← All questionsGS2 · 2018 · Polity ·Panchayats and Their Own Sources of Finance
QUESTION 15
GS2
15 marks

Assess the importance of the Panchayat system in India as a part of local government. Apart from government grants, what sources the Panchayats can look out for financing developmental projects?

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11 min
250 words
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What the examiner wants

Assess the role of panchayats and suggest financing sources other than government grants.

Assess + DiscussWeigh the evidence and say how far the claim holds. Explain the different sides of the issue, use evidence, and finish with a balanced view.

Demand-wise check

  1. 1Importance: grassroots democracy, local planning, delivery, women's participation≈50 words
  2. 2Own sources: property tax, user charges, fees, rental income, common property resources, market fees≈50 words
  3. 3Other: CSR, crowdfunding, PPP, borrowing (limited), green bonds via municipalities, MPLADS convergence≈50 words
  4. 4Issues: low collection, capacity≈50 words

Open in about 30 words and close in about 30.

Answer plan

ImportanceOwn revenueOther sourcesIssuesConclusion

Where marks usually go

  • Only grants
  • No own-revenue example, e.g. property tax drives or CSR-funded village projects

Draw this

  • Pie: panchayat revenue sources

Value addition

  • DataPanchayats' own revenue is about 1% of their total revenue on average (RBI 2024 study).RBI, Finances of Panchayati Raj Institutions (2024)
  • ExampleKerala panchayats collect property tax and user fees more effectively than most states.Kerala Local Self Government Department

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