An autonomous research institute under the Ministry of Finance


Fiscal Decentralization to Rural Local Governments: Selected Issues and Reform Options

Publication date

May, 2011


Report submitted to the Ministry of Panchayati Raj, Government of India


M. Govinda Rao, T. R. Raghunandan, Manish Gupta, Polly Datta, Pratap Ranjan Jena, H. K. Amar Nath


This is an exploratory study on the process and status of decentralisation to rural local governments in different states in India. The study draws lessons from the detailed review of various theories of fiscal federalism. In the background of these, it analyses the functional devolution to the rural local governments in different states in India, examines the status of activity mapping and gores on to undertake activity mapping in some of the states. The analysis of own revenues helps in drawing recommendations to augment the resources of rural local governments. The study also makes a detailed review of the functioning of the State Finance Commissions.

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