The enactment of the 73rd and 74th constitutional amendments is the historic step in the evolution and development of the Panchayati Raj System and the Urban Lo al Bodies. The subsequent enactment of the Haryana Panchayati Raj Act, 1994, (Act II of 1994), the Haryana Municipal Amendment Act, 1994 and the Haryana Municipal Corporation Act, 1994 and the formulation of the Haryana Finance Commission Rules were a logical sequel to these constitutional amendments.
The scope of enquiry of the State Finance Commission is mu h wider as compared to the Central Finance Commission which, besides re commending sharing of State resources between the State and the Local Bodies, is also required to suggest measures to improve the financial position of these bodies to enable them to be come viable units of lo al governance. The Commission had to walk through a critical path of striking a proper balance between two conflicting situations of constraint of budgetary resources before the State Government and mounting requirements of lo al bodies for their efficient and effective functioning. This intricate ate task has been rendered all the more difficult in the absence of reliable and authentic data. The Commission, however, has gone ahead with its task by collecting basic information to the extent possible from the State Government Departments as well as the lo al bodies. Discussions were held with elected representatives of these bodies at the district level. Suggestions were also invited from the public and other stakeholders apart from ascertaining the position existing in various other States.