{"id":280141,"date":"2024-01-29T19:00:25","date_gmt":"2024-01-29T13:30:25","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=280141"},"modified":"2024-01-29T19:00:25","modified_gmt":"2024-01-29T13:30:25","slug":"fiscal-position-of-pri-empowering-panchayats-local-bodies-need-more-predictable-revenue-flows","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/fiscal-position-of-pri-empowering-panchayats-local-bodies-need-more-predictable-revenue-flows\/","title":{"rendered":"Fiscal position of PRI-Empowering panchayats: Local bodies need more predictable revenue flows"},"content":{"rendered":"

Source<\/strong>: The post fiscal position of PRI has been created, based on the article \u201cEmpowering panchayats: Local bodies need more predictable revenue flows<\/strong>\u201d published in \u201cBusiness standard<\/strong>\u201d on 29th January 2024.<\/p>\n

UPSC Syllabus Topic:<\/strong> GS Paper2- Polity- devolution of powers and finances up to local levels and challenges therein.<\/p>\n

News<\/strong>: The article discusses a Reserve Bank of India study on the financial state of local government bodies in India. It highlights their limited financial power and dependence on higher government levels.<\/p>\n

What is the current state of local government bodies in India?<\/strong><\/h2>\n

Post-independence, the 73rd Amendment in 1992 institutionalized PRIs at three levels.<\/p>\n

As of December 2022, India has 255,623 gram panchayats, 6,707 mandal panchayats, and 665 zila parishads.<\/p>\n

The Fifteenth Finance Commission suggested \u20b92.4 trillion for the period under its review.<\/p>\n

What are the major findings by RBI study of the fiscal position of PRI?<\/strong><\/h2>\n

The RBI study highlights the limited financial capabilities <\/strong>of Panchayati Raj Institutions (PRIs) in India. PRIs are highly dependent on higher government levels<\/strong> for financial support.<\/p>\n

In the fiscal year 2022-23, the average revenue per panchayat was \u20b921.23 lakh<\/strong>.<\/p>\n

This revenue includes taxes, grants, and other sources.<\/p>\n

However, PRIs’ own revenue from local taxes and fees was only 1.1% of their total income.<\/strong><\/p>\n

Revenue expenditure of panchayats is less than 0.6% of the gross state domestic product for all states.<\/strong><\/p>\n

The study underscores the need for more fiscal decentralization to enhance the effectiveness of PRIs.<\/p>\n

How can the fiscal position of PRIs be improved?<\/strong><\/h2>\n
    \n
  1. Increase financial autonomy <\/strong>for Panchayati Raj Institutions (PRIs) by enhancing their revenue-generating capabilities.<\/li>\n
  2. Implement Article 243 (I) effectively<\/strong>, requiring states to establish Finance Commissions for fair revenue sharing with PRIs.<\/li>\n
  3. Enhance administrative skills at local levels for better financial handling and ensure steady, ample funding for effective planning and program execution.<\/li>\n
  4. Learn from global examples<\/strong> where local governments manage significant portions of tax revenue, such as over 20% in Finland and Switzerland.<\/li>\n
  5. Encourage decentralization, empowering local leaders<\/strong> to make decisions based on community-specific needs and circumstances.<\/li>\n<\/ol>\n

    Question for practice:<\/strong><\/p>\n

    Discuss the key findings of the RBI study on the fiscal position of Panchayati Raj Institutions (PRIs) in India.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Source: The post fiscal position of PRI has been created, based on the article \u201cEmpowering panchayats: Local bodies need more predictable revenue flows\u201d published in \u201cBusiness standard\u201d on 29th January 2024. UPSC Syllabus Topic: GS Paper2- Polity- devolution of powers and finances up to local levels and challenges therein. News: The article discusses a Reserve… Continue reading Fiscal position of PRI-Empowering panchayats: Local bodies need more predictable revenue flows<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,1234],"tags":[10503,212,225],"class_list":["post-280141","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-polity-current-affairs","tag-business-standard","tag-gs-paper-2","tag-polity","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/280141","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=280141"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/280141\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=280141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=280141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=280141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}