New Delhi, Aug. 19 -- Poverty and squalor dominate the popular perception of a typical Indian village. But there are some villages, particularly in the country's western and southern states, that generate humongous amounts of money due to their proximity to large cities, showing a marked divergence in development from their counterparts in other parts of India.

While the own source of revenue (OSR) for Indian gram panchayats (village councils) average around Rs.2.3 lakh a year, there are panchayats that are able to raise own source of revenue upwards of Rs.10 crore a year from property tax, water charges, market fees, trade licence fees and building permits in western and southern states.

The Neraluru gram panchayat in Bengaluru, for in...