Where Are Panchayats in Fiscal Federalism? The Missing Link
Recently, NK Singh, Chairman of the Fifteenth Finance Commission (FFC), raised concerns about the growing political culture of freebies and its impact on the macroeconomic stability of both the Centre and the States. While this is a critical observation, transforming this culture requires more than just central and state-level reforms. True cooperative federalism (CF) must empower citizens from the Ward Sabha to the Lok Sabha. Currently, the discourse on fiscal federalism rarely travels beyond the State level, leaving a massive gap where our Panchayati Raj Institutions (PRIs) should be. The Current State of Cooperative Federalism Under Article 243G of the Constitution, state legislatures are empowered to endow panchayats with the authority to function as institutions of self-government, particularly regarding the 29 subjects listed in the Eleventh Schedule. However, in practice, the spirit of cooperative federalism fails to embrace India’s 2.55 lakh panchayats. At present, we hav...