Decentralization and Challenges Related to Panchayati Raj Institutions in India | Asian Journal of..

The devolution of authority, finance, and power to many local authorities or groups is referred to as decentralisation. There are numerous ways for a government to delegate authority to a subnational level. As a result, decentralisation can take the form of economic, political, fiscal, or administrative decentralisation. The Panchayati Raj Institutions (PRIs) are an important part of Indian social life. The 73rd and 74th Indian Constitution Amendments Acts of 1992 foresaw the establishment of PRI structures and provided a new charter of life for all Indians. "Fiscal autonomy is a critical part of decentralisation, and local government autonomy cannot be sustained without effective fiscal empowerment," according to "The World Bank (2007)." The best approach to strengthen the integrity, accountability, efficiency, and autonomy of Panchayati Raj Institutions (PRIs) has been to generate own sources of funding (OSR). According to the 14th Finance Commission, Panchayats have relatively little self-generated revenue and rely heavily on transferring cash from the state and national governments. Decentralization can only be achieved if the revenue base of Panchayati Raj Institutions is strengthened (PRIs). The current article will focus on the decentralisation of fiscal components of Panchayati Raj Institutions and the Finance Commissions' recommendations. The goal of this study is to look at the obstacles and issues that local governments in India confront when it comes to fiscal devolution. The current report also makes policy recommendations for state and local governments, stating that their financial relationship requires a thorough examination, as evidenced by state-specific fiscal devolution experiences and the state finance commission's recommendations status. The study closes with a broad premise: local governments should be better at designing development initiatives and maximising returns while keeping the availability of local funds in mind.

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