J&K misses out on Finance Commission grants since 2019

Srinagar, Dec 17: Jammu and Kashmir (J&K) has not received any direct funding under the 14th or 15th Finance Commissions, since its reorganization into a Union Territory (UT) in 2019,. Prior to this, J&K, as a state, was eligible for Finance Commission grants.
According to data, J&K was allocated ₹1,049.49 crore under the 14th Finance Commission before its reorganization. However, with the transition to UT status, J&K no longer qualifies for these grants, as Finance Commission allocations are constitutionally reserved for states. Since then, the Central Government has provided funding through the Union Budget and centrally sponsored schemes, limiting the availability of predictable funding for local bodies.
Over the past three years, J&K has utilized ₹145.13 crore under schemes like the Rashtriya Gram Swaraj Abhiyan (RGSA) and Incentivization of Panchayats (IoP).
In the current financial year, J&K has received ₹98.61 crore under RGSA for 2023-24, with ₹50 crore allocated for the year as of December 2024. Additionally, ₹2 crore has been allocated annually to high-performing panchayats under IoP over the past two years. The total funds utilized under these schemes amount to ₹145.13 crore in the last three years.
The Finance Commission, constitutionally mandated to recommend tax distributions between the Centre and the states, excludes Union Territories, including J&K, from its allocations. This exclusion means that the finances of Union Territories are directly managed by the Central Government, significantly limiting the financial autonomy of J&K’s Panchayati Raj Institutions (PRIs) and leaving them reliant on centrally controlled funding.
To monitor fund utilization, the Ministry of Panchayati Raj conducts field visits, video conferences, and uses online tools such as the Training Management Portal (TMP). Additionally, the Audit Online platform ensures transparent accounting, helping J&K maintain strong performance metrics. Award schemes under IoP further incentivize panchayats to enhance public service delivery.