The conduct of urban local bodies and panchayat elections would facilitate flow of Rs 1000 crore Central funds annually for developmental activities in the state.

According to Finance Department officials, the funds could be higher with each panchayat and urban local body receiving additional performance grants apart from the basic grants when the corporators and Sarpanchs are elected.

Under the 14th Finance Commission (2015-2020), the Centre had allocated Rs 4161 crore but the money remained blocked due to the rider by the Union Finance Ministry that only the elected urban local bodies and rural local bodies (Panchayati Raj institutions) will get the grant to strengthen the grassroots democratic institutions.

The 14th Finance Commission had proposed Rs 3,117.36 crore for the rural local bodies (Panchayats) and Rs 1,044.51 crore for the urban local bodies.

The official said that the ULBs were entitled for Rs 350 Cr during 2016-2017. These funds were not provided to the state in absence of elected municipalities.

Similarly, the state lost Rs over 250 Cr during 2017-2018. The central finance commission devolves funds to local bodies across the country every year.
These funds are to be spent on water, electricity, road infrastructure, and other civic amenities.

The ULB polls were held in J&K after a span of 23-years in January 2005.
Similarly, the state has lost huge Centre funding due to non-holding of panchayat polls.

“J&K will lose over Rs 4000 Cr between 2015-2020, if panchayat polls do not take place,” said an official of the Rural Development Department.