Boosting Panchayat Revenue: Unveiling the OSR Challenge

Panchayats struggle with low Own Source Revenue (OSR), averaging Rs 59 per capita between 2017 and 2022. Efforts are underway to enhance financial independence through tax generation, though challenges persist. Rural governance bodies rely on grants and seek new revenue sources, like property taxation and GST sharing.

Panchayats across India are grappling with disappointing Own Source Revenue (OSR) figures, noted to be as low as Rs 59 per capita from 2017 to 2022, per government statistics. This data, compiled by the Panchayati Raj ministry, highlights the financial struggles faced by these rural local governance entities.

Despite efforts to bolster financial autonomy for panchayats, they collectively raised just Rs 5,118.98 crore in OSR during this period. Notably, Gujarat and Kerala lead state-wise collections, with Rs 829.75 crore and Rs 802.95 crore, respectively. Conversely, States like Arunachal Pradesh and Bihar lack operational OSR rules.

At a recent conclave with finance and governance experts, discussions focused on enabling panchayats to autonomously raise resources. Proposals include empowering panchayats to levy various local taxes and utilising data-driven tools for effective revenue generation. Still, administrative and representative hesitance poses significant challenges.

(With inputs from agencies.)