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Panchayati Raj Institutions UPSC NOTE

 Inances of Panchayati Raj Institutions (PRIs) in India

  • Only 1% of the revenue of panchayats was earned by them.

  • The rest being raised as grants from the State and the Centre.

  • Specifically, 80% of the revenue was from Central government grants

  • Only 15% was from State government grants.

  • Consequently, the revenue raised by panchayats formed a minuscule share of the States’ own revenue.

  • Panchayats act on three levels — gram sabhas, panchayat samithis, and zila parishads

  • They are responsible for a variety of tasks including agriculture, rural housing, water management, rural electrification, healthcare, and sanitation. 

  • In some cases, zila parishads are also responsible for maintaining schools, hospitals, dispensaries, and minor irrigation projects.

  • However, due to dependence on the Centre and the State for their funds, most panchayats suffer from interference from the top two tiers of the system, according to news reports

  • In August last year, several panchayat heads protested in Chennai asking for independence of the Panchayati Raj

  • A news report from Telangana last year stated that the failure of the State government in releasing funds on time forced sarpanches to use private funds. 

  • The Standing Committee on Rural Development and Panchayati Raj said in March last year that 19 out of 34 State/Union Territories did not receive any funds under the Rashtriya Gram Swaraj Abhiyan scheme in FY23

  • The programme was started fobuilding capacity and training elected representatives.

Revenue sources of PRIs in India 

  • In 2022-23, each panchayat earned just ₹21,000 as its own tax revenue and ₹73,000 as non-tax revenue. 

  • In contrast, each panchayat earned about ₹17 lakh as grants from the Central government and more than ₹3.25 lakh as grants from the State governments. 

  • In essence, just 1% of panchayats’ revenue comes from their own revenue.

  • When we look at the average revenue earned per panchayat in 2022-23.

  • There are wide variations among States.

  • In Kerala, the average revenue raised by each panchayat was over ₹60 lakh in 2022-23

  • West Bengal came a close second with an average revenue of ₹57 lakh per panchayat

  • The revenue was over ₹30 lakh per panchayat in Assam, Bihar, Karnataka, Odisha, Sikkim, and Tamil Nadu.

  •  Less than ₹6 lakh in Andhra Pradesh, Haryana, Mizoram, Punjab, and Uttarakhand.

  • Due to meagre revenue raising potential, panchayats’ share in the respective State’s own revenue was poor

  • For instance, in Andhra Pradesh, revenue receipts of panchayats formed just 0.1% of the State’s

own revenue. 

  • The revenue of panchayats in Uttar Pradesh formed 2.5% of the State’s own revenue, the highest among States. 




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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Panchayati Raj Institutions UPSC NOTE
Panchayati Raj Institutions UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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