Decentralisation of Finance: A Study of Panchayat Finances in India
The Constitution (73rd Amendment) Act, 1992, which was passed by Parliament in April 1993, gives Panchayats a constitutional status. The Constitution states that the PRIs have become the institution of “local self-governance” but the provisions related to the financial powers vary from one state to the other, as most of the financial powers and functions to be endowed to the Panchayats were left to the discretions of the concerned state legislatures. This study looks at the Panchayat finances in the two states of the country – Kerala, in which efforts of decentralisation have been widely appreciated and people’s participation in development planning has been given a campaign mode; and Rajasthan, which was first to introduce the modern system of Panchayats in the country.
