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Financial Decentralization, Panchayati Raj Institutions (PRIs) & Rural Development in India
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The passage of the India's Constitution (Seventy-third Amendment) Act, 1992 marked a watershed in the history of this country. With this amendment, a uniform structure of panchayats (village councils) emerged throughout the country. Article 243G, read with the Eleventh Schedule of the Constitution, explicitly requires the states to devolve powers and authority on panchayats, which may be necessary to enable them to function as institutions of self-government. India's decentralization initiative in the form of Seventy-third Amendment poses challenges and offers opportunities. Providing basic services at the grassroots level makes panchayats the primary interface of the citizens' interaction with the government. The principle of subsidiarity implies that matters are best handled by the least centralized competent authority. Following this, these institutions need to be adequately empowered - both functionally and financially - to enable them to fulfill the role envisaged for them in the
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