Fiscal Performance of Panchayati Raj Institutions (PRIs): An Empirical Analysis Of the State of Andhra Pradesh In Pre and Post-bifurcation Period

Abstract

The effectiveness of democratic decentralisation depends on the financial strength and independence of the local bodies. Financial autonomy is vital to reap the full potential benefits of decentralisation as the transfer of funds, functions, and functionaries will enable local bodies to be institutes of self -governance and not just delivery mechanisms. In the context of persistent fiscal distress across the local bodies, an attempt is made to empirically examine the fiscal performance of Panchayati Raj Institutions (PRIs) in Andhra Pradesh during 2010-11 to 2017-18, i.e. pre- and post-bifurcation periods of the State. The fiscal autonomy and the revenue dependency of PRIs across all three tiers in the State during the same period was also analysed. The study finds that the fiscal autonomy of top tiers, i.e. Mandal Praja Parishads (MPPs) and Zilla Praja Parishads (ZPPs) is negligible in both periods, while Gram Panchayats showed relatively better fiscal autonomy in both periods.