Lack of adequate financial resources does not allow the local bodies discharge their responsibilities properly. In this context, examine the various problems faced in mobilization of resources by Panchayati Raj Institutions.

Published: December 29, 2016

The 73rd amendment to our constitution envisages a self-governing self- sufficient 3 tier government. 29 subjects are delegated to this 3rd tier governance. Gram Panchayats have been given various powers under the act. As per the provisions of the Constitution, the State Legislature has been given the discretion to authorize Panchayats to levy taxes and assign taxes, etc, to enable them to mobilise their own resources for discharging assigned duties and functions. The powers to collect various taxes (house tax, water tax), various fees and give licenses to various commercial and industrial activities and collect revenue.
Low revenue mobilization by rural local bodies, ie., the PRIs is a serious issue especially when the Constitution looks upon them as autonomous institutions. Low revenue mobilization cannot be explained by the low revenue base alone. There are other challenges which pose as hurdles for resource mobilisation. Some of them are-

  • Lack of role clarity between tiers
  • Lack of staff support
  • Unviable administrative area
  • Creation of parallel channels of flow of funds

From the challenges above, we can simply conclude that states have not built up fiscal autonomy and fiscal base of the PRIs.
Kautilya has rightly stated that “All undertakings depend upon finance. Hence, foremost attention shall be paid to the treasury.”
Keeping this in mind and accepting the fact that finance is the fuel for any undertaking, simply not mobilizing resources but also proper management of resources is needed.

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