CHENNAI: The Fourth Finance Commission of the Tamil Nadu government headed by senior IAS officer K Phanindra Reddy on Thursday submitted its report to Chief Minister J Jayalalithaa.The Commission, constituted on December 1, 2009, studied the financial position of all local bodies, including village panchayats, panchayat unions, district panchayats, town panchayats, municipalities and municipal corporations. Among the important recommendations of the Commission, the one about the increase in the devolution of State’s Own Tax Revenue to the local bodies assumes significance.The recommendations cover the distribution of net proceeds of the taxes, duties and tolls between the State and local bodies, among others. The Commission was directed to submit its report and recommendations to the government by May 31, 2011. P Ekambaram, member-secretary, S Ramalingam, former MLA, ex-officio member, Dr S Vijayakumar and M Chandrasekar, members of the Commission, were also present on the occasion.The panel has also been asked to recommend measures to improve the financial position of the local bodies and suggest possible new avenues for tapping resources in rural and urban local bodies keeping in mind the local body tax structure in other States.The first Finance Commission was constituted in April 1994 and it submitted its recommendations to the government on November 29, 1996. The Second Commission, formed on December 1, 1999, submitted its report on May 21, 2001. The report of the Third Commission, formed on December 1, 2004, was given on September 30, 2006. The Action Taken Report of the Third Finance Commission was placed in the Assembly on May 10, 2007.The First FC recommended eight per cent devolution of funds from the State’s Own Tax Revenue to the local bodies from 1997-1998 with an incremental growth of one per cent per year. The Second Commission, which also recommended eight per cent devolution, suggested a hike of one per cent to be made biannually.The Third Finance Commission had recommended 10 per cent of State’s Own Tax Revenue for each year from 2007-2008 to 2011-2012. The State government had decided to devolve nine per cent each for 2007-2008 and 2008-2009; 9.5 per cent for 2009-2010 and 10 per cent each for 2010-2011 and 2011-2012.
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