{"id":281143,"date":"2024-02-05T17:47:21","date_gmt":"2024-02-05T12:17:21","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=281143"},"modified":"2024-02-05T17:47:21","modified_gmt":"2024-02-05T12:17:21","slug":"rbi-report-on-panchayati-raj-institutions-pris","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/rbi-report-on-panchayati-raj-institutions-pris\/","title":{"rendered":"RBI report on Panchayati Raj Institutions (PRIs)"},"content":{"rendered":"

Source<\/strong>-This post on RBI report<\/strong> on Panchayati Raj Institutions (PRIs) <\/strong>is based on the article “Panchayats earn only 1% of their revenue through taxes<\/strong>” published in “The Hindu<\/strong>” on 24th January 2024.<\/p>\n

Why in the News?<\/h2>\n

According to a report by the Reserve Bank of India (RBI) on the finances of Panchayati Raj Institutions for 2022-23<\/span>, local taxes and fees contributed only 1.1 percent to Panchayats\u2019 total revenue.<\/span><\/p>\n

What are the key findings of the report?<\/h2>\n
\"RBI
Source- The Hindu<\/figcaption><\/figure>\n

1) Decline in<\/strong> Panchayat average revenue <\/strong>– According to the report, the average revenue per Panchayat (<\/span><\/span>including<\/span> taxes, non-taxes, and grants) stood at 21.2 lakh in 2020-21, increased to 23.2 lakh in 2021-22, and then slightly declined to 21.23 lakh in 2022-23<\/span>.<\/p>\n

2) Panchayat own revenue sources:
\na.<\/strong> During the study period, the Panchayats’ own revenues (Local taxes and fees<\/span>) accounted for merely 1.1 percent of their total revenue<\/span>.
\nb.<\/strong><\/span> Non-tax revenue<\/span>, primarily from Panchayati Raj programmes and interest earnings, constituted 3.3 per cent<\/span> of the<\/span> total revenue receipts<\/span>.<\/p>\n

3) Grant reliance:
\na.<\/strong> Panchayats rely heavily on property taxes, fees, fines, and grants, with approximately 95% of their revenue coming from grants<\/span> provided by higher levels of government.
\nb.<\/strong> Specifically, 80% of the revenue was from Central government grants<\/span>; only 15% was from State government grants.<\/span><\/p>\n

4) Low Expenditure:
\n<\/strong>a. <\/b>The average Panchayat expenditure dropped from 17.3 lakh in 2020-21 to 12.5 lakh in 2022-23, mainly due to higher spending during the pandemic<\/span>.
\nb<\/strong>. Goa, Karnataka, Odisha, Sikkim, Kerala, and Tamil Nadu recorded the highest average Panchayat expenditures<\/span>.
\nc.<\/strong> The revenue expenditure of panchayats accounts for less than 0.6% of the gross state domestic product<\/span> across all states.<\/p>\n

What are the source of Finance for PRIs?<\/h2>\n

1) Grants from the Central Finance Commission<\/span> (tax devolution) and other grants provided by the Central Government.<\/p>\n

2) Revenue collected by the State government on behalf of local bodies (State Finance Commissions Transfer), including tolls, taxes, duties, and fees, as well as grants-in-aid<\/span>.<\/p>\n

3) As per Article 243-H<\/span>, PRIs are empowered to levy, collect, and distribute taxes, duties, tolls, and fees.<\/p>\n

UPSC Syllabus- Polity and Nation\/Report & Indices<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Source-This post on RBI report on Panchayati Raj Institutions (PRIs) is based on the article “Panchayats earn only 1% of their revenue through taxes” published in “The Hindu” on 24th January 2024. Why in the News? According to a report by the Reserve Bank of India (RBI) on the finances of Panchayati Raj Institutions for… Continue reading RBI report on Panchayati Raj Institutions (PRIs)<\/span><\/a><\/p>\n","protected":false},"author":10367,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,1760,1305],"tags":[11872],"class_list":["post-281143","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-polity-and-nation","category-index-reports-bodies","tag-9pm-daily-factly","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/281143","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\/10367"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=281143"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/281143\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=281143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=281143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=281143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}