Panchayati Raj is the system of local self-government in rural India, constitutionalized to ensure grassroots participation in economic development and social justice. While the concept of “Gram Swaraj” was advocated by Mahatma Gandhi, the formal structure evolved through various committees post-independence.
- Balwant Rai Mehta Committee (1957): Recommended a three-tier system and pioneered the concept of “Democratic Decentralization.”
- Ashok Mehta Committee (1977): Suggested a two-tier model and advocated for the participation of political parties.
- G.V.K. Rao Committee (1985): Highlighted the “bureaucratization” of development and recommended making the Panchayat the pivot of rural planning.
- L.M. Singhvi Committee (1986): Recommended constitutional status for PRIs to ensure regular elections and financial viability.
The 73rd Constitutional Amendment Act, 1992
This landmark act added Part IX to the Constitution and the Eleventh Schedule, which contains 29 functional items for Panchayats.
- Three-Tier Structure: Mandates a Gram Panchayat (village), Panchayat Samiti (intermediate), and Zila Parishad (district). States with a population below 20 lakhs may skip the intermediate tier.
- Gram Sabha: The foundation of the system, consisting of all registered voters in the village. It acts as the “Social Audit” body for development works.
- Reservation of Seats: Mandates 1/3rd reservation for women; reservation for SC/STs is in proportion to their population.
- State Finance Commission (SFC): Constituted every five years to review the financial position of PRIs and recommend the distribution of taxes between the State and Panchayats.
- State Election Commission: Responsible for the autonomous conduct of elections every five years.
Functional Devolution: The 11th Schedule (Key Subjects)
The 29 subjects devolved to PRIs focus on economic development and social equity. Key areas include:
- Agriculture and Land Reforms: Extension services, soil conservation, and land improvement.
- Water Management: Minor irrigation, water harvesting, and watershed development.
- Social Infrastructure: Education (primary/secondary), health and sanitation, and women/child development.
- Poverty Alleviation: Implementation of MGNREGA, PMAY-G, and NRLM at the village level.
- Utilities: Rural electrification, drinking water, and maintenance of community assets.
PRIs and Rural Economic Development
Panchayats act as the primary implementing agencies for most Centrally Sponsored Schemes (CSS).
- Decentralized Planning: The Gram Panchayat Development Plan (GPDP) allows villages to identify local needs and prioritize expenditure, ensuring “Bottom-Up” planning.
- Resource Mobilization: PRIs have the power to levy certain taxes (property tax, profession tax) and fees (market/mela fees). However, they remain largely dependent on “Central and State Finance Commission Grants.”
- Panchayat Empowerment Accountability Incentive Scheme (PEAIS): A central scheme to incentivize states to devolve “3Fs”—Functions, Funds, and Functionaries—to the PRIs.
Significant Initiatives for Digital and Transparent Governance
| Initiative | Objective/Feature |
| e-GramSwaraj Portal | A single interface to prepare and monitor GPDPs; brings transparency to decentralized planning and accounting. |
| AuditOnline | Facilitates online audit of Panchayat accounts to ensure financial accountability. |
| SVAMITVA Scheme | Uses drone technology to map rural inhabited lands, providing “Property Cards” to villagers for leveraging assets for loans. |
| Panchayat Awards | Annual awards like the Deen Dayal Upadhyay Panchayat Sashaktikaran Puraskar to recognize best-performing PRIs. |
PESA Act, 1996: Extension to Scheduled Areas
The Provisions of the Panchayats (Extension to Scheduled Areas) Act allows the tribal population in Fifth Schedule areas to govern themselves through traditional Gram Sabhas.
- Ownership of Minor Forest Produce (MFP): Gram Sabhas have ownership rights over MFPs.
- Mandatory Consultation: Prior consultation is required for land acquisition and rehabilitation of displaced persons in these areas.
- Control over Social Sector: Power to control institutions and functionaries in social sectors and local plans.
Challenges in PRI Functioning
- Financial Dependency: Nearly 95% of Panchayat revenue comes from transfers (grants) rather than their own tax revenue, limiting their autonomy.
- Sarpanch-Pati Culture: Despite 33% (or 50% in some states) reservation, the actual power is often exercised by the male relatives of elected women representatives.
- Lack of Technical Staff: Many Gram Panchayats lack dedicated secretaries, junior engineers, or data entry operators to manage digital portals and complex schemes.
- Incomplete Devolution: Several states have not fully transferred the 29 subjects, leading to functional overlaps between the state bureaucracy and elected representatives.
Important Facts for UPSC Prelims
- National Panchayati Raj Day: Celebrated on April 24th every year, marking the day the 73rd Amendment came into force in 1993.
- Article 40: A Directive Principle of State Policy (DPSP) that directs the State to organize village panchayats.
- First State to Adopt: Rajasthan (Nagaur district) was the first state to adopt the Panchayati Raj system on October 2, 1959.
- 15th Finance Commission: Recommended a total grant of ₹6.07 lakh crore for rural local bodies for the period 2021-26, categorized into Tied Grants (for sanitation/water) and Untied Grants (for local priorities).
- Vibrant Gram Sabha Dashboard: A real-time monitoring tool to track the meetings and attendance of Gram Sabhas across the country.