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Fiscal Decentralization to the local organizations

Finance is the key in the management of local organizations. Potential local

governments can finance public services to meet the demands and needs of the
people in the region. Creating new forms of public services or innovations in public
services are to improve the quality of public services. Capability in finance is an

important aspect of the local government to provide relevant public services to
restructure qualities of local life. A strong financial status among local governments
represents the success of fiscal decentralization. Local governments with the

potential have to include strong fiscal management and financial independence. It
means local governments have local sovereignty to find their own sources of
revenues and free from dependence on subsidies from the central government.

Fiscal decentralization to local governments by the Constitution of the
Kingdom of Thailand, 2540 B.E and the Constitution of the Kingdom of Thailand
2550 B.E, contributes more financial sources to local governments resulting in

fiscal or revenue increase. Most of the revenues in local governments come from
the central government’s collection and subsidies. Local governments’ revenue
collection was quite low compared to the total in the year 2008-2013, less than

20 %. It means that the local revenues cannot create fiscal self-reliance among
local governments and they continue to rely on the central government’s subsidies.
Local governments lack freedom in finance due to the subsidy’s purposes

controlled by the central government and the funding amount is not sufficient to
local development.