**Executive Summary**
This report details the Ministry of Panchayati Raj’s efforts to assess and enhance the Own Source Revenue (OSR) of Rural Local Bodies. Following an Expert Committee review and recommendations from the 16th Finance Commission, the Ministry has introduced the SAMARTH Panchayat portal for digital revenue collection and the Atma Nirbhar Panchayat Special Award (ANPSA) in 2025. These initiatives aim to reduce the dependency of Panchayats on government grants and link performance to a recommended allocation of Rs. 43,524 crores.
**Key Points / Main Content**
**Status of Own Source Revenue (OSR)**
* Total OSR collection by Panchayati Raj Institutions (PRIs) across 30 States/UTs was approximately Rs. 25,595 crores between 2017-18 and 2021-22.
* The national annual per capita OSR is approximately Rs. 59, showing significant variation between states (e.g., Goa reaches Rs. 1635).
* Most local bodies remain heavily dependent on Union and State Governments for fiscal resources.
**Identified Challenges**
* State-level rules and guidelines are often outdated or absent.
* There is inadequate devolution of taxation powers to local levels.
* Panchayats exhibit a lack of willingness to impose fees, compounded by limited citizen cooperation and weak enforcement against defaulters.
**Digital Transformation via SAMARTH Panchayat Portal**
* The portal digitizes OSR collection by facilitating tax and non-tax demand generation, maintenance of tax registers, and online payments.
* It provides online tracking of revenue to ensure transparency and efficiency in local financial administration.
* Successfully pilot-tested in Himachal Pradesh and Chhattisgarh, with all states now requested to onboard the platform.
**Incentives and Funding**
* **Atma Nirbhar Panchayat Special Award (ANPSA):** Launched in 2025 under the Rashtriya Gram Swaraj Abhiyan (RGSA) to reward self-reliance. Financial incentives are set at Rs. 1 crore (Rank 1), Rs. 75 lakh (Rank 2), and Rs. 50 lakh (Rank 3).
* **Performance Grants:** The 16th Finance Commission has recommended Rs. 43,524 crores as Rural Local Body performance grants, specifically linked to the generation and enhancement of OSR.
**Impact Analysis**
**State Governments**
**Impact**
States are identified as having the primary responsibility for providing fiscal resources to local bodies and are responsible for the legislative framework governing taxation.
**Action Required**
States must implement Expert Committee reports, update outdated rules, devolve taxation powers, and onboard their districts onto the SAMARTH Panchayat portal.
**Panchayati Raj Institutions (PRIs)**
**Impact**
PRIs are encouraged to transition from government dependency to self-reliance. They stand to gain significant financial rewards and performance-linked grants.
**Action Required**
Panchayats need to adopt digital collection tools, maintain transparent tax registers, and actively impose and collect taxes and fees from citizens.
**Citizens**
**Impact**
Citizens are affected by new enforcement mechanisms against defaults but benefit from transparent online payment gateways and improved local financial administration.
**Action Required**
Citizens are expected to cooperate with tax demands and utilize the digital payment facilities provided by the SAMARTH portal.
Key Entities Referenced
Ministry of Panchayati Raj: The primary ministry responsible for rural local governance and overseeing the assessment and digitization of revenue collection for Panchayati Raj Institutions.
Sixteenth Finance Commission: The commission that observed the fiscal dependency of local bodies and recommended a ₹43,524 crore performance grant linked to the enhancement of Own Source Revenue.
SAMARTH Panchayat portal: A dedicated digital platform developed to facilitate tax demand generation, maintenance of tax registers, and online revenue tracking for local financial administration.
Rashtriya Gram Swaraj Abhiyan (RGSA): A revamped central scheme through which the Ministry incentivizes Panchayats to improve governance and revenue generation.
Atma Nirbhar Panchayat Special Award (ANPSA): A dedicated award category launched in 2025 to provide financial incentives to Gram Panchayats for achieving self-reliance through revenue augmentation.
Ministry of Panchayati Raj
ASSESSMENT OF OWN SOURCE REVENUE
Posted On: 24 MAR 2026 2:01PM by PIB Delhi
The Ministry of Panchayati Raj constituted an “Expert Committee on Own Source Revenue (OSR) of
Rural Local Bodies” in 2022 to review the status of OSR of Panchayats. As per the report of the Expert
Committee, around Rs. 25,595 crores of OSR have been collected by Panchayati Raj Institutions (PRIs) in
the 30 States/UTs, during 2017-18 to 2021-22 and per capita OSR at the national level was around Rs.
59/- annually, for the same period. The per capita OSR varies significantly across the States, ranging up to
Rs. 1635/- per annum in Goa. As per this Report, challenges faced by Panchayats in generating OSR
include absence or outdated nature of State-level rules and guidelines; inadequate devolution of taxation
powers to Panchayats; lack of willingness among Panchayats to impose taxes and fees; limited
cooperation from citizens and weak enforcement mechanisms against defaulters etc. Findings of other
studies on this subject are also on similar lines. Ministry of Panchayati Raj has shared these reports with
States for implementation.
Further, in Para. No. 10.50 of its Report, the 16th Finance Commission has observed that the own
resources generated by the vast majority of local bodies, are minuscule. They remain heavily, if not
entirely, dependent on the Union and State Governments to carry out their mandate. In Para. No. 10.51,
the Commission has further observed that successive Finance Commissions have stated that the primary
responsibility for the provision of fiscal resources for local bodies rests with the State Governments.
The Ministry of Panchayati Raj has undertaken a significant step to digitise the OSR collection of the
Panchayats by developing the “SAMARTH Panchayat portal”, a dedicated digital platform that facilitates
the generation of tax & non-tax demands, maintenance of tax registers, online payment of dues through
payment gateway, and online tracking of revenue. This digital empowerment is designed to bring
transparency, efficiency, and scalability to local financial administration. The portal has been successfully
pilot tested in the State of Himachal Pradesh and Chhattisgarh. All the States, including Punjab, have been
requested to onboard on the SAMARTH Panchayat Portal.
The incentivization of Panchayats is being carried out under the revamped Rashtriya Gram Swaraj
Abhiyan (RGSA) scheme. Under this scheme, in 2025, the Ministry of Panchayati Raj has launched the
Atma Nirbhar Panchayat Special Award (ANPSA) on National Panchayati Raj Day (NPRD), and it is for
the first time that the Ministry has institutionalized dedicated Special Category Awards to incentivize and
acknowledge exemplary efforts of Gram Panchayats in Atmanirbharta (Self-Reliance) through
augmentation of Own Sources Revenue (OSR). Atma Nirbhar Panchayat Special Award(ANPSA) is to
promote Atmanirbharta through augmentation of Own Source Revenue (OSR) by Panchayats. Each award
includes a financial incentive of Rs.1 crore (Rank 1), Rs.75 lakh (Rank 2), and Rs.50 lakh (Rank 3)
respectively.
Further, the Sixteenth Finance Commission has recommended an allocation of Rs. 43,524 crores as Rural
Local Body (RLB) performance grant, which has been linked to the generation and enhancement of OSR
by the RLBs.State Government of Chhattisgarh has informed that in tribal and aspirational regions-including the
Surguja district of Chhattisgarh-it is encouraging Panchayats to collect taxes through the 'Samarth
Panchayat' portal, with the aim of assisting them in augmenting their revenue sources and making the
process transparent.
This information was given by Union Minister Shri Rajiv Ranjan Singh alias Lalan Singh in a written
reply in Lok Sabha on 24th March 2026.
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