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Decentralized Governance and Devolution of Funds to the Panchayats in India: A Critical Analysis of Two States

Author

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  • M. Gopinath Reddy
  • Bishnu Prasad Mohapatra

Abstract

The debates on the devolution of powers to the panchayats since the last two decades received enormous attention because of the increasing role played by these institutions in planning and implementation of the development programmes in rural India. But it is observed that devolution agenda including the agenda of fiscal devolution and tax decentralization has not been taken up sincerely in many states including the states of Andhra Pradesh and Odisha. Based on the review of secondary data, the present article critically examines the status of the fiscal devolution to the panchayats in the states of Andhra Pradesh and Odisha. This article argues that both the states need to strengthen the own revenue of panchayats based on the recommendations of the Finance Commissions of the respective states. In this context, the process of tax decentralization and principles of sharing the state taxes should receive paramount importance.

Suggested Citation

  • M. Gopinath Reddy & Bishnu Prasad Mohapatra, 2017. "Decentralized Governance and Devolution of Funds to the Panchayats in India: A Critical Analysis of Two States," Studies in Indian Politics, , vol. 5(1), pages 42-54, June.
    • Handle: RePEc:sae:indpol:v:5:y:2017:i:1:p:42-54
    DOI: 10.1177/2321023017698259
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    References listed on IDEAS

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    1. Pranab Bardhan, 2019. "Decentralised development," Indian Economic Review, Springer, vol. 54(1), pages 235-253, December.
    2. Dilip Mookherjee & Pranab K. Bardhan, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May.
    3. Asfaw, Abay & Frohberg, Klaus & James, K.S. & Jutting, Johannes Paul, 2004. "Modeling The Impact Of Fiscal Decentralization On Health Outcomes: Empirical Evidence From India," Discussion Papers 18731, University of Bonn, Center for Development Research (ZEF).
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