Union Territories & Panchayats
State law may authorise a Panchayat to levy and collect its own taxes/duties/tolls/fees; assign it a share of state-collected taxes; provide grants-in-aid from the state's Consolidated Fund; and establish dedicated Panchayat Funds for receiving and withdrawing money.
For Panchayats to function as genuine self-government (not just administrative outposts of the state), they need their own financial resources - this article lets states give Panchayats independent taxing power, a share of state revenue, and dedicated grant funding.
This is the basis for local property taxes, market fees, or similar levies that many Gram Panchayats are empowered to collect and spend on their own local priorities, rather than depending entirely on funds routed through the state government.