The Ministry of Panchayati Raj has released the report “Status of Devolution to Panchayats in States – An Indicative Evidence-Based Ranking” to assess the progress in empowering Panchayati Raj Institutions (PRIs) across India.
Key Findings of the Report
About the Report:
- Also known as Panchayat Devolution Index 2024, it evaluates the autonomy and empowerment of PRIs.
- Assesses Panchayats based on devolution of powers and resources, reflecting Article 243G of the Constitution.
Six Critical Dimensions Assessed:
- Framework
- Functions
- Finances
- Functionaries
- Capacity Building
- Accountability
Overall Devolution Trends:
- Increased from 9% (2013-14) to 43.9% (2021-22).
- PRIs strengthened through infrastructure, staffing, and digitalization.
State Rankings:
Top 5 States:
- Karnataka (1st)
- Kerala (2nd)
- Tamil Nadu (3rd)
- Maharashtra (4th)
- Uttar Pradesh (5th)
Lowest-Ranked States/UTs:
- Dadra & Nagar Haveli and Daman & Diu (13.62)
- Puducherry (16.16)
- Ladakh (16.18)
Performance Across Six Dimensions:
Dimension |
State |
Key Strength |
Framework |
Kerala |
Robust legal and institutional framework for Panchayats |
Functions |
Tamil Nadu |
Devolved functional responsibilities to Panchayats |
Finances |
Karnataka |
Best financial management practices |
Functionaries |
Gujarat |
Personnel management and capacity-building efforts |
Capacity Enhancement |
Telangana |
Institutional strengthening efforts |
Accountability |
Karnataka |
Transparency and financial accountability |
Challenges in PRI Empowerment
Institutional Flaws:
- Rotation of reserved seats (SCs, STs, Women) affects leadership continuity.
- District Planning Committees (DPCs) exist but lack proper implementation.
Inconsistent Transfer of Functions:
- 29 subjects (11th Schedule) not uniformly transferred due to state governments’ control.
Weak Financial Autonomy:
- State Finance Commissions (SFCs) not effectively implemented.
- Centralized GST reduces fiscal autonomy of PRIs.
Poor Resource Capacity:
- Elected representatives lack training in governance, budgeting, and planning.
Low Accountability:
- Low social audits & Gram Sabha participation reduce oversight.
- Lack of financial disclosures affects transparency.
Recommendations for Strengthening PRIs
Fund Utilization:
- Strict monitoring to prevent misuse and corruption.
Strengthening Panchayat Bhawans:
- Act as hubs for public services & government schemes (e.g., Ayushman Bharat).
Full Devolution of Powers:
- States should empower Panchayats for effective governance.
Strengthening SFCs:
- Ensure timely and consistent fund allocation.
Autonomy in Decision-Making:
- Panchayats should have a greater say in MGNREGA, NHM, PMAY.
Enhancing Digital Infrastructure:
- E-Governance in Panchayats for better transparency.
Status of PRI Funding
Revenue Composition:
- PRIs generate only 1% of revenue through local taxes.
- 80% of PRI revenue comes from Central grants.
- 15% from State government grants.
Revenue per Panchayat:
- Own tax revenue: ₹21,000 per Panchayat.
- Non-tax revenue: ₹73,000 per Panchayat.
- Central grants: ₹17 lakh per Panchayat.
- State grants: ₹3.25 lakh per Panchayat.
Low Revenue Expenditure:
- Revenue expenditure ratio to nominal GSDP is <0.6% in all states.
- Lowest: Bihar (0.001%)
- Highest: Odisha (0.56%)
Inter-State Disparities:
- Highest PRI Revenue: Kerala (₹60 lakh), West Bengal (₹57 lakh).
- Lowest PRI Revenue: Andhra Pradesh & Punjab (<₹6 lakh).
Improvement in PRI funding
Regular Transfer of Funds:
- Finance Commissions should ensure stable PRI funding, avoiding ad-hoc grants.
Financial Transparency & Accountability:
- Strengthen audits, RTI disclosures, and procurement processes.
Capacity Equalization:
- Fiscal transfers should match state capacities to finance PRIs.
Strengthening SFCs:
- Regular reporting & implementation of SFC recommendations.
Enhancing Own Revenue Generation:
- Panchayats should increase local tax collection (e.g., land taxes).
Special-Purpose Grants:
- Targeted grants for infrastructure, sanitation, and roads.
The Panchayat Devolution Index 2024 highlights the progress and gaps in PRI empowerment.
While some states like Karnataka, Kerala, and Tamil Nadu have strong devolution frameworks, others lack financial autonomy and functionary support. Strengthening Panchayati Raj Institutions is crucial for grassroots governance, rural development and participatory democracy in India.
