Jaipur: A Rajasthan govt order linking 20% of future Finance Commission grants for gram panchayats to their own revenue growth has triggered a political row, with former chief minister Ashok Gehlot alleging it could lead to a Rs 1,200 annual tax on rural households and cuts in development funds for villages that miss collection targets.The rural development and panchayati raj department order lays down eligibility conditions for rural local bodies to receive the performance component of grants under the 16th Finance Commission from 2026-27 to 2030-31. The grants have been split in an 80:20 ratio between basic and performance components.Under the order, gram panchayats will qualify for the Rural Local Body performance component if they increase their own-source revenue by at least 1.025 times over the previous year or achieve a compounded annual growth rate of 2.5% over 2025-26 revenue levels, whichever is lower. This is subject to a minimum revenue collection of Rs 1,200 per household per year.The order says gram panchayats have the authority to levy taxes and user charges, and their eligibility for the performance grant will depend on meeting the prescribed revenue benchmarks. The performance component accounts for 20% of the total Finance Commission grant allocation.Gehlot criticised the directive, accusing the govt of shifting its focus from welfare to revenue collection. “Has the work of the govt now shifted away from public welfare and become limited only to transactions and collection?” he said in a statement.Calling the reported move “extremely concerning,” Gehlot said rural development, healthcare, education and basic services were the responsibilities of a welfare-oriented govt, not commercial activities.“Preparations are being made to impose an annual tax of Rs 1,200 per family in villages, and that a 20% cut will be made in the Budget if the target is not met is extremely concerning,” he said.“Linking public welfare schemes to strict tax collection targets is a completely undemocratic and anti-poor step,” Gehlot said, demanding that the govt clarify whether it planned to impose an economic burden on rural families or risk obstructing rural development by withholding funds from villages.The order also directs district-level officials to regularly monitor compliance and ensure panchayats maintain updated records of their own-source revenue.
