Santhanam Committee: 1963

The Balwant Rai Mehta Committee was followed by the Santhanam Committee. This committee was formed by the Government of India to solve the following important practical questions.
How and in what ratio, the revenues should be handed over to PRIs?
What should be the criteria of sanction of grants to them by State Government.
What should be the status of the Financial Relations between the different levels of PRIs?

So, in a nutshell, the Santhanam Committee’s scope of study was the financial matters of the PRIs. The important recommendations this committee made are as follows:

The Panchayati Raj Finance Corporations should be established.
All the grants at the state level should be sent in a consolidated form to various PRIs.
Panchayats should have power to levy special tax which should be based upon the land revenue and house tax etc. Panchayati Raj Institutions should be composed of elected representatives and should enjoy enough autonomy and freedom.
The Balwant Rai Mehta committee recommended a 3-tier Panchayati Raj System which includes.
Zila Parishad at the District Level, Panchayat Samiti at the Block/ Tehsil/ Taluka Level, Gram Panchayat at the Village Level.
We see that Santhanam Committee gave some practical recommendations to matters of financial relevance. There was one more major issue of implementation of PRIs. This was – what should be the point of decentralization? Should it be a Tehsil / Taluka/ block or a District? If it is a district, then what would be the relevancy of the middle tier of Panchayat Samitees? If it is to be a tehsil / Taluka/ block, then how the effective decentralization can take place looking at vastness of the country?.
Two more committees viz. the Ashok Mehta committee on Panchayati Raj institutions and the G.V.K. Rao committee on administrative arrangements for rural development and poverty alleviation programmes supported that “district” is the most appropriate point for effective point of decentralization.