Financial Crisis Hits Telangana's Rural Local Bodies
As Telangana prepares for upcoming gram panchayat elections, a parliamentary expert committee has sounded alarm bells over the deteriorating financial health of rural local bodies. The committee's analysis reveals that Telangana's gram panchayats generate an average per capita revenue of just Rs 159 from their own sources, highlighting serious structural problems that demand immediate attention.
Steady Decline in Revenue Generation
The expert committee's detailed examination shows a worrying trend of declining own source revenue (OSR) over recent years. According to the report, the average OSR of gram panchayats in Telangana dropped significantly from Rs 397 in 2017-18 to Rs 292 in 2021-22. The year-wise breakdown presents an even clearer picture of this downward spiral:
- Rs 425 in 2018-19
- Rs 321 in 2019-20
- Rs 278 in 2020-21
- Rs 292 in 2021-22
During the five-year period from 2017-18 to 2021-22, Telangana's gram panchayats recorded an average OSR of Rs 343, but the consistent decline indicates deeper systemic issues.
Comparative Performance and Systemic Challenges
When compared with other states, Telangana ranks fifth in per capita own revenue generation during 2017-18 to 2021-22. Goa leads the list with Rs 1,635 per capita, followed by Kerala (Rs 286), Andhra Pradesh (Rs 209), and Gujarat (Rs 199). The national average stands at just Rs 59, but Telangana's performance remains concerning given its economic potential.
The committee identified several critical factors behind this poor revenue performance. Gram panchayats show remarkable reluctance to impose and collect taxes, despite having constitutional empowerment to levy, collect, and appropriate taxes, duties, tolls, and fees within prescribed limits. Additional challenges include:
- Lack of updated rules and guidelines at the state level
- Inadequate devolution of taxation powers to panchayats
- Citizen resistance to tax payments
- Absence of penalties for defaulters
- Heavy dependence on central and state funds
- Insufficient infrastructure and resources for revenue collection
Implications for Rural Development
The expert committee warns that unless these fundamental gaps are addressed promptly, rural local bodies will continue to struggle financially, severely limiting their capacity to deliver essential services and undertake development works. This financial weakness could impact everything from basic infrastructure to healthcare and education services in rural Telangana.
The timing of this report is particularly significant as the state readies for gram panchayat elections. The findings highlight the urgent need for policy corrections and better financial management at the grassroots level to ensure sustainable development across Telangana's villages.
