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Local taxes and fees contributed only 1.1 per cent to Panchayats’ total revenue, according to a report by the Reserve Bank of India (RBI). Non-tax revenue, primarily from Panchayati Raj programmes and interest earnings, constituted 3.3 per cent of the total revenue receipts. States like Tamil Nadu, Himachal Pradesh, Maharashtra, and Telangana reported higher non-tax revenue than others, according to the RBI report on the Finances of Panchayati Raj Institutions. According to the report, the average revenue per Panchayat, encompassing taxes, non-taxes, and grants, was at 21.2 lakh in 2020-21, 23.2 lakh in 2021-22, and experienced a slight dip to 21.23 lakh in 2022-23. The average expenditure per Panchayat witnessed a decline from 17.3 lakh in 2020-21 to 12.5 lakh in 2022-23, attributed to elevated spending during the pandemic year. States like Goa, Karnataka, Odisha, Sikkim, Kerala, and Tamil Nadu recorded the highest average expenditure at the Panchayat level.
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