Archive · 22 Dec 2025

Panchayati Raj Institutions Struggle for Fiscal Autonomy

Panchayati Raj Institutions Struggle for Fiscal Autonomy

In 1993, India's government promised to give villages more power to govern themselves through Panchayati Raj Institutions (PRIs).

However, 30 years later, these village councils still don't have enough money to be truly independent.

Most of their funds come from the state and central governments, not from their own taxes.

Some southern states like Karnataka, Kerala, and Tamil Nadu have done better at giving their Panchayats more control over money and taxes.

But in many other states, village councils struggle to collect taxes like property tax because of confusing rules and lack of support.

To fix this, the government needs to give Panchayats more power to collect their own taxes, train them to manage money better, and reward them for doing a good job.

Without this, the promise of village self-rule remains unfinished.

Sources