The Indian parliament passed the 73rd constitutional amendment in the year 1992, which give a decentralized system of governance at the local level. As a result of these constitutional amendments, changes were made in the institutional set up of local governments in Kerala. One among them is financial decentralization. The only tier of government which gives financial powers to raise revenue from their source is gram panchayat. The present paper intends to diagnose the financial aspects and issues in their revenue mobilization of Gram Panchayats in Kerala. The findings from the study reveal that though powers and functions have been deolved to the panchayat, their dependence in the external sources continues. This clearly shows that panchayats have not taken steps to mobilize resources on, their own to reduce external dependence.
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Keywords: Rural Local Governments, Decentralization, State Finance Commission.
