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India : Fiscal Decentralization to Rural Governments

The objective of this study is to review panchayat finances, identify issues and make recommendations to improve the fiscal decentralization system. Using Kamataka and Kerala as case studies, this report describes the context for rural decentraliza...

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Bibliographic Details
Main Author: World Bank
Language:English
en_US
Published: Washington, DC 2013
Subjects:
DECENTRALIZATION IN GOVERNMENT
RURAL COMMUNITIES
EXPENDITURE ASSIGNMENTS
LOCAL GOVERNMENT CAPACITY
BUDGET ADMINISTRATION
INFORMATION SYSTEMS
POLICY MAKING PROCESSES
LOCAL ORGANIZATIONS
FISCAL DECENTRALIZATION
DRINKING WATER CONSUMPTION
PRIMARY EDUCATION
SECONDARY EDUCATION
HEALTH SERVICES
CAPACITY BUILDING
FISCAL FRAMEWORK
LOCAL AUTONOMY ACCOUNTABILITY
ACCOUNTING
ADMINISTRATIVE ARRANGEMENTS
ADMINISTRATIVE AUTONOMY
ASSIGNMENT OF EXPENDITURES
AUTHORITY
BUDGETARY AUTONOMY
CENTRAL GOVERNMENT
CITIES
CONSTITUTION
CONSTITUTIONAL AMENDMENTS
DECENTRALIZATION PROCESS
DECENTRALIZATION SYSTEM
DECISION MAKERS
DECISION-MAKING
DECISION-MAKING POWER
DEVOLUTION
DISTRICTS
EMPLOYMENT
EMPLOYMENT GENERATION
EQUALIZATION
EXECUTION
EXPENDITURE
EXPENDITURE RESPONSIBILITIES
EXTERNALITIES
FINANCIAL MANAGEMENT
FINANCIAL MANAGEMENT SYSTEMS
FISCAL
FISCAL INFORMATION
FISCAL PRESSURES
FISCAL PROBLEMS
FISCAL SITUATION
FISCAL YEAR
FISCAL ~~~~~ DECENTRALIZATION
GOVERNMENT FINANCE
GOVERNMENT LEVEL
GOVERNMENT OFFICIALS
GOVERNMENT PROGRAM
GOVERNMENT RESPONSIBILITY
GOVERNMENT REVENUE
GOVERNMENT SPENDING
GOVERNMENTAL ORGANIZATION
GRANT DESIGN
GROSS DOMESTIC PRODUCT
INCOME
INSTITUTIONAL FRAMEWORK
INTERGOVERNMENTAL FISCAL SYSTEM
INTERGOVERNMENTAL SYSTEM
INTERGOVERNMENTAL TRANSFERS
JUDICIARY
LEGISLATION
LOCAL AUTONOMY
LOCAL BODIES
LOCAL FINANCE
LOCAL GOVERNMENT
LOCAL GOVERNMENT EMPLOYEES
LOCAL GOVERNMENT FINANCE
LOCAL GOVERNMENT OFFICIALS
LOCAL GOVERNMENT REVENUE
LOCAL GOVERNMENT SECTOR
LOCAL GOVERNMENT SPENDING
LOCAL GOVERNMENTS
LOCAL LEVEL
LOCAL OFFICIALS
LOCAL REVENUE
LOCAL SELF-GOVERNMENT
LOCAL TAXES
MANDATES
MINISTRY OF FINANCE
MUNICIPALITIES
NATURAL RESOURCES
OWN SOURCE REVENUE
PANCHAYATS
POLITICIANS
PRODUCTIVITY
PROPERTY TAX BASE
PROPERTY TAXES
PROVISIONS
PUBLIC EXPENDITURES
PUBLIC SERVICES
REVENUE MOBILIZATION
ROADS
STATE EMPLOYEES
STATE FINANCE
STATE GOVERNMENT
STATE GOVERNMENTS
TAX
TAX ADMINISTRATION
TAX LAWS
TAX RATE
TAX REVENUES
TAX SYSTEM
TAXATION
TOTAL EXPENDITURES
URBAN GOVERNMENTS
USER CHARGES
VOTERS
VOTING
WATER SUPPLY
Online Access:http://documents.worldbank.org/curated/en/2004/01/2874424/india-fiscal-decentralization-rural-governments
http://hdl.handle.net/10986/14674
Description
Summary:The objective of this study is to review panchayat finances, identify issues and make recommendations to improve the fiscal decentralization system. Using Kamataka and Kerala as case studies, this report describes the context for rural decentralization in India, summarizes the current fiscal situation of district, block and village panchayats, identifies the main problems arising from the current practice, and outlines a set of reform options that might better satisfy the objectives of the central and state governments. Kamataka and Kerala were examined because these two states are generally thought to be more advanced than others in implementing rural fiscal decentralization and are therefore relevant for drawing lessons for the rest of India. There is a hierarchical arrangement of center-state-local governance. The 73rd Amendment to the Constitution made India one of the most politically decentralized countries in the developing world. By the Constitution and in practice, local government has an urban and a rural stream. Rural local governments are divided into three levels: district (zilla), block (taluk), and village (gram) panchayats. The design and implementation of the decentralization program are a state government responsibility. However implementation of key aspects of the program is lagging. Districts and blocks have no taxing powers and little expenditure autonomy. Both in Karnataka and Kerala, they more or less function as spending agents of higher-level governments. Gram panchayats are closest to the people, have some independent taxing power, and some discretion in expenditure decisions. Hence they are the primary subjects of this study.

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