Other Resources
Performance Based Grants for State Finance Commission
July 2013
Governments of Gujarat and Maharashtra have set up the respective State Finance Commissions (SFCs) in 2013. These reports were prepared for consultations with the SFCs of Gujarat and Maharashtra as input to the SFC process. The reports advocate introduction of a performance-based grants system (PBGS) for urban local bodies (ULB). They discuss the need for PBGS, essentially to strengthen municipal capacity and incentivise improvement in service delivery at local level. They also discuss various aspects of design of such a system such as predictable disbursement based on an agreed formula, monitoring and implementation mechanism, minimum conditions to be met and the performance levels to be achieved.
