MANGALURU: Southern India has emerged as a national leader in local revenue mobilisation, with Karnataka, Kerala, Andhra Pradesh, Telangana, and Tamil Nadu together accounting for over 60 percent of the ₹25,595 crore Own Source Revenue (OSR) collected by Gram Panchayats across the country between 2017-18 and 2021-22.
Karnataka stood out with a total OSR collection of ₹3,137 crore and a per capita figure of ₹148 well above the national average of ₹59. Kerala led among major states with ₹286 per capita, followed by Andhra Pradesh (₹209), Telangana (₹159), and Tamil Nadu (₹109), underscoring the southern dominance in grassroots fiscal performance. Odisha, in contrast, recorded an average OSR of just ₹42.09 crore and a per capita figure of ₹11, placing it among the lowest-performing states despite its large rural population.
According to a report presented in the Lok Sabha on 29 July by the Ministry of Panchayati Raj, Karnataka ranked 7th among 30 States and Union Territories in per capita revenue mobilisation by Panchayati Raj Institutions (PRIs). The state has shown consistent year-on-year growth in OSR: ₹385.94 crore in 2017-18, ₹552.86 crore in 2018-19, ₹671.37 crore in 2019-20, ₹715.41 crore in 2020-21, and ₹812.21 crore in 2021-22 — a notable trend toward fiscal self-reliance at the grassroots.
At the national level, Gram Panchayats across 30 States and UTs collectively generated ₹25,595 crore in OSR over five years, equating to a modest per capita annual figure of ₹59. Gujarat collected ₹4,118.99 crore with a per capita OSR of ₹199, placing it in the top five states. West Bengal generated ₹2,175.83 crore, but with a lower per capita OSR of ₹57.
There are stark disparities across states. Goa led with a per capita OSR of ₹1,635, followed by Puducherry (₹757), Kerala (₹286), Andhra Pradesh (₹209), and Gujarat (₹199). In contrast, large and populous states such as Uttar Pradesh (₹13), Madhya Pradesh (₹15), and Rajasthan (₹9) remained at the bottom. Nagaland reported zero OSR, while Mizoram and Himachal Pradesh recorded just ₹1, followed by Manipur and Jharkhand at ₹2.
The Expert Committee on OSR of Rural Local Bodies, formed in 2022 by the Ministry, highlighted the systemic challenges restricting local revenue growth, including outdated OSR regulations, inadequate devolution of taxing powers, weak collection infrastructure, political reluctance, and low compliance.
To address these, the central government is implementing a multi-pronged strategy. The revamped Rashtriya Gram Swaraj Abhiyan (RGSA) aims to enhance the financial and governance capacity of Panchayats. Specialised OSR training modules, developed in collaboration with IIM-Ahmedabad, are being rolled out through State-Level Master Trainers. Initiatives like the Atma Nirbhar Panchayat Special Awards (ANPSA) and the digital SAMARTH Panchayat Portal are also being promoted to improve transparency and efficiency in local revenue systems. A committee is currently drafting Model OSR Rules to guide states in reforming their frameworks.