There is a need to strengthen the panchayats to mobilise internal revenues for efficient service delivery, according to Ashok Lahiri, member of the 15th Central Finance Commission (CFC).

Speaking at the inaugural of the two-day national conclave of State Finance Commissions (SFC) organised by the National Institute of Rural Development and Panchayati Raj (NIRDPR) here on Tuesday, (CFC), Lahiri said local governments under panchayats actually provide relief to people at the local level by providing them basic services. 

“Gandhiji greatly believed in grassroots democracy, and we see democracy in action only at gram sabha. There is a need to strengthen the panchayats to mobilise internal revenues for efficient service delivery,” Lahiri said, adding that the 15th CFC had recommended enhancing the professional tax from the existing limit of ₹2,500 to ₹18,000 per annum. “The panchayats should mandatorily collect property tax, and it needs to be considered by the States,” the CFC member said.

Significant role

CS Kumar, Additional Secretary, MoPR said the role of State Finance Commission was significant in translating the mandate of the Constitution of India to make the panchayats self-governing institutions. Only nine States had constituted the 6th State Finance Commission (SFC), while another seven had established the 5th State Finance Commission. “There is a considerable variation in the functioning of SFCs and their recommendations. Though taxation powers are given to panchayats in State Panchayati Raj Acts, rules are not framed in many States. With the results, panchayats are unable to mobilise their own source revenues,’‘ he added. 

G Narendra Kumar, Director General, NIRDPR said that the conclave would focus on the following issues for all-round analysis and working of SFCs, and suggest a broad roadmap and strategy aiding the excellent functioning of SFCs in the future.