Devolution of powers to the PRIs (Panchayati Raj Institutions) in Arunachal Pradesh was long overdue and it has become a reality with the State Government making the formal announcement last week. Timely flow of funds to the PRIs and judicious utilisation of the devolved funds by the PRIs will be critical to strengthening the grassroots governance in the border State. The 73rd and 74th amendments made to the Constitution of India in 1992 led to formally institutionalising the panchayat system in the power-sharing governance in 1993; and, it has happened in Arunachal Pradesh after 28 years. Arunachal Pradesh Chief Minister Pema Khandu has announced that 10% of the State's own revenues shall be devolved to the PRIs with effect from the next financial year which will be in addition to the Finance Commission (FC) grants. While 70% will be basic grants, 30 % will be performance-based as stipulated by the 15th Finance Commission. The Commission's report stated that local self-governments are required to raise matching contributions for utilisation of FC grants, but no grant amount is to be used for expenditure on salaries and wages. The FC also stipulated that basic grant was intended to be used to improve the status of specifiedbasic civic services. The performance grant was based on revenue improvement, with the criteria (including the quantum of incentive to be given) left to be determined by State Governments. In order to be eligible for performance grants, the local governments would have to show an increase in own source of revenue and also submit audited annual accounts. Arunachal Pradesh through 'The Arunachal Pradesh Panchayat Raj (Amendment) Act-2018' passed in the State Assembly changed the three-tier panchayats into two-tier ones by abolishing the Anchal Samities in between the Gram Panchyat and Zila Parishad in 2018. The Part IX of the Constitution allows states with less than 20 lakh population to have two-tier Panchayat system without the intermediate level. The 15th Finance Commission recommended that inStates, which have a two-tier system with only village and district panchayats, the allocation willbe in the bands of not less than 70 per cent and not more than 85 per cent for village panchayatsand not less than 15 per cent and not more than 30 per cent for district panchayats. This indicates that funds can be devolved to the PRIs in Arunachal Pradesh. The ruling Bharatiya Janata Party had a clean sweep of the panchayat polls held in 2020, two years after the two-tier system was notified which apart from political reasons was also a reflection of the new aspirations around the PRI post amendment in the structural system. The State government has urged the PRIs to plan projects and measures based on Sustainable Development Goals. The North East Region District SDG Index released by the NITI Aayog show that 12 districts (48%) of the State have been ranked as "Performer" and 13 districts as "Front Runner".
The Report highlights that Arunachal Pradesh is one of the few States in India that have aligned the State budgetary allocations with SDGs. In respect of SDG 3 of 'Good Health and Wellbeing', two districts of the frontier States – Panchayati Raj Institutions (Upper Siang and East Siang have figured among top five districts in the region. Three districts of the state have also figured among the top five in respect of SDG 8 of 'Decent Work and Economic Growth', Lower Dibang Valley in respect of SDG 6 of 'Clean water and Sanitation'. These rankings have set the benchmark for all districts to improve performance in respect of all other SDG in all districts which the PRI have also to refer to ensure achieving all SDG goals by 2030. Training of representatives is a crucial factor for improvement of the functioning of the PRIs. The planning process of the PRIs need to be comprehensive and ensure full convergence with schemes, projects of the Centre and the State to avoid overlapping. Transparency is the key to building trust among the people about the capacity and trustworthiness of the PRI in implementation of development schemes and projects and judicious use of taxpayer's money. The Finance Commission attached the rider for rural local bodies to avail FC grants that in the first and second year of the award period (2021-22 and 2022-23), States need to ensure thatat least 25 per cent of the rural local bodies have both their provisional accounts for the previousyear and audited accounts for the year before the previous, available online in the public domain inorder for them to avail of the full grants in that year. From the third year the State will be able avail FC grant only against those rural bodies that have complied with this rider. Arunachal Pradesh empowering the PRIs to maintain audited accounts will ensure transparency and smooth flow of fund for strengthening grassroots democracy.