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Panchayati Raj Institutions

Context: A landmark law on Panchayati Raj institutions that came into effect on April 24, 1993, marks its 30 year anniversary.

Panchayati Raj Institutions

  • The Panchayati Raj Institution (PRI) is a system of rural local self-government in India, which involves the management of local affairs by elected local bodies.
  • It aims to build democracy at the grassroots level and promote rural development in the country.
  • Since its constitutionalization through the 73rd Constitutional Amendment Act in 1992, PRI has been in existence for over 3 decades.


The history of Panchayat Raj in India can be classified into various periods:

  • Vedic Era:
    • During the Vedic Era, the term “Panchayatan” referred to a group of five individuals that included a spiritual leader, but the inclusion of such a person gradually diminished.
    • The Rigveda mentions Sabha, Samiti, and Vidatha as local self-governing bodies, which functioned as democratic units at the grassroots level.
    • The king sought approval from these bodies for certain decisions and actions.
  • Epic Era (period of the Ramayana and Mahabharata):
    • The Ramayana mentions that the administration was divided into two parts: Pur (city) and Janpad (village).
      • Additionally, there was a Caste Panchayat in every state, and one member elected by the Caste Panchayat was included in the king’s Council of Ministers.
    • The concept of self-governance in a village is mentioned in the ‘Shanti Parva’ of the Mahabharata, as well as in Manu Smriti and Kautilya’s Arthashastra.
      • According to the Mahabharata, there were units of 10, 20, 100, and 1,000 village groups above the village level.
      • The head official of a village was called the ‘Gramik’, and the chief of ten villages was called ‘Dashap’.
      • The chiefs of 20, 100, and 1,000 villages were known as Vinshya Adhipati, Shat Gram Adhyaksha, and Shat Gram Pati, respectively.
      • These officials were responsible for collecting local taxes and defending their villages.
  • Ancient Era:
    • During the Ancient Period, local self-governance was well-established in India.
    • The town was called Pur and was governed by a Nagarik.
    • Local bodies functioned independently, without interference from the monarchy.
    • The headman, aided by a council of elders, continued to hold a prominent position in village life during the Mauryan, Post-Mauryan, and Gupta periods, although there were some changes in the official titles.
  • Medieval Era:
    • In the medieval period, the Sultans of Delhi divided their kingdom into provinces called ‘Vilayat’.
    • The governance of a village was managed by three important officials – Mukkaddam for administration, Patwari for revenue collection, and Choudhrie for dispute settlement with the help of the Panch.
    • The villages had sufficient power for self-governance in their territory. However, the caste system and feudalistic mode of governance under the Mughal rule gradually weakened the concept of self-government in villages.
    • Women’s participation in the local village administration was absent even during the medieval period.
  • British Era: The British regime weakened the village panchayats in India. However, some initiatives were taken to sustain and restore local self-governing institutions in India which include:
    • The Regulation of 1816: conferred judicial authority to the village panchayats in a few provinces. Under this Regulation, the Panchayats under the Madres Presidency were allowed to try cases if both the parties agreed to submit the dispute to the panchayat.
    • Lord Mayo’s resolution of 1870: gave impetus to the development of local institutions by enlarging their powers and responsibilities.
    • Bengal Village Chowkidary Act, 1870: empowered the District Magistrate to constitute a panchayat in any village if majority of the adult male residents apply in writing to the District Magistrate to constitute a panchayat in such village.
    • The Resolution on Local Self Government 1882: It was Lord Ripon’s Resolution that intended to build local self-government institutions on the foundations of the local self-government system of ancient India and he designed them as an instrument of political and popular education.
    • Morley Minto Reforms of 1909 incorporated the recommendations of Royal Commission on Decentralization (1907) which led to the enlargement of the election process in the Local Self Government structure in India.
    • Montagu Chelmsford reforms of 1919: Introduced a dyarchy system where responsibility of the local government was given to ministers and the ministers enacted a number of laws to revive the Panchayati raj institutions.
      • Village Panchayat Act was also passed and made the panchayats a legal body.
      • It established the village panchayat in many parts of the country and this continued up to 1940.
  • Post-Independence Era:
    • ​​The post-independence period in India saw the inclusion of panchayats in the Constitution under Article 40 and the empowerment of state legislatures to legislate on matters relating to local self-government under Article 246.
    • However, there was disagreement among decision-makers, including B.R. Ambedkar, regarding the inclusion of panchayats in the Constitution.
    • As a result, the Directive Principles of State Policy included Article 40, which was not binding and did not lead to a uniform structure of panchayats throughout the country.
    • Community Development Programme:  To promote rural development, India launched the Community Development Programme (CDP) in 1952 with the participation of village panchayats.
      • However, the CDP failed due to factors such as bureaucracy, lack of people’s participation, and lack of interest from local bodies, including panchayats.
    • Balwant Rai Mehta Committee: The committee recommended a three-tier system of Panchayati Raj Institutions (PRIs) consisting of Grama Panchayats, Panchayat Samiti, and Zilla Parishad to promote democratic decentralization.
    • Ashok Mehta Committee 1977: The committee led to new thinking on the concept and practice of Panchayati Raj. The committee recommended a two-tier structure consisting of Zilla Parishad and Mandal Panchayat.
    • G.V.K Rao and L.M. Singhvi Committees: The G.V.K. Rao Committee recommended making the district the basic unit of planning and holding regular elections, while the L.M. Singhvi Committee recommended providing more financial resources and constitutional status to the panchayats.
    • 73rd and 74th CAA: The Constitution (72nd Amendment) Bill, introduced during the Prime Ministership of P.V. Narasimha Rao in 1991, was a comprehensive amendment seeking to strengthen PRIs.
      • The Constitution (73rd Amendment) Act and the Constitution (74th Amendment) Act were passed by Parliament in 1992, introducing local self-governance in rural and urban India.
      • These acts came into force in 1993.

73rd Constitutional Amendment Act of 1992

Features of the Act:

  • A 3-tier system of Panchayati Raj for all States having a population of over 20 lakh (Article 243B). The Panchayats have been established in each state through acts of the respective states.
  • Seats at all levels to be filled by direct elections (Article 243C (2).
  • Panchayat elections to be held regularly every 5 years. In the event of dissolution, elections compulsorily within six months (Article 243E).
  • Reservation of seats for Scheduled Castes, Scheduled Tribes and women (not less than one third of seats).
  • The seats are to be reserved for SCs and STs in proportion to their population at each level. Out of the Reserved Seats, 1/3rd have to be reserved for the women of the SC and ST. Out of the total number of seats to be filled by the direct elections, 1/3rd have to be reserved for women (Article 243D).
  • Panchayats to prepare plans for economic development and social justice in respect of subjects as devolved by law to the various levels of Panchayats including the subjects as illustrated in Eleventh Schedule (Article 243G).
  • Appointment of State Finance Commission to make recommendations as regards the financial powers of the Panchayats.

Significance of PRIs:

  1. Political Consciousness: The PRIs have enabled a large number of people, especially women, to acquire leadership at the local level. This is because one-third of seats are reserved for women candidates. Thus, the PRIs have played a critical role in raising political consciousness among the masses.
  2. Strengthening Democratic Institutions and Processes: The experience gained by the new generation of leadership in democratic management has raised the quality of legislative debates and working of higher level institutions. PRIs provide opportunities for the circulation of political elite, which is essential for maintaining democratic forms in their true spirit.
  3. Planning and Development: PRIs have contributed significantly as units of planning and development at the district and lower levels. In several states such as Maharashtra, Karnataka, and West Bengal, local level planning has been successfully formulated and implemented by these institutions.
  4. Giving Voice to Local Demands: PRIs have become the connecting link between the Parliament and State Legislature on the one hand and local bodies on the other. The local members talk about the local needs, urgencies, and difficulties in implementation, whereas the members of Parliament and State Legislature can explain possible solutions. This two-way link has served the dual purpose of modifying state policies at the point of maladjustment and communicating the message from the centre and/or state to the remote corners of rural society.
  5. Executive Institution: PRIs carry out certain civic functions such as rural sanitation, public health, street lighting, drinking water supply, maintenance of village roads, culverts, and management of primary and secondary education.
  6. Breaking Hierarchies: PRIs have become a powerful tool where caste and local interests interact, clash, compromise, and arrive at a common understanding on various issues. Thus, they play a crucial role in breaking hierarchies and promoting social justice.

Challenges Faced by Panchayati Raj Institutions:

  • Insufficient Devolution of Power: While local government is a state subject, certain states have not devolved important subjects like fuel and fodder, non-conventional energy sources, rural electrification, non-formal education, small scale industries, technical training, and vocational education to PRIs. This limits their scope of work and effectiveness.
  • Inadequate Grants and Funds: PRIs face financial constraints as the transfers made through State Finance Commissions are often meagre. Most GPs are also reluctant to raise their own sources of revenue, resulting in a lack of funds for carrying out their activities.
  • Persistence of Patriarchal Attitudes: The issue of “Sarpanch Pati” or male relatives of female village heads wielding power and controlling decision-making processes continues to persist due to gender biases, women’s illiteracy, and patriarchal attitudes in society.
  • Infrastructural Deficiencies: Some Gram Panchayats do not have their own buildings or lack basic facilities like toilets, drinking water, and electricity. Internet connections are also non-functional in many cases, causing delays in data entry and other processes.
  • Lack of Support Staff: PRIs suffer from a severe lack of support staff, such as secretaries, junior engineers, computer operators, and data entry operators. This affects their functioning and delivery of services.
  • Lack of Convergence of Government Programmes: There is a lack of coordination and convergence among various development programmes of the Centre and state governments. Different guidelines by different departments hinder the convergence of activities, resulting in a lack of synergy and duplication of efforts.

Way Forward

2nd ARC Recommendations for Strengthening Rural Governance:

The 2nd ARC recommends:

  1. Appropriate size of Gram Panchayats: Wherever there are large Gram Panchayats, Ward Sabhas should be constituted to exercise certain powers and functions of the Gram Sabha and the Gram Panchayat.
  2. Power to recruit personnel: Panchayats should have the power to recruit personnel and regulate their service conditions subject to the laws and standards laid down by the State Government.
  3. Abolish budget approval by higher authorities: The provisions in some State Acts regarding the approval of the budget of a Panchayat by the higher tier or any other State authority should be abolished.
  4. Local Ombudsman to investigate and recommend action: The powers to investigate and recommend action against elected representatives on the grounds of abuse of office, corruption, etc. should not lie with the State Government but with the local Ombudsman, who will send his report through the Lokayukta to the Governor.
  5. Comprehensive activity mapping: States, with the help of a Task force must undertake comprehensive activity mapping of all the matters mentioned in the Eleventh Schedule, covering all aspects of planning, budgeting, and provisioning of finances.
  6. Broadening and deepening of the revenue base: A comprehensive exercise should be undertaken regarding the broadening and deepening of the revenue base of local governments, which should look into four major aspects of resource mobilization, fixation of realistic tax rates, widening of the tax base, and improved collection.
  7. Untied funds for Panchayati Raj Institutions: Except for the specifically tied, major Centrally Sponsored Schemes and special purpose programs of the States, all other allocations to the Panchayati Raj Institutions should be in the form of untied funds.
  8. Timely release of funds: State Governments should release funds to the Panchayats in such a manner that these institutions get adequate time to use the allocation during the year itself. The fund release could be in the form of equally spaced installments. It could be done in two installments; one at the beginning of the financial year and the other by the end of September of that year.
  9. Encouragement for borrowing from financial institutions: For their infrastructure needs, the Panchayats should be encouraged to borrow from banks/financial institutions, and the role of the State Government should remain confined only to fixing the limits of borrowing.

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