The effectiveness of Panchayati Raj Institutions depends substantially on the adequacy, autonomy, and predictability of their financial resources. As constitutionally recognized institutions of local self-government, Panchayati Raj Institutions are expected to plan and implement programs of economic development and social justice. To discharge these responsibilities meaningfully, they require a sound financial base that enables them to function not merely as implementing agencies of higher governments but as self-governing units accountable to local communities. The Constitution of India, through the Seventy-Third Constitutional Amendment Act, laid down a framework for strengthening the financial position of Panchayati Raj Institutions. Article 243H empowers state legislatures to authorize Panchayats to levy, collect, and appropriate taxes, duties, tolls, and fees. It also provides for the assignment of revenues from state taxes to Panchayats and for grants-in-aid from the Consolidated Fund of the State. This constitutional backing recognizes that financial decentralisation is an essential component of political and administrative decentralisation. One of the primary sources of finance for Panchayati Raj Institutions is their own revenue. Own-source revenues include taxes, fees, and charges levied and collected directly by Panchayats within their jurisdiction. Common local taxes include property or house tax, tax on markets and fairs, water tax, drainage tax, lighting tax, profession tax where permitted, and taxes on vehicles, animals, or advertisements. Fees and user charges may be collected for services such as water supply, sanitation, street lighting, use of community assets, registration of births and deaths, and licenses for shops or trades. Own revenues are significant because they enhance local fiscal autonomy, strengthen accountability to citizens, and reduce excessive dependence on higher levels of government. However, in practice, the yield from own sources remains limited due to narrow tax bases, low rates, weak assessment and collection mechanisms, political reluctance to tax local residents, and administrative capacity constraints. Another important component of Panchayat finances is assigned revenues. Assigned revenues are those that are levied and collected by the state government but wholly or partially transferred to Panchayats. These may include a share in land revenue, stamp duties, motor vehicle tax, entertainment tax, or other state taxes as decided by the state legislature. The assignment of revenues helps bridge the gap between limited local taxing capacity and growing expenditure responsibilities. The extent and nature of such assignments vary widely across states, reflecting differences in fiscal policy, political priorities, and administrative arrangements. Grants-in-aid from the state government constitute a major portion of Panchayati Raj finances. These grants may be general or specific in nature. General or untied grants provide Panchayats with flexibility to allocate funds according to local priorities and needs. Specific or tied grants are earmarked for particular purposes, schemes, or sectors such as drinking water, sanitation, health, education, rural roads, or poverty alleviation. While tied grants