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Finances of Local Self-Gover

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  • Paramita Dasgupta

Abstract

One of the greatest weaknesses of erstwhile Panchayati Raj Institutions (PRIs) was that they were starved of funds. They had very little resources of their own and were usually dependent on the government for their funds. If the local bodies fulfill the functions expected of them, there is a need for mobilization of substantial resources. However, they operate under certain constraints. They tend to be weak because their financial resources are limited. Mobilization of resources has not been a strong point of the local governments, at least in the rural areas. Thus, internal resource generation of Panchayats at all levels is very poor. The receipts from all sources do not cover more than a fifth of their total receipts. As a result, they are considered as totally dependent on the state. This paper attempts to examine the existing status of Panchayati Raj (PR) finances in West Bengal with reference to their composition and trends (both receipts and expenditure) and to assess the revenue mobilization effort of the PRIs in both tax and non-tax spheres. It then tries to suggest measures to improve the financial administration of the PRIs. Further, it focuses on some newer sources of revenue, which could possibly be utilized by the PRIs with political will. The third-tier of the PRIs, viz., the Gram Panchayats (GPs) have been mostly dealt with in the analysis.

Suggested Citation

  • Paramita Dasgupta, 2010. "Finances of Local Self-Gover," The IUP Journal of Public Finance, IUP Publications, vol. 0(1 & 2), pages 21-47, February .
    • Handle: RePEc:icf:icfjpf:v:08:y:2010:i:1&2:p:21-47
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