ISS Previous Year Paper 2019 GS Solution Question 3(d) Fiscal Decentralisation and Panchayati Raj Institutions in India

ISS Previous Year Paper 2019 GS Solution Question 3(d) Fiscal Decentralisation and Panchayati Raj Institutions in India. Detailed answer discussing the importance of fiscal decentralisation and its role in strengthening local self-government.

ISS Previous Year Paper 2019 GS Solution Question 3(d) Fiscal Decentralisation and Panchayati Raj Institutions in India

ISS Previous Year Paper 2019 GS Solution Question

Q.3(d) Discuss the importance of fiscal decentralisation for strengthening Panchayati Raj Institutions in India.

Answer :

Fiscal decentralisation plays a crucial role in empowering Panchayati Raj Institutions and improving local governance. It enables local bodies to plan and implement development programs according to local needs and priorities.

One of the major benefits of fiscal decentralisation is that it enhances financial autonomy. Panchayats with adequate financial resources can undertake infrastructure development, provide basic services, and respond more effectively to local issues.

Fiscal decentralisation also improves accountability and transparency. Since local representatives are directly accountable to the community, public resources can be utilized more efficiently. Citizens can actively participate in decision-making and monitor development activities.

The Constitution provides for the establishment of State Finance Commissions (SFCs) to recommend the distribution of financial resources between state governments and local bodies. Grants from the Central and State Governments further support Panchayats in performing their functions.

However, many Panchayati Raj Institutions continue to face challenges such as inadequate revenue generation capacity, dependence on higher levels of government, and delays in fund transfers. Limited administrative and technical capacity also affects effective utilization of resources.

Strengthening fiscal decentralisation through greater revenue powers, timely fund allocation, and capacity-building measures can significantly improve local governance and rural development.

Conclusion

Fiscal decentralisation is essential for making Panchayati Raj Institutions effective instruments of grassroots democracy. Greater financial autonomy and resource availability can enhance local development, citizen participation, and overall governance outcomes.