Karnataka plans financial overhaul for local bodies with GST share and People's Plan

Karnataka Chief Minister D.K. Shivakumar announced on Wednesday that the state government will formulate comprehensive guidelines to bolster the financial framework of rural and urban local bodies across the state. Chairing a meeting of the Karnataka State Decentralisation Planning and Development Committee in Bengaluru, the Chief Minister stated that the administration intends to move a formal proposal before the Goods and Services Tax Council seeking a dedicated revenue share for grassroots governance bodies.

The initiative aims to enhance the fiscal autonomy of local administrative tiers and deepen decentralised governance. Addressing officials at his home office, Shivakumar emphasized that strengthening the financial position of gram, taluk, and zilla panchayats remains an administrative priority for the state.

As part of the proposed reforms, the state government will constitute a specialized committee headed by the Rural Development Minister. This panel will examine the recommendations put forward by the Fifth State Finance Commission concerning financial devolution and administrative restructuring, identifying actionable measures for immediate implementation.

Official figures indicate that financial allocations totaling ₹1,261 crore have already been disbursed to gram panchayats, alongside ₹557 crore to taluk panchayats and ₹183 crore to zilla panchayats in line with the commission's framework. To further streamline operations, the government will explore the creation of a dedicated Karnataka Panchayat Administrative Service.

Attention is also directed toward strengthening urban local bodies in alignment with the 74th Constitutional Amendment. Consultations are scheduled with legal experts to introduce necessary amendments to relevant legislative acts, ensuring urban governance structures function with greater efficiency and accountability.

Under the proposed 'People's Plan' framework announced in the state budget, urban local bodies will adopt structured ward meetings comparable to rural gram sabhas to formulate local development schemes. The Rural Development and Urban Development departments have been instructed to issue operational guidelines and develop supporting software platforms to capture grassroots public demands directly into the state budgetary process.

Additionally, district planning committees across districts and taluks have been directed to convene quarterly meetings and submit regular compliance reports. Project management units will also be established at district and taluk levels to oversee execution and ensure effective fund utilization.