UPSC Mains 2018 · GS II · Q15 · 15 marks · 250 words

Assess the importance of the Panchayat system in India as a part of local government. Apart from government grants, what sources the Panchayats can look out for financing developmental projects?

हिन्दी में

भारत में स्थानीय शासन के एक भाग के रूप में पंचायत प्रणाली के महत्त्व का आकलन कीजिए। विकास परियोजनाओं के वित्तीयन के लिए पंचायतें सरकारी अनुदानों के अलावा और किन स्रोतों को खोज सकती हैं?

How a topper answered the closest question

Toppers wrote this one in a test series: “Effective devolution of finances is an important requirement for Panchayati Raj Institutions (PRIs) to fulfill their objectives. Discuss while also elaborating on the reasons behind lack of financial resources for PRIs in India.”

Gamini SinglaAIR 3 · CSE 2021 · 222 wordsTheir whole copy

Opening · a constitutional or legal provision

73rd and 74th constitutional Amendment Acts, 1992 gave an impetus to decentralisation, in coherence with Article 40 of constitution PRIs were granted a constitutional status.

But lack of effective devolution of finances is a major hindrance in their working.

Body · points

Effective devolution → Important Requirement

  • Need to upgrade infrastructure eg Panchayat buildings, digital devices

  • Meet the day-to-day working requirements eg funds for carrying out social Audits

  • Funds are needed to facilitate transportation and ground level visits

  • To conduct Gram sabha meetings

  • To carry out community development projects eg const of ponds, public spaces

  • Disaster management activities eg shelter belts to prevent floods

Thus, PRIs need funds to fulfill their basic responsibilities

Reasons behind lack of financial resources

  • Lack of effective devolution from States

  • Many states have yet not constituted the State finance commission that reccomends the sharing of net proceeds of taxes

  • Tied nature of funds eg: only scheme related ie no freedom to use it for other purposes

  • Lack of devolution of functions and taxation powers to PRIs - as mandated under Article 243.

  • Hesitation of PRIs to mobilise resources by taxing their own people

  • Lack of awareness about their taxation powers

Diagram
5. Political will power / 4. Training of <-- Way forward --> 1. financial audits of PRIs [as 15th Finance commission recommended] PRIs officials on possible \ sources 2. Effective devolution by Centre and States \ 3. Awareness campaigns

Close · a vision

Proper access to funding is essential to facilitate the Gandhian dream of democratic decentralisation and bottom up approach.

How toppers approach this question, and more on its topic: open the question.

Toppers’ answers to other close questions

Source: UPSC, Civil Services (Main) Examination 2018, General Studies Paper II, Q15. The paper on upsc.gov.in. Themes and links to toppers’ answers are by UPSC Grade, not by UPSC.