The Cabinet on Wednesday approved a Rs 7,395 crore scheme to transform over 0.25 million gram panchayats into financially empowered, self-reliant, accountable and high-performing institutions of local self-government through better use of funds and a digital framework.
The scheme, according to Union Information and Broadcasting Minister Ashwini Vaishnaw, aims at a paradigm shift from prescription-based schemes to a model focused on local-level capacity-building and planning. The new scheme would enable panchayats to identify their local resources and constraints and prepare development plans based on their specific needs.
“This is a paradigm change,” the minister said, explaining that the approach would move away from schemes that prescribe interventions and instead strengthen local institutions to plan for their own development.
A major focus of the scheme is capacity-building for elected representatives.
General and specialised training will be provided to elected representatives to improve their functioning and governance capabilities.
The scheme seeks to financially empower panchayats through better utilisation of Finance Commission grants and mobilisation of own-source revenue to make them more self-reliant, he said.
Generating own-source revenue (OSR) and making panchayats less dependent on government grants and doles have been long-standing problems in India’s three-tier governance model.
A meeting between the Centre and states held a few months ago identified limited economic activities, low income levels, social and economic constraints, and land scarcity as some of the major challenges that limit the generation of own-source revenue by panchayats.
Although the contribution of own-source revenue to panchayats’ total annual receipts varied from 1 per cent to 40 per cent, it remained an important source for strengthening their financial autonomy and self-reliance.
