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Article 243H empowers State Legislatures to authorize Panchayats to levy, collect, and appropriate taxes such as property tax, profession tax, and ______ for local development and service delivery.
- customs duty
- tolls
- income tax
- corporate tax
Answer: tolls
Panchayat taxation powers: (a) Article 243H (73rd Amendment): Empowers State Legislatures to authorize Panchayats to levy, collect, appropriate: (i) Taxes: Property tax, profession tax, land revenue, (ii) Duties, tolls: Tolls on roads, bridges, markets under Panchayat jurisdiction, (iii) Fees: User charges for services (water, sanitation, market facilities), (b) Applications: (i) Local revenue: Panchayats use taxes, tolls, fees to fund local infrastructure, services (roads, water, sanitation), (ii) Fiscal autonomy: Own revenue sources reduce dependence on State grants, enhance Panchayat autonomy in planning, implementation, (iii) Accountability: Local taxation enhances accountability; citizens more likely to demand quality services when they pay taxes, (c) Challenges: (i) Limited tax base: Rural areas have low property values, economic activity, limiting Panchayat own revenue, (ii) Collection capacity: Panchayats lack staff, systems for efficient tax collection, enforcement, (iii) Political resistance: Local taxation may face resistance from voters, limiting Panchayat willingness to levy taxes, (d) Illustrates fiscal federalism: Article 243H provides framework for Panchayat taxation; effective devolution requires political will, capacity building, adequate revenue sources for local self-governance.