Evaluating the recommendations of the Thirteenth Finance Commission with reference to panchayati raj institutions and urban local bodies and their implications for genuine fiscal federalism in India, this paper finds data related to local governments across states and over time to be wanting in many respects. Yet, as broad aggregates, they help throw some light on the magnitudes and trends in expenditure and own source revenue of the third tier from 2002-03 to 2007-08. It concludes that the commission’s sins aside, it has in some ways departed significantly from the past and made suggestions that could strengthen democratic decentralisation if they are fully implemented.