Hindu Editorial Analysis : 29-January-2024

The Reserve Bank of India (RBI) recently released a groundbreaking report addressing the financial health of Panchayati Raj Institutions (PRIs) in India. This essay explores the key findings, challenges, and proposed measures to enhance the efficacy of local governance.

Understanding the Gap in Governance

The report highlights the long-standing gap in understanding the fiscal health of local governance in India, despite the 73rd amendment passed over 30 years ago. The envisioned empowerment is yet to be fully realized, indicating a need for a comprehensive assessment.

Key Findings
  • Factors Affecting Efficacy:
    • Contingent upon resources, capabilities, political support, and community engagement.
  • Financial Hurdles:
    • Main obstacle is inadequate resources.
    • PRIs rely heavily on transfers, neglecting potential revenue sources like property tax and fees.
  • Lack of Autonomy:
    • Heavy reliance on grants limits financial independence.
    • Subsidiarity principle remains unrealized, hindering effective local decision-making.
  • Uneven Devolution and Development:
    • Regional disparities affect powers and functions devolution.
    • Southern states outperform others, linking progress to human development indicators.
About Panchayati Raj
  • Three-tier System:
    • Village panchayats at grassroots, block panchayats at intermediate, and zilla parishads at district levels.
    • 73rd amendment institutionalized Panchayati Raj Institutions.
Importance of Panchayati Raj
  • Rural Governance:
    • Critical for local governance and rural development, given 69% of the population resides in rural areas.
    • Translates the vision and policies of central and state governments into action.
  • Addressing Local Needs:
    • Possesses detailed information on local preferences and needs.
    • Suited for providing basic public goods and services.
Challenges in Panchayati Raj
  • Limited Devolution of Power:
    • Inadequate financial resources hinder basic service delivery.
    • Shortage of trained personnel at the Panchayat level.
  • Political Interference:
    • Contestation along party lines leads to politicization.
    • Bureaucratic hurdles delay approvals and hinder project implementation.
  • Internal Weaknesses:
    • Corruption, lack of transparency, and accountability undermine public trust.
    • Limited awareness and capacity impede effective participation.
    • Gender gap restricts women’s influence in decision-making.
Proposed Measures
  • Decentralization:
    • True devolution of funds, functions, and functionaries.
  • Transparency and Accountability:
    • Regular transparent audits of finances and projects.
  • Empower Gram Sabhas:
    • Active participation in decision-making, budget allocation, and project monitoring.
  • Promote Active Citizen Participation:
    • Mechanisms like social audits to empower marginalized communities.
Why In News

The Reserve Bank of India (RBI) recently unveiled its inaugural report on the ‘Finances of Panchayati Raj Institutions,’ shedding light on the financial landscape of these local governing bodies. The comprehensive analysis provides valuable insights into the fiscal health and challenges faced by Panchayati Raj Institutions, offering policymakers a foundation for informed decision-making in fostering grassroots development.

MCQs about Panchayati Raj Institutions in India

  1. What is the main stumbling block hindering the financial independence of Panchayati Raj Institutions (PRIs)?
    A. Lack of political support
    B. Inadequate resources
    C. Limited engagement of the local community
    D. Overreliance on property tax
    Correct Answer: B. Inadequate resources
    Explanation: The primary obstacle to financial independence for PRIs is the insufficient availability of resources. PRIs often rely on transfers from higher levels of government, neglecting potential revenue sources like property tax.
  2. what principle, enshrined in the EU’s Maastricht Treaty, is far from being realized in India’s third tier of government?
    A. Autonomy principle
    B. Subsidiarity principle
    C. Devolution principle
    D. Empowerment principle
    Correct Answer: B. Subsidiarity principle
    Explanation: The principle of subsidiarity, where higher levels of government should perform only functions that cannot be effectively done at the local level, is not fully realized in India’s third tier of government.
  3. What is the significance of the 73rd amendment to the Constitution of India?
    A. Institutionalizing PRIs
    B. Granting autonomy to local governments
    C. Allocating additional funds to PRIs
    D. Establishing a three-tier governance system
    Correct Answer: A. Institutionalizing PRIs
    Explanation: The 73rd amendment institutionalized Panchayati Raj Institutions (PRIs) in India, forming a three-tier system at the village, block, and district levels.
  4. what challenge is associated with Panchayat elections, leading to the politicization of local governance?
    A. Lack of awareness
    B. Bureaucratic hurdles
    C. Limited devolution of power
    D. Contestation along party lines
    Correct Answer: D. Contestation along party lines
    Explanation: The Panchayat elections are often contested along party lines, resulting in the politicization of local governance and prioritizing partisan interests over community needs.

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