Govt to share LRS, BPS revenues with gram panchayats

Vijayawada: In a major step to strengthen grassroots governance, the state govt has decided to share revenues generated under the Layout Regularisation Scheme (LRS) and Building Penalisation Scheme (BPS) with gram panchayats, giving them a substantial financial boost. Under the new formula, gram panchayats will receive 50% of the revenues collected in their respective jurisdictions.Urban Development Authorities (UDAs) will get 30%, while the remaining 20% will go to the state town and country planning wing. The move is expected to provide much-needed funds to village panchayats, many of which are struggling financially.
Principal secretary (municipal administration and urban development) S Suresh Kumar said the decision reflects the govt's commitment to empowering local bodies and ensuring that funds generated from regularisation are reinvested in the same areas. By allocating half of the proceeds to gram panchayats, the govt aims to strengthen rural infrastructure and improve basic amenities.The decision is significant as gram panchayats often face severe fund constraints in executing essential works such as internal roads, drainage, street lighting, drinking water, and sanitation projects. Many village panchayats are unable to take up even routine sanitation work and depend heavily on finance commission grants, which are earmarked for specific purposes. With a steady inflow of LRS and BPS revenues, village bodies are expected to take up long-pending development works and improve civic services.Sources said the structured revenue distribution will also ensure transparency and accountability. UDAs will utilise their 30% share for planned urban expansion, while the town and country planning wing will use its 20@ for urban planning. "The decision was taken after several rounds of discussions with stakeholders, particularly legislators pressing for a share for village panchayats," a senior official said.Officials believe the move will encourage more property owners to come forward for regularisation, knowing that funds collected will directly benefit local development. By linking revenue generation with grassroots infrastructure growth, the government hopes to create a sustainable model for balanced rural and urban development.