Local bodies should look at raising their own resources as well: Arvind Panagariya

The rural and urban local bodies should look at raising their own resources and it will mobilise the citizens in terms of their expectations and demands from the local bodies, 16th Finance Commission Chairman Arvind Panagariya said on Thursday. Speaking at a one-Day Finance Commissions Conclave themed "Devolution to Development" organised by the Ministry of Panchayati Raj, Panagariya also said that a convergence is being witnessed in the demands of the urban and rural local bodies.

At the conclave, which aims at facilitating crucial deliberations on addressing systemic challenges, ensuring timely constitution of State Finance Commissions, implementation of recommendations and strengthening institutional mechanisms to ensure a smooth flow of funds to the Panchayati Raj Institutions (PRIs), fostering financial autonomy and self-reliance among the Panchayats was among the topics in focus.

The issue of Panchayat finances, including devolution of funds, functions and functionaries, along with strategies to enhance local revenue sources were among the key issues.


Panagariya said that local bodies should look at raising their own resources as well.

"From the view point of service provision it is important to raise some own resources also... when citizens pay taxes, they are also aware of services that ought to be rendered to them," he said.

"It is also the logic of devolution of the functions at local levels. Locals know what they need and want. That knowledge will convert into a more activist kind of demand."

Panagariya said it will also mobilise the citizens.

"In some way efforts should be made by the panchayats and urban local bodies to raise at least some part of their revenues from their own jurisdiction. That is an important way to mobilise citizenry in terms of its expectations and demands," he said.

Meanwhile, Panchayati Raj Secretary Vivek Bharadwaj said the conclave brings together stakeholders so that there is an integration in thought and action.

"For the 2.5 lakh Panchayats and people, the Finance Commission is responsible for devolution of resources. We have been trying that there should be an integration of action and thought between the central and state finance commissions. Through this conclave, all stakeholders have come on one platform," he said.

The conclave being organised by the Panchayati Raj Ministry brings together key representatives from the 16th Finance Commission, the Ministry of Panchayati Raj, the Ministry of Rural Development, the Ministry of Finance, the Ministry of Housing and Urban Affairs, as well as eminent experts and representatives from the State Finance Commissions and other relevant institutions.