MP drafts 88 recommendations to strengthen urban bodies, Panchayats:State may raise local bodies’ share in revenue from 6% to 10%

Madhya Pradesh is preparing to significantly increase financial support for urban local bodies and village councils after the State Sixth Finance Commission drafted 88 recommendations aimed at improving civic infrastructure and local governance. At present, the state allocates only 6% of its revenue income — around ₹6,000 crore annually — to municipal bodies and village councils. The draft proposal recommends increasing this share to 10%, which would raise annual allocations to nearly ₹11,000 crore. The commission is expected to submit its final recommendations to the state government by October 31 for implementation over the next five years. MP ranks 10th in supporting local bodies According to the commission’s findings, Madhya Pradesh ranks 10th in the country in terms of financial assistance to local bodies. States such as Maharashtra and Karnataka allocate 40% to 45% of their revenue income to local governance institutions. Madhya Pradesh currently has 413 urban local bodies and nearly 23,000 village councils. Under the proposed distribution formula, village councils would receive 7.75% of the funds, while urban bodies would get 2.25%. Over the next five years, the state government is expected to provide nearly ₹50,000 crore as part of this enhanced allocation framework. Additional ₹56,100 crore expected from 15th Finance Commission Apart from state allocations, Madhya Pradesh is also expected to receive ₹56,100 crore for local bodies under the recommendations of the Central 15th Finance Commission. Combined together, local bodies in the state could receive nearly ₹20,000 crore annually for improving civic management, including drinking water supply, sanitation, and other essential urban services. Municipal Corporations presenting budgets beyond revenue capacity Bhopal Municipal Corporation The Bhopal Municipal Corporation has presented a budget of ₹3,938.45 crore for the 2026-27 financial year, including a provision of ₹50 lakh expenditure for every ward. However, according to the Local Fund Audit report, the corporation’s actual revenue receipts are only around ₹2,000 crore. Indore Municipal Corporation The Indore Municipal Corporation has proposed a budget of ₹8,455 crore for 2026-27, focusing on urban development, master plan roads, water supply, and infrastructure expansion. Despite this, the corporation’s total tax revenue stands at only about ₹4,400 crore. Key recommendations of the Sixth Finance Commission Direct development funds for village council leaders The commission has recommended that village heads receive ₹8 lakh annually in two installments for development works. District Panchayat presidents may receive up to ₹70 lakh, while block-level council presidents could be allotted ₹30 lakh. Uniform water supply targets The report recommends ensuring a minimum supply of 135 litres of water per person daily across all cities. Currently, water availability varies significantly: In smaller towns, supply is as low as 50 litres per person. Fire safety infrastructure needs immediate attention The commission observed major shortages in fire-fighting infrastructure in cities such as Jabalpur, Gwalior, Rewa, Burhanpur, Ratlam, Satna and Sagar. It recommended one fire brigade for every population of 50,000 people. Seed money for newly formed local bodies The draft also proposes a “seed money” mechanism for newly created urban bodies. Municipal corporations should receive ₹100 per capita, while municipalities should receive ₹50 per capita for initial administrative and infrastructure development. Rising salary burden a concern The commission warned that establishment expenses in several local bodies have already reached 65% of total expenditure. It noted that implementation of the Eighth Pay Commission could further worsen the financial condition of local institutions. Commission chairman speaks Jaibhan Singh Pawaiya said the commission has begun work according to the responsibilities assigned to it, though substantial work remains pending. He added that the commission would submit its report to the state government, while the final decision on implementing the recommendations would rest with the government.