corporation for rehabilitation which was very little. But now, the Shimla Municipal Corporation will have to return Rs 15.44 crore out of this, the BJP leader said.

He added that the state government should not only withdraw its letter to return a 50 per cent grant-in-aid but release more funds to the urban local bodies as most of the urban areas have suffered huge losses during the recent monsoon season.

Under the Sixth State Finance Commission, a total of Rs 67.49 crore was released to the five municipal corporations, including Shimla, out of which, Rs 33.74 crore will have to be returned.

Similarly, the grants-in-aid of Rs 66.60 crore were released to all 29 municipal councils and Rs 19.54 crore to 27 nagar panchayats and out of this Rs 19.54 crore and Rs 9.77 crore respectively will have to be returned.