Given the significant role of Panchayati Raj Institutions (PRIs) in local governance, assess the challenges and opportunities in strengthening their financial autonomy. How can reforms in PRIs financing contribute to more effective grassroots governance in India?

73 and 74 Amendment had provided for the constitutionalization of PRIs, despite which challenges remain in fiscal autonomy. Challenges in Financial Autonomy: 1) Public Expenditure Management => corruption, leakages, ineffective audits etc. 2) Low revenue base => mainly from state and rural substitution and property and other taxes => stagnation at (17). 3) Lack of participatory budget management, as opposed to TN Janata system of 50000.

only 2 are active. Reforms to Effectiveness: Local Efficiency => Local Outcomes, Outlays Effectiveness. 1) Capacity building of the PPIs due to actual fiscal power to undertake capital asset development. 2) Functional autonomy from state govts. 3) Increased sourcing of fund utilisation => participatory democracy. 4) Handling of disaster management at local level. 5) Extension of govt. district delivery like health, edu etc. For actual realisation of principle of subsidiarity, the fiscal autonomy of PRIs are important.