Decentralized Governance and Devolution of Funds to the Panchayats in India: A Critical Analysis of Two States
| Published date | 01 June 2017 |
| DOI | 10.1177/2321023017698259 |
| Author | M. Gopinath Reddy,Bishnu Prasad Mohapatra |
| Date | 01 June 2017 |
| Subject Matter | Articles |
Article
Decentralized Governance and
Devolution of Funds to the
Panchayats in India: A Critical
Analysis of Two States
M. Gopinath Reddy1
Bishnu Prasad Mohapatra2
Abstract
The debates on the devolution of powers to the panchayats since the last two decades received
enormous attention because of the increasing role played by these institutions in planning and imple-
mentation of the development programmes in rural India. But it is observed that devolution agenda
including the agenda of fiscal devolution and tax decentralization has not been taken up sincerely in
many states including the states of Andhra Pradesh and Odisha. Based on the review of secondary data,
the present article critically examines the status of the fiscal devolution to the panchayats in the states
of Andhra Pradesh and Odisha. This article argues that both the states need to strengthen the own
revenue of panchayats based on the recommendations of the Finance Commissions of the respective
states. In this context, the process of tax decentralization and principles of sharing the state taxes
should receive paramount importance.
Keywords
Decentralization, fiscal devolution, panchayats, Andhra Pradesh, Odisha
Introduction
In recent times, there is an increasing realization that genuine decentralization leads to development. It
is also felt that decentralization of power to the local units of government and management is one of the
best ways of empowering people, promoting public participation and increasing efficiency (Reddy,
2003, p. 1284). Decentralization can help mobilize resources, introduce locally and regionally diverse
solutions and promote equitable growth by bringing the poor into mainstream development. Rondenelli
Studies in Indian Politics
5(1) 42–54
© 2017 Lokniti, Centre for the
Study of Developing Societies
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/2321023017698259
http://inp.sagepub.com
1 Professor, Centre for Economic and Social Studies (CESS), Hyderabad, Telangana, India.
2 Research Scholar (PhD), Centre for Economic and Social Studies (CESS), Hyderabad, Telangana, India.
Corresponding author:
M. Gopinath Reddy, Professor, Centre for Economic and Social Studies (CESS), Nizamiah Observatory Campus,
Begumpet, Hyderabad 500016, Telangana, India.
E-mail: mgopinathreddy@gmail.com
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