Roadmap for Answer Writing Introduction (100-150 words): Contextualize the importance of PRIs: Briefly introduce Panchayati Raj Institutions as a critical part of India’s decentralized governance system, aimed at promoting local self-governance and inclusive development. Mention the relevance of financial autonomy: ...
Model Answer Introduction The 73rd Constitutional Amendment of 1992 aimed to empower Panchayats and promote decentralization by ensuring greater autonomy for local governance. However, despite the competitive political environment fostered by the amendment, Panchayats have not yet evolved into effecRead more
Model Answer
Introduction
The 73rd Constitutional Amendment of 1992 aimed to empower Panchayats and promote decentralization by ensuring greater autonomy for local governance. However, despite the competitive political environment fostered by the amendment, Panchayats have not yet evolved into effective bodies for planning and service delivery in rural India.
Challenges in Panchayat Effectiveness
- Inadequate Capacity Building:
- Fact: Many Panchayat members lack the necessary skills in financial management, planning, and project monitoring. This often leads to inefficient resource utilization and poor project outcomes.
- Example: Many Panchayats struggle to design and implement plans due to the absence of trained staff or lack of proper capacity-building initiatives.
- Financial Constraints:
- Fact: Panchayats rely heavily on central government grants, which are often delayed or insufficient. Only 5% of their revenue is generated locally.
- Example: Panchayats receive 95% of their funds from devolved grants, but delays in disbursement impact their ability to implement development projects effectively.
- Lack of Transparency and Accountability:
- Fact: Weak monitoring systems and limited access to information make it difficult to hold Panchayats accountable.
- Example: Transparency issues in the allocation and utilization of funds prevent the public from knowing how resources are being used, hindering effective governance.
- Socio-economic Inequalities:
- Fact: Existing social inequalities within Panchayat jurisdictions undermine inclusive development.
- Example: Marginalized groups, especially in rural areas, often face discrimination, affecting their access to Panchayat resources and services.
- Limited Community Participation:
- Fact: Many citizens are unaware of their rights and responsibilities within the Panchayati Raj system, leading to low participation.
- Example: Low attendance in Gram Sabhas means that Panchayats are not truly representative of the community’s needs.
Suggested Measures for Improvement
- Fiscal Autonomy:
- Fact: Empowering Panchayats to generate and manage their own finances would reduce dependency on central grants.
- Example: Kerala’s decentralized planning model has shown that financial autonomy leads to more effective Panchayat governance.
- Regular Elections:
- Ensuring timely elections will keep Panchayats democratic and accountable, fostering better governance.
- Enhanced Citizen Participation:
- Fact: Increasing awareness and participation in Gram Sabhas and local governance would enhance accountability.
- Example: Strengthening citizen engagement can ensure more inclusive decision-making.
- Social Audits:
- Fact: Regular social audits ensure transparency and identify issues in resource allocation.
- Example: In Rajasthan, social audits have been used effectively to identify and correct irregularities.
- Inter-panchayat Coordination:
- Encouraging cooperation between Panchayats through workshops and knowledge-sharing initiatives will enhance resource management.
Conclusion
The Venugopal Committee (2018) emphasized the need for reforms to strengthen Panchayats. By addressing challenges like financial constraints, lack of transparency, and limited community participation, Panchayats can fulfill their potential in driving rural development and ensuring effective service delivery.
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Model Answer 1. Over-reliance on Grants A major issue faced by PRIs is their heavy dependence on grants from the central and state governments. As per an RBI report, approximately 95% of their revenue is derived from these grants. This makes PRIs financially vulnerable and limits their autonomy in dRead more
Model Answer
1. Over-reliance on Grants
A major issue faced by PRIs is their heavy dependence on grants from the central and state governments. As per an RBI report, approximately 95% of their revenue is derived from these grants. This makes PRIs financially vulnerable and limits their autonomy in decision-making and local development.
2. Weak State Finance Commissions (SFCs)
Article 243-I of the Indian Constitution mandates the creation of State Finance Commissions (SFCs) to recommend the devolution of funds to local governments. However, only 9 states have constituted their 6th SFC, and of these, only two are operational. The lack of effective and functional SFCs exacerbates the financial difficulties faced by PRIs by delaying and limiting the funds allocated to them.
3. Insufficient Tax Revenue
PRIs generate very little revenue through local taxes and fees. In 2021-22, their own revenue from taxes and fees accounted for just 1.1% of total revenue. This is due to a narrow tax base, low compliance rates, and weak enforcement mechanisms. Additionally, lack of awareness and clarity regarding tax rules contributes to the underperformance in tax collection.
4. Misuse of Funds
Instances of corruption and fund mismanagement are also prevalent. The absence of strong oversight mechanisms allows for the misuse of funds, as demonstrated by the diversion of Rs 1.58 crore from the Gannavaram Gram Panchayat (Andhra Pradesh) without proper approval. This undermines the financial stability and credibility of PRIs.
Steps to Enhance Revenue Generation for PRIs
To address these challenges, several measures can be implemented:
1. Strengthening Tax Collection
PRIs should adopt innovative approaches like partnering with Self-Help Groups (SHGs) for tax and fee collection. For example, Surquja Gram Panchayat in Chhattisgarh witnessed an increase in revenue by collaborating with SHGs.
2. Improving Transparency and Resource Efficiency
Enhanced budgeting, fiscal discipline, and transparent resource management can help reduce misuse of funds. Regular audits and monitoring mechanisms should be put in place to ensure proper utilization.
3. Revenue Diversification
PRIs can adopt best practices from other successful models. Bademarenga Gram Panchayat in Chhattisgarh, for example, implemented various initiatives to increase both tax and non-tax revenue, such as leveraging local resources for income generation.
4. Land Monetization
PRIs should identify unused land for development purposes, such as commercial projects, community centers, or markets. This can generate significant revenue and contribute to local infrastructure.
5. Strengthening SFCs
Regular constitution and empowerment of SFCs are crucial for ensuring fair and timely devolution of funds from the state to the local level.
By embracing these strategies, PRIs can enhance their financial independence and play a more effective role in rural development.
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