The Tamil Nadu government’s proposal to merge 111 peri-urban panchayats with neighboring municipal corporations has raised questions over the need for such a move, when the government is implementing a financial assistance scheme for these peri-urban panchayats.
The government allocates Rs 69 crore annually for 690 peri-urban panchayats at the rate of 10 lakh per panchayat, according to a government order issued in August 2023. As an additional measure, this is being done under the operating deficit grant and maintenance. Fund to achieve “balanced and sustainable development” of panchayats. According to the Sixth State Finance Commission, peri-urban panchayats are those village panchayats that are within a five-kilometre radius of urban local bodies.
Need for financial assistance
As assessed by the authorities, these peri-urban panchayats, while experiencing the characteristics of urbanization in the form of exponential increase in population growth and density, are under stress in terms of financial resources, institutional capacity and technical knowledge. They also face special problems in the management of liquid and solid waste.
The allocation of the Deficit Subsidy Fund has been designed to partially address this aspect. In addition to this, the state government, last year, sanctioned ₹390 crore to improve 2,550 roads, streets and lanes across 709 km.
These peri-urban panchayats are among the 149 village panchayats, which are expected to come under the jurisdiction of 16 municipal corporations. Some of the municipal corporations identified for absorption of the peri-urban panchayats are: Higher Chennai Company (which will get two such panchayats); Madurai (five); Coimbatore (six); Salem and Sivakasi (nine each); Cuddalore (12) and Avadi, Tiruchi and Thoothukudi (14 each).
Explaining the rationale behind the proposed merger, a senior government official says there is a perception that a sum of Rs 10 lakh is inadequate for peri-urban panchayats to cope with the huge burden caused by urbanization. If these areas come under the jurisdiction of neighboring municipal corporations, they will benefit from the development schemes and plans of larger urban local entities and bodies like Chennai Metrowater.
Published – January 2, 2025 03:52 pm IST
