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Fiscal Empowerment of Panchayats in India: Real or Rhetoric?


  • M Devendra Babu

    (Institute for Social and Economic change)


The focus of this paper is to review the financial position of panchayats in India. The analysis is based on the secondary sources of information. It reveals that the panchayats have very little fiscal autonomy. The locally raised revenues are very negligible. The funds flow from higher level governments are very low and lack any devolution design or principles. The transfers are made at the convenience and mercy of such governments.

Suggested Citation

  • M Devendra Babu, 2009. "Fiscal Empowerment of Panchayats in India: Real or Rhetoric?," Working Papers 229, Institute for Social and Economic Change, Bangalore.
  • Handle: RePEc:sch:wpaper:229

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    References listed on IDEAS

    1. Roy Bahl & Jorge Martinez-Vazquez, 2013. "Sequencing Fiscal Decentralization," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 641-687, November.
    2. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    3. Bird, Richard M. & Smart, Michael, 2002. "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development, Elsevier, vol. 30(6), pages 899-912, June.
    4. M Govinda Rao, 2001. "Fiscal Decentralization in Indian Federalism," Working Papers 98, Institute for Social and Economic Change, Bangalore.
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