Revenue Receipts of Panchayats Highest in UP | 09 Feb 2024

The recently released report titled 'Finances of Panchayati Raj Institutions' by the Reserve Bank of India (RBI) for the fiscal year 2022-23 sheds light on the financial dynamics of Panchayati Raj Institutions (PRIs) in India.

State Revenue Share and Inter-State Disparities:
- Panchayats' share in their respective State's own revenue remains minimal.
  - For example, in Andhra Pradesh, revenue receipts of panchayats form just 0.1% of the State’s own revenue, while in Uttar Pradesh, it forms 2.5%, the highest among states.
- There are wide variations among states regarding average revenue earned per panchayat.
  - Kerala and West Bengal lead with average revenues of over Rs 60 lakh and Rs 57 lakh per panchayat, respectively.
  - The revenue was over Rs 30 lakh per panchayat in Assam, Bihar, Karnataka, Odisha, Sikkim, and Tamil Nadu.
  - States like Andhra Pradesh, Haryana, Mizoram, Punjab, and Uttarakhand have significantly lower average revenues, less than Rs 6 lakh per panchayat.
Recommendations of RBI:
- The RBI suggests promoting greater decentralization and empowering local leaders and officials. It advocates for measures to enhance financial autonomy and sustainability of Panchayati Raj.

The 73^rd Constitutional Amendment Act, 1992 gave constitutional status to the Panchayati Raj Institutions (PRIs) and established a system of uniform structure (three tiers of PRIs), elections, reservation of seats for Scheduled Caste, Scheduled Tribes and women and devolution of fund, functions and functionaries to PRIs.
- Panchayats act on three levels: gram sabhas (village or group of small villages), panchayat samithis (block council), and zila parishads (district).
The Ministry of Panchayati Raj looks into all matters relating to the Panchayati Raj and Panchayati Raj Institutions. It was created in May 2004.
Number of Panchayats in UP: 59, 062
Number of Blocks in UP: 826
Number of Districts in UP: 75