13th and 74th Constitutional Amendment Act provided for Panchayat Raj in India ensuring Article 40 COPSP to follow 'Principle of Subsidiarity'. Discuss the lacunaes and financial disabilities and constraints.

13th and 74th Constitutional Amendment Act provided for Panchayat Raj in India ensuring Article 40 COPSP to follow 'Principle of Subsidiarity' Lacunaes in financial disabilities and constraints: A) Scheme bound: 90% of the funds are linked to scheme & not available for other plans B) Institutional hurdle due to lack of political will - As of March 2023, only nine SFGs are functional C) Tax collection: minimal by PRIs - Urban: ULV - Rural: 5-7% tax collection D) Delay in fund-devolution by State and Centre impact financial health of PRIs E) Salaries of functionaries form major chunk of expenditure, still amount for capital expenditure F) Legal Mandates to have positive effect, thus borrowing is minimal for PRIs Measures to augment revenue resources: A) Expand tax-base: to improve financial health of PRIs B) New channels like municipal bond (Ahmedabad and Indore) can be utilized by PRIs C) Remove shyness in tax-collection as it will provide independent in planning and implementation D) Remove institutional backlashing by reconstructing SFCs in all state E) Pro-activeness steps like Fund Your City, by IBFD Samrasat, INS can be explored F) Digitalization of chain for timely disbursal of fund (ARC-II) G) Devolution of fund as proposed by Sumit Bose Committee

PRIs are 'festivals of democracy' whose financial health is needed to ensure 'Minimum Government, Maximum Governance'