Abstract:
The issue of own resource mobilization of rural decentralized planning units, i.e. panchayats has assumed importance in recent years, particularly after two landmark developments, namely the structural adjustment programme that began in a comprehensive way since 1991 and the 73rd amendment to the Constitution of India. Following the liberalization, privatization and globalization policy of the Government of India the state has been gradually withdrawing from economic, social and infrastructural development programmes. Hence, great emphasis is made on mobilization of own resources of panchayats that are now formalized as third tier of government, local self-government with the constitutional responsibility of planning for economic development and social justice, in the rural areas. Panchayats' own resources largely determine their fiscal autonomy (Subramanium 2003 1SSR). On the revenue side a measure of autonomy captures the extent to which local bodies can raise their revenue independently, that is on their own account with the freedom to spend according to their own priority. Own income of local bodies is one component of fiscal decentralization and consists of revenue raised by way of tax as well as non-tax receipts. On the expenditure side, a measure of autonomy reflects the extent of the right and the capacity of PRIs to allocate their resources. Own receipts of panchayats come from tax and non-tax sources including voluntary contributions. Panchayats tax receipts as well as voluntary contributions depend on rural people's capacity to pay which, in its turn, depends on people's saving and investment. For accelerating economic growth and development and for promotion of saving and investment, decentralized planning and people's contributions are recognized as engines of growth and for attainment of social objectives like poverty alleviation, increase of employment rate, reduction of economic inequalities etc. in a developing country like India.
