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GOVERNMENTOF INDIA
MINISTRYOF PANCHAYATIRAJ
LOK SABHA
UNSTARREDQUESTION NO. 2813
ANSWEREDON 10.03.2026
FUNDSALLOCATEDFORPANCHAYATIRAJINSTITUTIONS
2813.SHRIAZAD KIRTI JHA:
Will the Minister of PANCHAYATIRAJ be pleased to state:
(a) the details of the fund allocation to Panchayati Raj Institutions (PRIs) during each of last
five Union Budgets;
(b) whether the Government has reviewed the reasons for the observed decline in allocations,
as noted by Standing Committee on Rural Development and Panchayati Raj, if so, the details
thereof;
(c) the details of average Own Source Revenue (OSR) per panchayat at national level during
eachof last five years, State-wise;
(d) whether the assessment of current OSR levels are adequate to support local development
andfiscal autonomy, if so, the detailsthereof;
(e) whether the Government has taken note that certain States such as West Bengal, Kerala
and Goa have reportedrelatively higherOSRand stronger local governance performance, and
if so, whether such modelsare beingconsidered for replication;and
(f) the measures taken or proposed by the Government to strengthen fiscal devolution,
enhance untied and performance-linked transfers and support capacity-building of PRIs to
improve theirfinancial self-reliance andservice delivery?
ANSWER
THE MINISTER OF PANCHAYATI RAJ
(SHRIRAJIVRANJAN SINGH ALIAS LALAN SINGH)
(a) & (b) The year-wise funds allocated to the Rural Local Bodies during the last five Union
Budgetsare asunder:
(Rs. incrore)
FinancialYear BudgetEstimates
2020-21 69,224.79
2021-22 44,901.00
2022-23 46,513.00
2023-24 47,018.00
2024-25 49,800.00
1The fund allocationto the RLBs after2020-21 hasconsistently increased.
(c) The details of average Own Sources of Revenue (OSR)per Panchayat at national level are
not maintained centrally. However, details of OSR generated by Rural Local Bodies (RLBs)
as compiled by the 16th Finance Commission for the period 2019-20 to 2023-24 is at
Annexure.
(d) 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 thatthe primaryresponsibility for the provision of fiscal resources for local bodies
restswith theStateGovernments.
(e) The Ministry of Panchayati Raj shares study/survey reports onvariousaspectsof the PRIs
including study on status of devolution to Panchayats as also the scores of Panchayat
Advancement Index (PAI) with the States/UTs showing the comparative pictures that serves
the principal sources of inspiration to low performing States/UTs to improve their position.
Also, the best practices of the Award-winning Panchayats are disseminated through various
means with a view to adopting or replicating by low performing Panchayats to improve their
lot. The State of West Bengal has not participated in the Panchayat Advancement Index (PAI)
exercise norhasit wonanyNationalPanchayatAwardsonOSR.
(f) PanchayatisaStatesubject andtherefore itistheresponsibility ofthe StateGovernment to
devolve power including fiscal to their Panchayats in accordance with the provisions
contained in their respective State Panchayati Raj Acts. The Ministry of Panchayati Raj
(MoPR) supplements and complements the efforts of State Governments, including financial
support under its schemes towards strengthening and efficient functioning of the Panchayati
Raj Institutions (PRIs) on a continuous basis. The Ministry has been advising the States to
devolve more and more powers to their Panchayats to make them self-reliant in all matters,
particularlygenerationof ownsources ofrevenue (OSR)throughtransfer offinancialpowerto
them. In order to strengthen the financial autonomy and technical support to Panchayats to
enable them to undertake local development projects effectively, all Finance Commission
grants are deposited directly into the accounts of Panchayats by the States. The Ministry
undertakes periodical studies like the Panchayat Devolution Index (PDI) which reviews the
status of devolution to the Panchayats by the States/UTs in the areas of funds, functions and
functionalitiestofoster competitivenessamongtheStatestodevolvemore andmore powersto
the Panchayats.
The Ministry, through its memorandum to the Sixteenth Finance Commission (SFC),
hadrecommend higherallocationto the RLBs inviewof theirrolesandresponsibilities
and as a result of which the SFC has recommended a total grant of ₹4,35,236 crore for
the RLBs, which is an increase of nearly 84% compared to the allocations made under
the FifteenthFinance Commission. Further, the SFChasrecommendedOSRgeneration
performance-linked grants to Panchayats of all tiers. In addition, the Commission has
also recommended performance grants to States provided they transfer funds to the
RLBs out of their own resources. These recommendations have been accepted by the
Government.
2The Ministry has been focusing on the capacity building of the PRIs in various areas
with due emphasis on mobilisation of own sources of revenue and service delivery
having potential of generation of own revenue for attaining financial and self-reliance.
For this the Ministry has beenimplementing Revamped Rashtriya Gram Swaraj Abhiyan
scheme. During 2022-23 and till date 1.54 crore cumulative number of elected
representatives of the PRIs and their functionaries have been imparted training. The
Ministry, in collaboration with IIM Ahmedabad, has developed a training module on the
generation of Own Sources Revenue (OSR) to strengthen the financial autonomy of
Gram Panchayats. The module enables elected representatives and Panchayat
functionaries to understand OSR generation through tax and non-tax sources. So far,
2,39,943participants have beenimpartedtrainingunderOSR.
***
Annexure
3Annexure referred to in reply to Part (c) of the Lok Sabha Unstarred Question No. 2813
answered on10.03.2026regardingFunds AllocatedforPanchayatiRaj Institutions
State-wise details of Own Sourcesof Revenue GeneratedbyRuralLocal Bodies
(₹crore)
State 2019-20 2020-21 2021-22 2022-23 2023-24
Andhra Pradesh 1,536.75 1,413.05 1,385.19 1,712.05 1,315.01
Arunachal Pradesh 0.00 0.00 0.00 0.00 0.00
Assam 42.08 81.03 35.95 42.22 44.79
Bihar 53.50 53.50 53.11 52.45 55.39
Chhattisgarh 71.86 50.49 58.32 78.01 89.46
Goa 53.18 52.24 67.91 85.26 96.60
Gujarat 348.61 325.38 363.87 347.90 435.70
Haryana 480.43 353.36 634.04 691.67 1,104.85
HimachalPradesh 124.66 154.94 141.27 163.71 157.18
Karnataka 1,891.00 2,106.08 3,156.80 2,415.74 2,792.42
Kerala 816.71 821.43 1,674.10 1,831.82 2,330.09
Madhya Pradesh 160.47 132.69 182.50 148.68 233.78
Maharashtra 3,906.52 3,416.93 4,146.94 4,311.55 4,744.93
Manipur 0.39 0.51 0.24 0.18 0.08
Odisha 65.60 55.41 52.60 63.92 74.00
Punjab 511.30 531.93 522.26 539.89 559.01
Rajasthan 99.54 109.50 120.44 132.49 145.74
Sikkim 5.75 5.03 5.86 6.86 7.10
TamilNadu 855.74 1,152.64 1,396.31 1,520.67 1,195.81
Telangana 487.19 481.09 546.52 521.65 514.91
Tripura 3.12 4.25 3.47 4.15 4.63
Uttar Pradesh 176.67 229.08 243.26 276.00 294.91
Uttarakhand 41.63 37.96 151.15 57.96 56.17
WestBengal 1,503.68 987.12 1,138.06 1,104.68 1,029.48
Total 13,236.37 12,555.64 16,080.17 16,109.50 17,282.01
Source: Data provided by the States on Portal of Sixteenth Finance Commission (as on 31
August 2025)
Note: Jharkhand, Mizoram and Nagaland reported NA and Meghalaya provided only
ADCsOSR whichhave beenexcluded fromthe RLBs OSR
***
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