FINANCES OF PANCHAYATS IN KARNATAKA:
A POLICY PAPER
M. Devendra Babu
For panchayats to be called self-governing institutions, some degree of fiscal autonomy is needed, among other factors. The analysis of this aspect in the context of Karnataka State, however, reveals certain disturbing trends. Overall, the panchayats in the State have very little fiscal autonomy. The fiscal provisions incorporated in the state Panchayat Raj Act have centralised tendencies. The locally raised revenues are negligible, and thus largely depend on government grants. Of late, the transfers from the State to the panchayats have been declining.