Challenges in Local Budgeting and Planning: Field Realities in Rural Karnataka


  • K. Basavarajeshwari Doctoral Scholar, Centre for Decentralisation and Development, Institute for Social and Economic Change, Dr V. K. R. V. Rao Road, Bangalore - 560072



Panchayats, Local Governments, Local Planning.


Local governments provide services that suit local tastes and preferences. The role of Panchayats (rural local governments in India) is to effectively provide services to the local people, wherein Panchayats are held responsible to manage finances effectively. Hence, the main objective of the paper is to study the budgeting and planning of rural local governments. How do they plan and manage finances to provide services effectively? Does participatory planning takes place or not and if yes to what extent it exists? These are the questions that this study tries to answer. By having a proper plan (otherwise will lead to wasteful expenditure) and consistent budget format, it will help Panchayats to compare better with other Panchayats, further helping in monitoring the plan and properly reviewing the budget details. Most importantly, participatory planning and budgeting will lead to accountability and transparency. Thus, efficient management of finances through participatory planning is important to yield a better outcome. The study is based on both primary and secondary data collected from four selected Gram Panchayats in two selected districts (namely, Ballari and Mandya districts) of Karnataka.


Download data is not yet available.




How to Cite

Basavarajeshwari, K. (2019). Challenges in Local Budgeting and Planning: Field Realities in Rural Karnataka. Journal of Rural Development, 38(2), 342–362.


Amy Ellen, S. (2005), "Flypaper Effect," In: C. Joseph J, E. Robert D., & J. Gravelle (Eds.), The Encyclopaedia of Taxation and Tax Policy (Second), Washington D. C.: The Urban Institute Press.

Aziz, A., Sivanna, N., Babu, M. D., Madhushree, S., & Charles, N. C. (2002), "Decentralised Governance and Planning: A Comparative Study in Three South Indian States," New Delhi: MaCmillan India Ltd.

Bauhr, M., & Marcia, G. (2012), "What is Transparency?: New Measures and Relevance for Quality of Government," (16). Gothenburg.

Boadway, R. (2007), "Grants in a Federal Economy: A Conceptual Perspective. In R. Boadway & A. Shah (Eds.)," Intergovernmental Transfers: Principles and Practice (pp. 55–74). Washington DC: the World Bank.

Buchannan, J. ., & Musgrave, R. (1999), "Public Finance and Public Choice: Two Contrasting Visions of the State," Massachusetts, Cambridge: MIT Press.

Business Encyclopaedia. (2017), "Budget and Budgeting and Variance Analysis," Retrieved June 12, 2017, from

Chand, S. (2008), Public Finance, Volume I, New Delhi: Atlantic Publishers and Distributors (P) Ltd.

Chathukulam, J. (2014), "Study to Asses the Actual Status of Devolution in the State of Karnataka,"(Centre for Rural Management CRM), Kerala.

Fenster, M. (2006), "The Opacity of Transparency," (Working paper series 16). (B. Monika & M. Grimes, Eds.). Gothenburg.

Folscher, A. (2007), "Participatory Budgeting in Asia, "In: Participatory Budgeting (pp. 157–189). Washington DC: the World Bank.

Gamkhar, S., & Shah, A. (2007), "The Impact of Intergovernmental Fiscal Transfers: A Sythesis of the Conceptual and Empirical Literature.,"In: B. Robin & S. Anwar (Eds.), Intergovernmental Fiscal Transfers: Principles and Practice, Washington D. C.: Public sector Governance and Accountabillity Series, The World Bank.

Geoffrey K, T. (1998), "The Overspending and Flypaper Effects of Fiscal Illusion: Theory and Empirical Evidence," Journal of Urban Economics, 44, 1–26.

Government of Karnataka (2016), "Budget & Account Manual of Panchayat Raj Institutions in Karnataka," New Delhi.

Grigorescu, A. (2003), "International Organizations and Government Transparency: Linking the International and Domestic Realms," International Studies Quarterly, 47(4), 643–667.

James R., H., & Richard H., T. (1995), "The Flypaper Effect," Journal of Economic Perspectives, 9(4).

Jhon, G. (2010), Participatory Budgeting in Porto Alegre (No. 85). Description, P., & Information, D. Porto Alegre.

King, D. (1984), "Fiscal Tiers: The Economics of Multi-level Government," London: George, Allen & Unwin.

Kornai, J. (1979), "Resource Constrained Versus Demand Constrained Systems," Econometrica, 47(4), 801–819.

Krenjova, J., & Raudla, R. (2013), "Participatory Budgeting at the Local Level: Challenges and Opportunities for New Democracies," Halduskultuur – Administrative Culture, 14(1), 18–46.

Neuman, L., & Richard Calland. (2007), "Making the Law Work: The Challenges of Implementation," In: F. Ann (Ed.), In: The Right to Know: Transparency for an Open World, New York: Columbia University Press.

Oates, W. E. (2005), "Towards a Second-Generation Theory of Fiscal Federalism," International Tax and Public Finance, 12(4).

Rajaraman, I., & Garima, V. (2000), "Impact of Grnats on Tax Effort of Local Government," Economic and Political Weekly, XXXV(30), 2943–2948.

Roberts, A. (2006), "Blacked Out: Government Secrecy in the Information Age," New York: Cambridge University Press.

Samuel, C. U., & I., W. U. (2009), "Problems and Prospects of Budgeting and Budget Implementation in Local Government System in Nigeria," African Journal of Business Management, 3(12), 836–846, Retrieved from

Schaeffer, M. (2003), Local Government Accountability: Challenges and Strategies.

Shah, A. (2006). "A Practitioner’s Guide to Intergovernmental Fiscal Transfers (No. 4039), Retrieved from

Stephen J., B., & Connolly, S. (1998), "The Flypaper Effect: Identifying Areas for Further Research," Public Choice, 95, 3–4.

Teresa, T. M. (1997), "Decentralisation and Macroeconomic Management, (T. M. Teresa, Ed.), "Fiscal Federalism in Theory and Practice, "Washington: International Monetary Fund, Retrieved from

Vigneault, M. (2007), "Grants and Soft Budget Constraints," In: B. Robin & A. Shah (Eds.), Intergovernmental Fiscal Transfers: Principles and Practice (pp. 133–171), Washington: the World Bank.

World Bank (2000), "Overview of Rural decentralisation in India," Washington D. C.

World Bank (2003), "Participatory Budgeting in Brazil," Washington DC., Retrieved from

Yilmaz, S. (2003), "Intergovernmental Transfers: Concepts and Policy Issues," In: "The Developing and Strengthening System of Intergovernmental Fiscal Relations and Fiscal Decentralization," Seoul, Korea: A Joint Conference of World Bank Institute and Korea Development Institute.

Similar Articles

1 2 3 > >> 

You may also start an advanced similarity search for this article.