There is no standing national database on panchayat finances in India, which limits any meaningful analysis of the revenue effort of panchayats. Based on a field survey in the four states of Chhattisgarh, Madhya Pradesh, Rajasthan and Orissa, this paper studies the own revenue effort of rural local bodies within their statutorily defined revenue rights. The study finds that the assigned tax rights are not fully utilised by the panchayats and non-tax revenue is the dominant source of their own revenue. A comparison of own revenues of the panchayati raj institutions for 2005-06, based on the survey results with those reported by the Twelfth Finance Commission for 2002-03, shows a huge difference between the two sets in the case of per capita own tax in Madhya Pradesh and per capita own non-tax in Chhattisgarh.