Question
Elaborate the Financial Resources of Panchayati Raj Institutions.
Answer :
Word Count : 532
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Panchayati Raj Institutions (PRIs) are the foundation of democratic decentralisation in India, as they enable local communities to participate in governance and development activities. The effective functioning of these institutions largely depends on their financial resources and capacity to generate, manage, and utilise funds. Adequate financial autonomy is essential for PRIs to perform their assigned responsibilities under the framework of local governance. The financial resources of Panchayati Raj Institutions can be broadly classified into their own sources of revenue, grants from higher levels of government, and funds received through various development programmes. The Constitution of India, through the 73rd Constitutional Amendment Act, 1992, provided constitutional status to PRIs and emphasised the need for financial empowerment of these institutions. Article 243H allows state legislatures to authorise Panchayats to levy, collect, and appropriate taxes, duties, tolls, and fees. The own revenue sources of Panchayats include local
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