16th Finance Commission recommends one-time grant to urban local bodies for merging peri-urban villages

The 16th Finance Commission has recommended a one-time grant to urban local bodies with population above one lakh as an urbanisation premium component for merging peri-urban villages to it. The commission also stipulates entry-level conditions for clearance of grant to local bodies, including publishing of audited figures from the previous financial years.

For an urban local body to qualify for the performance grant, the revenue growth in the previous financial year should be at least 5% more compared to the year prior to that. In case only some urban local bodies from a State are satisfying these conditions, the grant that the State will get will be proportional to that. For the State to qualify for the State performance component of the grant, it should have disbursed to local bodies at least 20% of the grant recommended by the 16th Finance Commission in the previous year.