New Delhi: A gram panchayat in Maharashtra clocked a 307% surge in tax collection in FY25 and used its own revenue to set up a computer lab in government schools. Another, located in a flood prone area, doubled its revenue, which it deployed towards creating flood mitigation and irrigation facilities. A third generated ₹1.27 crore in own source revenue (OSR) through toll gate auction while a fourth raised its revenue by 76% in the last fiscal year and helped ensure full female digital literacy.
These are among many gram panchayats (GPs) across the country pushing to turn a new leaf - from total reliance on government funding to finding their own feet and financing neglected local requirements. Many, in fact, have been shortlisted for the soon-to-be-announced National Aatmanirbhar Special Panchayat Award, which will be conferred upon GPs that strengthen OSR, digital governance and sustainable asset utilisation - steps towards achieving financial self-reliance and citizen centric governance at the third tier.
The big nudge came most recently from the 16th Finance Commission that held out an impressive 84% rise in grants for rural local bodies or GPs at ₹4,35, 235 crore but with a catch. It has tied a massive chunk of the funding - ₹43,524 crore - to panchayats' raising their own revenue or OSR. This is quite a challenge for most panchayats, given it is both politically and locally tricky - revenue raising would mean initiating tax collection.
But Vasambe Panchayat ensconced in the scenic Western Ghats of Maharashtra has shown it is achievable. Factor this, the small GP - home to 26,220 people - managed to nudge the populace to a taxation regime, increasing tax collections to ₹2.45 crore in FY25 from ₹60.3 lakh in FY24, adding ₹1.6 crore in property tax collection and ₹56 lakh worth water charges.
Non-tax revenue, arising from licences and certificates as well as rent from panchayat properties, rose to ₹1.26 crore from ₹27.36 lakh - a staggering 362%. It went a step ahead and sought and got CSR funding as well - BPCL installed 19 solar high mast lights and 220 solar street lights in the area - a ₹5 crore investment in clean energy. The fund flow helped Vasambe even set up a 'digital school' or a computer lab in government school.
Belle gram panchayat in Udupi, Karnataka, on the other hand posted a 108% year-on-year increase in tax revenue, collecting ₹45.62 lakh in property tax alone - achieving 100% digital tax collection in the process. It mobilised ₹1.51 crore in voluntary community contributions for capital infrastructure, generated ₹9.38 lakh in non-tax revenue through scientific, traditional sand mining, and went on to allocate 35% of its own revenue towards local employment generation.
The panchayat area - often at the receiving end of flood fury from the Papanashini stream - was faced with several challenges enroute - from agricultural land getting devastated to lack of untied capital funds required to independently build critical, high-cost public infrastructure. It launched a special drive to physically re-measure all properties, secure permits for traditional sand mining and critical mining, crowd sourced and reached out to the village diaspora to help bridge the infrastructure deficit. Ultimately, several civil society groups helped fund the panchayats in building a new crematorium, supporting health care, and even lake development.
At Bijoynagar gram panchayat in Tripura, OSR increased by 77% to ₹6,46,742 in FY25 from ₹3,63,319 in FY24, which is expected to grow by 83% this fiscal year. The panchayat invested most of this revenue towards ensuring full female digital literacy through ward-wise training programmes.
In Kadirur, Kerala, the panchayat raised ₹67.9 lakh in property tax, ₹25.48 lakh in advertisement tax, over ₹5 lakh in water and sanitation tax, besides increasing its non-tax revenue by over ₹5 lakh.
Kanipakam GP in Chittoor district of Andhra Pradesh generated ₹1.27 crore OSR through toll gate auction last fiscal year, mobilised ₹25.14 lakh from weekly market revenues and local economic activities, and collected ₹2.47 lakh from shopping complex rentals.
Padur in Tamil Nadu is now fully computerised with 29 online services delivered to the public on time. Tax collection, building approvals, salaries, bill payments are done entirely online. High on OSR, the panchayat has also undertaken activities such as mushroom cultivation, herbal garden, and five-year RO water system among others.
These are among many gram panchayats (GPs) across the country pushing to turn a new leaf - from total reliance on government funding to finding their own feet and financing neglected local requirements. Many, in fact, have been shortlisted for the soon-to-be-announced National Aatmanirbhar Special Panchayat Award, which will be conferred upon GPs that strengthen OSR, digital governance and sustainable asset utilisation - steps towards achieving financial self-reliance and citizen centric governance at the third tier.
The big nudge came most recently from the 16th Finance Commission that held out an impressive 84% rise in grants for rural local bodies or GPs at ₹4,35, 235 crore but with a catch. It has tied a massive chunk of the funding - ₹43,524 crore - to panchayats' raising their own revenue or OSR. This is quite a challenge for most panchayats, given it is both politically and locally tricky - revenue raising would mean initiating tax collection.
But Vasambe Panchayat ensconced in the scenic Western Ghats of Maharashtra has shown it is achievable. Factor this, the small GP - home to 26,220 people - managed to nudge the populace to a taxation regime, increasing tax collections to ₹2.45 crore in FY25 from ₹60.3 lakh in FY24, adding ₹1.6 crore in property tax collection and ₹56 lakh worth water charges.
Non-tax revenue, arising from licences and certificates as well as rent from panchayat properties, rose to ₹1.26 crore from ₹27.36 lakh - a staggering 362%. It went a step ahead and sought and got CSR funding as well - BPCL installed 19 solar high mast lights and 220 solar street lights in the area - a ₹5 crore investment in clean energy. The fund flow helped Vasambe even set up a 'digital school' or a computer lab in government school.
Belle gram panchayat in Udupi, Karnataka, on the other hand posted a 108% year-on-year increase in tax revenue, collecting ₹45.62 lakh in property tax alone - achieving 100% digital tax collection in the process. It mobilised ₹1.51 crore in voluntary community contributions for capital infrastructure, generated ₹9.38 lakh in non-tax revenue through scientific, traditional sand mining, and went on to allocate 35% of its own revenue towards local employment generation.
The panchayat area - often at the receiving end of flood fury from the Papanashini stream - was faced with several challenges enroute - from agricultural land getting devastated to lack of untied capital funds required to independently build critical, high-cost public infrastructure. It launched a special drive to physically re-measure all properties, secure permits for traditional sand mining and critical mining, crowd sourced and reached out to the village diaspora to help bridge the infrastructure deficit. Ultimately, several civil society groups helped fund the panchayats in building a new crematorium, supporting health care, and even lake development.
At Bijoynagar gram panchayat in Tripura, OSR increased by 77% to ₹6,46,742 in FY25 from ₹3,63,319 in FY24, which is expected to grow by 83% this fiscal year. The panchayat invested most of this revenue towards ensuring full female digital literacy through ward-wise training programmes.
In Kadirur, Kerala, the panchayat raised ₹67.9 lakh in property tax, ₹25.48 lakh in advertisement tax, over ₹5 lakh in water and sanitation tax, besides increasing its non-tax revenue by over ₹5 lakh.
Kanipakam GP in Chittoor district of Andhra Pradesh generated ₹1.27 crore OSR through toll gate auction last fiscal year, mobilised ₹25.14 lakh from weekly market revenues and local economic activities, and collected ₹2.47 lakh from shopping complex rentals.
Padur in Tamil Nadu is now fully computerised with 29 online services delivered to the public on time. Tax collection, building approvals, salaries, bill payments are done entirely online. High on OSR, the panchayat has also undertaken activities such as mushroom cultivation, herbal garden, and five-year RO water system among others.
