Concerns raised over Panchayat fiscal health
16th Finance Commission pitching for Panchayats to raise their Own Source Revenue (OSR) to gain financial autonomy, the Centre recently instituted a study to build a viable financial model for the same and has asked states to fix gaps red flagged in the report, ET has learnt.
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The Centre will soon be asking states to implement the slew of recommendations made in the study-from issuing clear cut guidelines on tax assessments and levying of user charges at Panchayat level besides ensuring appointment of Panchayat Secretaries in every Gram Panchayat backed with tax trained staff to address the 'skill gap' at GP level.
Examples of West Bengal and Maharashtra are cited to pitch for panchayats to maintain local services like water supply besides the need for standardised rate structure and tariff rates for trade licenses backed with community-based monitoring mechanisms, as per the study conducted by the National Institute of Public Finance & Policy (NIPFP) which also moots legal amendments where necessary.
There is a good reason- data compiled by the Ministry of Panchayati Raj (MoPR) shows that Gram Panchayats could raise no more than₹5,118.98 crore as OSR between 2017 to 2022. This amounts to just ₹59 per capita and ₹2.27 lakh per panchayat even though there are nearly 20 types of taxes/charges that the Panchayat is empowered to levy and collect.
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