Panchayati Raj and the 73rd Amendment
Panchayati Raj in India represents the vibrant system of rural local self-government, aimed at nurturing democracy right at the grassroots level. Established across all states through dedicated acts passed by their legislatures, it empowers these institutions to spearhead rural development initiatives. This framework received full constitutional backing with the 73rd Constitutional Amendment Act, 1992, ensuring its enduring role in India's decentralized governance.
Balwant Rai Mehta Committee
In January 1957, the Government of India formed the Balwant Rai Mehta Committee, chaired by Balwant Rai G. Mehta, to review the effectiveness of the Community Development Programme (launched in 1952) and the National Extension Service (introduced in 1953). These initiatives aimed to foster rural development through grassroots participation, but their implementation needed refinement. The committee submitted its influential report in November 1957, advocating a system of democratic decentralisationâa framework that evolved into the iconic Panchayati Raj structure.
At the heart of the recommendations was a three-tier system organically linked through indirect elections: gram panchayats at the village level, directly elected by locals; panchayat samitis at the block level; and zila parishads at the district level, both indirectly elected. These bodies would handle all planning and development activities, with panchayat samitis serving as the primary executive arm and zila parishads providing advisory, coordinating, and supervisory oversight. The district collector would chair the zila parishad to ensure administrative integration. Crucially, the committee stressed a genuine transfer of power and responsibility to these institutions, backed by adequate financial resources. It also called for mechanisms to enable further devolution of authority over time.
The National Development Council endorsed these ideas in January 1958, embracing flexibility by allowing states to adapt the model to local conditions while adhering to core principles of decentralised democracy. Rajasthan led the way, inaugurating Panchayati Raj on 2 October 1959 in Nagaur district, with Prime Minister Jawaharlal Nehru presiding. Andhra Pradesh followed suit later that year, and by the mid-1960s, most states had established similar institutions.
Yet, implementation varied widely. While Rajasthan embraced the three-tier model, Tamil Nadu opted for two tiers, and West Bengal introduced a four-tier setup. Power dynamics differed too: in the Rajasthan-Andhra pattern, the panchayat samiti held sway as the key unit for planning and development at the block level, whereas in Maharashtra and Gujarat, the zila parishad dominated with the district as the focal point. Some states, like Rajasthan, also created nyaya panchayatsâjudicial bodies to adjudicate minor civil and criminal disputesâfurther enriching local governance. These adaptations highlighted the system's resilience, tailoring national ideals to regional realities.
Evolution of Panchayati Raj: Key Study Teams and Committees
Since 1960, numerous study teams, committees, and working groups have scrutinized the functioning of India's Panchayati Raj system, offering vital insights into its challenges and reforms. These are cataloged in Table 38.1 for reference.
A landmark effort came in December 1977, when the Janata Government constituted the Ashok Mehta Committee to revitalize the ailing Panchayati Raj institutions. Chaired by Ashok Mehta, the committee submitted its comprehensive report in August 1978, outlining 132 recommendations to breathe new life into the system.
At its core, the committee advocated dismantling the traditional three-tier structure in favor of a leaner two-tier model: the zila parishad at the district level and, beneath it, the mandal panchayat covering clusters of villages with a population of 15,000 to 20,000. It positioned the district as the primary unit of decentralization under popular oversight, below the state level, with the zila parishad serving as the executive body responsible for district-level planning. To ensure vibrancy, the committee urged official participation of political parties in all panchayat elections and granted these institutions compulsory taxation powers to generate their own resources.
Accountability was another priority. The panel recommended regular social audits by a district-level agency and a committee of legislators to verify that funds reached vulnerable social and economic groups. It firmly opposed state government supersession of panchayats, insisting that if unavoidable, elections must follow within six months. Judicial functions warranted separation: nyaya panchayats, presided over by qualified judges, should operate distinctly from development-oriented panchayats. Elections themselves would fall under the stateâs chief electoral officer, in consultation with the Chief Election Commissioner.
Development responsibilities should shift entirely to the zila parishad, with all related staff under its control. The committee also emphasized the role of voluntary agencies in rallying public support and proposed appointing a dedicated minister for Panchayati Raj in each stateâs council of ministers. Representation required strengthening through population-based reservations for Scheduled Castes (SCs) and Scheduled Tribes (STs). Above all, it called for constitutional recognition of these institutions, granting them enduring sanctity, stature, and operational security.
The Janata Government's premature collapse prevented central-level implementation. Yet, states like Karnataka, West Bengal, and Andhra Pradesh drew inspiration from the report, enacting measures to reinvigorate their Panchayati Raj frameworks.
G.V.K. Rao Committee on Decentralization
In 1985, the Planning Commission appointed the G.V.K. Rao Committee, chaired by G.V.K. Rao, to review administrative arrangements for rural development and poverty alleviation programs. The committee's analysis revealed a troubling trend: the developmental process had become increasingly bureaucratized, detached from the Panchayati Raj institutions (PRIs). This shift toward bureaucratization, rather than democratization, had eroded PRIs, leading to the poignant description of "grass without roots"âa system strong at the top but rootless at the grassroots.
To revitalize PRIs, the committee proposed a series of targeted recommendations. It emphasized the Zila Parishad at the district level as the cornerstone of democratic decentralization, declaring the district the ideal unit for planning and development. The Zila Parishad, it argued, should serve as the primary body for managing all programs feasible at that scale. PRIs at district and lower levels would gain significant responsibilities in planning, implementing, and monitoring rural development initiatives. To enable genuine decentralization, certain state-level planning functions should shift to district planning units. The committee also advocated creating a District Development Commissioner position, with this officer acting as the Zila Parishad's chief executive and overseeing all district-level development departments. Finally, it stressed the need for regular elections to PRIs, noting that in 11 states, polls were overdue for one or more tiers.
These proposals positioned PRIs at the forefront of a decentralized field administration, particularly in local planning and development. This approach marked a key departure from earlier reports, such as the Dantwala Committee on Block-Level Planning (1978) and the Hanumantha Rao Committee on District Planning (1984). While both prior committees endorsed district-level planning as foundational, they envisioned separate planning bodies led by the District Collector or a minister, with the Collector coordinating all activities and PRIs playing only a supportive role. In contrast, the G.V.K. Rao Committee sought to diminish the Collector's developmental dominance, aligning instead with the spirit of the Balwantray Mehta Committee, the Administrative Reforms Commission, and the Ashok Mehta Committee by empowering PRIs as central players in development administration.
Singhvi Committee: Panchayati Raj Reforms
In 1986, the Rajiv Gandhi government constituted a high-level committee under the chairmanship of L.M. Singhvi to prepare a concept paper on the Revitalisation of Panchayati Raj Institutions for Democracy and Development. This panel played a pivotal role in advocating systemic reforms to strengthen local self-governance, laying the groundwork for future constitutional changes.
The committee's most transformative recommendation was to grant Panchayati Raj Institutions explicit constitutional recognition by inserting a dedicated chapter into the Constitution of India. This would safeguard their identity and autonomy against arbitrary interference, while mandating regular, free, and fair elections to these bodies. To enhance judicial access at the grassroots, it proposed establishing Nyaya Panchayats to serve clusters of villages, handling minor disputes effectively. Complementing this, the committee urged the reorganization of villages into more viable and functional Gram Panchayats. It placed special emphasis on the Gram Sabha, hailing it as the true embodiment of direct democracy and the foundational forum for village-level participation.
Further strengthening these institutions, the Singhvi Committee called for bolstering the financial resources of village panchayats to enable meaningful development work. Finally, it recommended setting up independent judicial tribunals in each state to resolve disputes related to elections, dissolutions, and the overall functioning of Panchayati Raj bodies, ensuring accountability and stability.
The Thungon Committee: Revitalizing Panchayati Raj
In 1988, a sub-committee of Parliament's Consultative Committee, chaired by P.K. Thungon, was established to scrutinize the political and administrative framework at the district level, with a focus on enhancing district planning. The committee's pivotal recommendation was to fortify the Panchayati Raj system, laying the groundwork for its constitutional empowerment and operational efficiency through a series of targeted reforms.
At its core, the committee advocated for the constitutional recognition of Panchayati Raj institutions, proposing a robust three-tier structure encompassing panchayats at the village, block, and district levels. The Zilla Parishad, as the district-level body, would serve as the central hub, functioning as the primary agency for planning and development in the district. To ensure stability, these bodies should enjoy a fixed tenure of five years, with any supersession limited to a maximum of six months.
The committee also emphasized coordinated planning beyond the district. It suggested establishing a state-level planning and coordination committee, chaired by the minister for planning and including presidents of Zilla Parishads as members. Furthermore, it called for a detailed enumeration of subjects assigned to Panchayati Raj institutions, to be enshrined directly in the Constitution, alongside population-based reservations of seats across all three tiers, with additional quotas for women.
Financial autonomy formed another cornerstone of the recommendations. Each state should constitute a State Finance Commission to determine criteria and guidelines for devolving funds to Panchayati Raj bodies. Executionally, the district collector would act as the chief executive officer of the Zilla Parishad, bridging administrative expertise with local governance. These measures collectively aimed to transform Panchayati Raj from a peripheral structure into a dynamic pillar of decentralized democracy.
Gadgil Committee Recommendations for Panchayati Raj
In 1988, the Congress party established the Gadgil Committeeâformally known as the Committee on Policy and Programmesâunder the chairmanship of V.N. Gadgil. Tasked with exploring ways to strengthen Panchayati Raj institutions (PRIs), the committee delivered a set of transformative recommendations that laid the groundwork for their empowerment.
At its core, the committee advocated granting constitutional status to PRIs, establishing a uniform three-tier structure at the village, block, and district levels. It proposed a fixed five-year term for these bodies, with members at all levels elected directly by the people to ensure democratic accountability. To promote inclusivity, it recommended reservations for Scheduled Castes (SCs), Scheduled Tribes (STs), and women, reflecting a commitment to social justice.
Beyond structure, the committee emphasized functional autonomy. PRIs should take responsibility for preparing and implementing socioeconomic development plans, backed by a constitutionally specified list of subjects. To fund these efforts, they ought to gain powers to levy, collect, and retain taxes and duties. Supporting this financial independence, the committee called for the creation of a State Finance Commission to recommend resource allocation and a State Election Commission to oversee free and fair panchayat elections.
These far-reaching suggestions directly inspired the drafting of a constitutional amendment bill, which ultimately conferred statutory protection and status on PRIs, marking a pivotal step in India's decentralized governance.
1989 Bid to Constitutionalize Panchayats
In 1989, the Rajiv Gandhi government took a bold step toward decentralizing power by introducing the 64th Constitutional Amendment Bill in the Lok Sabha in July. The bill sought to grant constitutional status to panchayati raj institutionsâthe foundational structures of rural local self-governanceâwhile making them more robust, inclusive, and effective.
The measure sailed through the Lok Sabha in August, but its momentum stalled in the Rajya Sabha, where it was decisively rejected. Opposition parties mounted fierce resistance, arguing that the provisions would erode India's federal structure by tilting authority toward the Centre and curtailing state autonomy.
V.P. Singh Government and Panchayati Raj Reforms
In November 1989, the National Front government, headed by Prime Minister V.P. Singh, wasted no time in prioritizing the revitalization of Panchayati Raj institutionsâthe foundational pillars of rural self-governance in India. This commitment marked a significant push toward decentralizing power to the grassroots level.
To build consensus, Prime Minister Singh chaired a two-day conference of state chief ministers in June 1990, where leaders deliberated on concrete measures to empower these local bodies. The gathering unanimously approved proposals for a new constitutional amendment bill, paving the way for structural reforms.
Acting swiftly, the government introduced the bill in the Lok Sabha in September 1990. Tragically, political instability led to the government's downfall, causing the bill to lapse without further progressâa setback that underscored the fragility of coalition politics in advancing enduring institutional change.
Narasimha Rao Government and Panchayati Raj
Under the leadership of Prime Minister P.V. Narasimha Rao, the Congress government revived the long-standing push to grant constitutional status to Panchayati Raj institutionsâIndia's rural local self-government bodies. Learning from past controversies, the government thoroughly revised earlier proposals, stripping away contentious elements to build broader consensus. In September 1991, it introduced a streamlined constitutional amendment bill in the Lok Sabha. This effort culminated in the historic 73rd Constitutional Amendment Act, 1992, which received presidential assent and came into force on 24 April 1993, fundamentally strengthening grassroots democracy across the country.
Significance of the Act
The 73rd Constitutional Amendment Act marked a transformative moment by introducing Part IX to the Constitution of India, titled âThe Panchayatsâ. This new part encompasses Articles 243 to 243O, laying down a comprehensive framework for these institutions. Complementing this, the Act appended the Eleventh Schedule, which lists 29 key functional subjectsâranging from agriculture to rural electrificationâover which panchayats hold authority, as outlined in Article 243G.
At its core, the Act breathes life into Article 40 of the Constitution, a Directive Principle of State Policy that mandates the organization of village panchayats and endows them with powers to function as true units of self-government. By doing so, it elevates Panchayati Raj Institutions (PRIs) from mere administrative bodies to entities with firm constitutional backing. These provisions are now justiciable, imposing a binding obligation on state governments to implement the new system. No longer subject to the discretionary whims of state authorities, the establishment of panchayats and the conduct of regular elections have become enforceable constitutional imperatives.
The Act's provisions smartly balance uniformity with flexibility, dividing them into compulsory and voluntary categories. Mandatory elementsâsuch as the structure of three-tier panchayats, direct elections, reservations for marginalized groups, and state finance commissionsâmust be incorporated into state laws. Voluntary provisions, however, allow states the leeway to adapt based on local realities, including geographical, political, and administrative nuances. This design respects India's federal ethos while ensuring grassroots governance takes root.
Ultimately, the Act stands as a milestone in India's democratic journey, shifting the paradigm from representative to participatory democracy. By institutionalizing power at the village level, it fosters a revolutionary model of bottom-up governance, empowering millions to shape their own futures.
Salient Features of the Act
A cornerstone of the Act is the Gram Sabha, which forms the foundational pillar of India's Panchayati Raj system. Comprising all persons registered in the electoral rolls of a village falling within a panchayat's jurisdiction, it functions as a true village assembly of every eligible voter at the grassroots level. The Gram Sabha wields powers and discharges functions at the village level, as defined by the state legislature, ensuring direct democratic participation in local governance.
The Three-Tier Panchayati Raj Structure
The 73rd Constitutional Amendment Act introduces a uniform three-tier system of Panchayati Raj across every state in India, comprising Panchayats at the village, intermediate, and district levels. This standardized framework fosters consistency in local self-governance nationwide, marking a pivotal step toward decentralized democracy. Notably, states with a population of 20 lakh or less enjoy flexibility and may forgo the intermediate tier.
Election of Members and Chairpersons
In the Panchayati Raj system, all members of panchayatsâwhether at the village, intermediate, or district levelâare elected directly by the people, ensuring grassroots democracy at its core. Chairpersons at the intermediate and district levels, however, are chosen indirectly by and from among these elected members, fostering leadership from within the elected body. For village-level panchayats, the method of electing the chairperson remains flexible, left to the discretion of the state legislature to suit local needs.
Both chairpersons and other members, regardless of whether they were elected directly or indirectly, enjoy full voting rights in panchayat meetings, guaranteeing that every voice contributes to collective decision-making.
Panchayat Reservations under 73rd Amendment
The 73rd Constitutional Amendment Act mandates reservation of seats for Scheduled Castes (SCs) and Scheduled Tribes (STs) in every panchayatâacross all three levelsâin proportion to their share of the total population in the panchayat area. Additionally, state legislatures must reserve the offices of chairpersons at the village level or any other tier for SCs and STs, ensuring proportional representation in leadership roles.
To promote gender equity, the Act requires that not less than one-third of the total seats in panchayatsâincluding those already reserved for SC and ST womenâbe set aside for women. This extends to the offices of chairpersons, where at least one-third must also be reserved for women at each level, fostering greater female participation in local governance.
State legislatures have the flexibility to provide further reservations for seats or chairperson positions in favor of Other Backward Classes (OBCs), allowing customization to address regional social dynamics.
These reservations for SCs and STs in both seats and chairperson offices are temporary, ceasing after the period outlined in Article 334 of the Constitutionâcurrently set at 70 years, expiring in 2020. Notably, provisions for SC seat reservations do not apply to Arunachal Pradesh, a state populated entirely by indigenous tribal communities with no Scheduled Castes. This exemption was incorporated later through the 83rd Constitutional Amendment Act of 2000.
Duration of Panchayats
The 73rd Constitutional Amendment Act establishes a uniform five-year term for panchayats at every level, from village to district. This provides stability while allowing for accountability through periodic elections. However, a panchayat may be dissolved prematurely if it fails to perform its duties or due to other administrative reasons.
In such cases, fresh elections must be held promptly to reconstitute the panchayat. Specifically, elections are required either before the original five-year term expires or, in the event of dissolution, within six months from the date of dissolution. This ensures minimal disruption in local governance.
There is a practical exception: if the remaining term of the dissolved panchayat is less than six months, no new elections are necessary for that brief period. This avoids the inefficiency of conducting polls for an insignificantly short tenure.
Importantly, any panchayat reconstituted after an early dissolution does not receive a fresh five-year term. Instead, it serves only for the unexpired portion of the original panchayat's tenure. This rule reinforces the fixed five-year cycle, preventing extended or overlapping mandates and upholding the democratic rhythm of local self-government.
Disqualifications for Panchayat Membership
Under the constitutional framework governing Panchayats, a person is disqualified from being elected or serving as a member if they fall foul of specific legal grounds. These include disqualification under any prevailing law applicable to elections for the state legislature, or under any law enacted by the state legislature itself.
A key exception applies to the age criterion: no one is disqualified merely for being under 25 years old, provided they have reached the age of 21. This provision ensures broader eligibility while maintaining essential standards.
Finally, any disputes over disqualification are adjudicated by an authority designated by the state legislature, providing a structured mechanism for resolution.
State Election Commission
The State Election Commission holds the critical responsibility for the superintendence, direction, and control over the preparation of electoral rolls and the conduct of all elections to panchayatsâthe foundational institutions of rural local self-government. This independent body ensures free and fair elections at the grassroots level, mirroring the Election Commission's role at the national and state levels but tailored specifically for panchayat polls.
Comprising a single State Election Commissioner, the commission is appointed by the Governor, who also determines the commissioner's conditions of service and tenure. To safeguard its autonomy, the commissioner cannot be removed except through the same rigorous process and grounds applicable to a judge of the state High Court. Furthermore, once appointed, the commissioner's service conditions cannot be altered to their disadvantage, providing stability and protection from political interference. The state legislature, for its part, has the authority to enact laws governing all other aspects of panchayat elections, creating a balanced framework between constitutional mandate and legislative flexibility.
Powers and Functions of Panchayats
State legislatures play a pivotal role in empowering Panchayats by granting them the powers and authority essential for functioning as true institutions of self-government. Through a comprehensive devolution scheme, they delegate responsibilities to Panchayats at the appropriate tierâvillage, intermediate, or district level. This delegation focuses on two key domains: first, preparing plans for economic development and social justice; and second, implementing schemes entrusted to them in these areas, especially those linked to the 29 subjects enumerated in the Eleventh Schedule of the Constitution. This structured approach ensures Panchayats actively drive grassroots governance, aligning local initiatives with broader developmental goals.
Panchayat Finances
The state legislature plays a pivotal role in empowering Panchayats financially, granting them the autonomy to manage local revenues effectively. It may authorize Panchayats to directly levy, collect, and appropriate taxes, duties, tolls, and fees, fostering self-reliance at the grassroots level. Furthermore, the legislature can assign to Panchayats specific taxes, duties, tolls, and fees that it has levied and collected itself, channeling state resources downward. To bolster their operations, it provides for grants-in-aid drawn from the Consolidated Fund of the state. Lastly, the legislature ensures sound financial management by constituting dedicated funds into which all Panchayat moneysârevenues, grants, and assignmentsâare credited. This structured approach, enshrined in the Constitution, balances local initiative with state oversight.
State Finance Commission for Panchayats
Every five years, the Governor of a state must constitute a Finance Commission to thoroughly review the financial health of the panchayats. This body plays a pivotal role in ensuring fiscal decentralization by offering targeted recommendations to the Governor on key aspects of resource sharing and augmentation.
Primarily, the Commission advises on the principles governing the distribution of the net proceeds from taxes, duties, tolls, and fees levied by the state. This includes equitable allocation between the state and panchayats at all levels, as well as the assignment of specific taxes, duties, tolls, or fees directly to panchayats. It also outlines the framework for grants-in-aid drawn from the state's Consolidated Fund to support panchayat operations. Beyond these, the Commission suggests practical measures to strengthen the overall financial position of panchayats and addresses any additional matters referred by the Governor, all aimed at promoting sound fiscal management at the grassroots level.
The state legislature holds authority over the Commission's composition, including the qualifications of its members and the process for their selection. Once finalized, the Governor is required to lay the Commission's recommendations, along with an action-taken report, before the state legislature for scrutiny and debate.
Complementing this structure, the Central Finance Commission steps in by recommending ways to bolster a state's Consolidated Fund, thereby enabling it to better supplement panchayat resources. These suggestions are informed by the findings and recommendations of the respective state Finance Commission, ensuring a coordinated national approach to local fiscal empowerment.
Audit of Accounts
To ensure financial accountability at the grassroots level, state legislatures are empowered to enact laws governing the maintenance of accounts by panchayats and the auditing of such accounts. This provision grants states the flexibility to tailor auditing mechanisms to local needs, reinforcing transparency and oversight in rural self-governance under the constitutional framework of Panchayati Raj.
Application to Union Territories
The constitutional provisions in this Part fully extend to all Union Territories, ensuring a baseline framework for their governance. However, the President retains discretionary power to tailor their application to any particular Union Territory. Through a simple directive, the President may introduce necessary exceptions or modifications, adapting the rules to the unique administrative needs of that territory. This flexibility underscores the Centre's oversight while accommodating regional variations.
Exempted States and Areas
The 73rd Constitutional Amendment Act, which introduced Part IX on Panchayats, carves out key exemptions to respect the unique socio-cultural and administrative fabric of certain regions. It does not apply to the states of Nagaland, Meghalaya, and Mizoram in their entirety. Beyond these, specific areas within other states remain outside its purview, including scheduled areas and tribal areas; the hill areas of Manipur served by district councils; and the Darjeeling district of West Bengal, governed by the Darjeeling Gorkha Hill Council.
That said, Parliament retains the flexibility to extend these provisions to scheduled and tribal areas, with any necessary exceptions or modifications. Exercising this authority, it enacted the Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996âcommonly known as the PESA Act or Extension Actâwhich tailors Panchayati Raj institutions to empower tribal self-governance while aligning with constitutional goals.
Transitional Provisions of 73rd Amendment
The 73rd Constitutional Amendment Act, which came into force on 24 April 1993, ensured a smooth transition to the new Panchayati Raj framework by allowing existing state laws on panchayats to remain operational for up to one year. This provision gave state governments a clear deadlineâby 24 April 1994 at the latestâto align their legislation with the constitutional mandates, fostering a structured shift without abrupt disruptions.
In parallel, all panchayats already in place before the Act's commencement continued to function until their designated terms ended, unless the state legislature dissolved them earlier. This dual safeguard maintained administrative continuity while paving the way for reform. As a result, most states swiftly responded by enacting fresh Panchayati Raj Acts in 1993 and 1994, fully integrating the Amendment's vision of decentralized governance.
Bar to Interference by Courts in Electoral Matters
To safeguard the electoral process of panchayats from judicial disruptions, the Act imposes a clear prohibition on court interference. Courts cannot entertain challenges to the validity of any law governing the delimitation of constituencies or the allocation of seats to those constituencies. Instead, disputes over panchayat elections must be resolved exclusively through election petitions, filed before the designated authority and in the precise manner prescribed by the state legislature. This provision ensures electoral stability while channeling all grievances into a structured, legislative framework.
Eleventh Schedule: Panchayati Raj Functions
The Eleventh Schedule of the Indian Constitution empowers Panchayati Raj Institutions by entrusting them with 29 key functional areas essential for rural development and local governance. Introduced through constitutional amendments to decentralize power to the grassroots level, this schedule places a diverse array of responsibilities squarely within the purview of panchayats, enabling them to address the unique needs of village communities.
At the core of these powers lie agriculture and land-related activities. Panchayats oversee agriculture, including extension services; land improvement, the implementation of land reforms, consolidation, and soil conservation; minor irrigation, water management, and watershed development; social forestry and farm forestry; and minor forest produce.
Animal resources also fall under their domain, encompassing animal husbandry, dairying, and poultry, as well as fisheries. To foster economic self-reliance, panchayats promote small-scale industries (including food processing), khadi, village, and cottage industries.
Basic infrastructure and amenities form another vital cluster. This includes rural housing; drinking water; fuel and fodder; roads, culverts, bridges, ferries, waterways, and other communication means; rural electrification (including electricity distribution); and non-conventional energy sources.
Social welfare initiatives are equally prioritized, starting with poverty alleviation programs. Education receives comprehensive attention through primary and secondary schools, technical training and vocational education, adult and non-formal education, and libraries. Panchayats also nurture cultural activities and manage markets and fairs.
Health and family welfare round out these responsibilities, covering health and sanitation (including hospitals, primary health centers, and dispensaries), family welfare, women and child development, and social welfare for the handicapped and mentally retarded. Special emphasis is placed on the welfare of weaker sections, particularly Scheduled Castes and Scheduled Tribes, alongside the public distribution system and the maintenance of community assets.
Together, these subjects equip panchayats to drive holistic rural progress, bridging the gap between policy and local action.
Compulsory and Voluntary Provisions: Part IX
To appreciate the structure of the 73rd Constitutional Amendment Act, 1992âwhich introduced Part IX of the Constitutionâit is essential to distinguish its provisions into two clear categories: compulsory (mandatory or obligatory) ones, which must be implemented, and voluntary (discretionary or optional) ones, which states may adopt at their discretion. Let us examine these separately.
Compulsory Provisions of the 73rd Constitutional Amendment
The 73rd Constitutional Amendment Act, 1992, mandates several binding provisions that states must incorporate into their Panchayati Raj laws to decentralize power to the grassroots level. At the heart of this framework is the organization of the Gram Sabhaâcomprising all adult voters in a village or group of villagesâwhich serves as the foundational deliberative body. Above it, states must establish panchayats at three tiers: the village (or gram panchayat), intermediate (block or mandal), and district levels, ensuring structured local governance across rural India.
Elections form the cornerstone of democratic legitimacy in these institutions. All seats at every levelâfrom village to districtâare filled through direct elections, while chairpersons at the intermediate and district levels are chosen indirectly by elected members. Every directly or indirectly elected chairperson and member enjoys voting rights in their respective panchayats. To broaden participation, the minimum age for contesting elections is fixed at 21 years. Reservations further promote inclusivity: seats for members and chairpersons are proportionately reserved for Scheduled Castes (SCs) and Scheduled Tribes (STs) at all three levels, with an additional one-third reservation for women in both categories across the board.
To ensure stability and accountability, panchayats at all levels have a uniform five-year tenure, and in cases of supersession or dissolution, fresh elections must be held within six months. Supporting these bodies are independent institutions: a State Election Commission conducts all panchayat elections with fairness and regularity, while a State Finance Commission, constituted every five years, reviews the financial health of panchayats and recommends resource devolution from state coffers. These provisions collectively empower rural self-governance, making Panchayati Raj a constitutional imperative rather than an option.
B. Voluntary Provisions
The 73rd Constitutional Amendment Act leaves considerable flexibility to state legislatures through its voluntary provisions, allowing them to tailor the Panchayati Raj framework to local needs. At the grassroots level, states may endow the Gram Sabha with specific powers and functions, while also determining the process for electing the chairperson of the village panchayat. This foundational autonomy ensures that village-level governance remains responsive and participatory.
To foster vertical integration across tiers, states have the option to provide representation for chairpersons of village panchayats in intermediate panchayatsâor directly in district panchayats if the state lacks an intermediate tier. Similarly, chairpersons of intermediate panchayats can be given seats in district panchayats. Elected representatives from higher levels, including Members of Parliament (from both Houses) and state legislatures (from both Houses), may also secure representation in the panchayats within their constituencies, bridging national, state, and local governance.
States can further strengthen inclusivity and self-governance by reserving seats for members and chairpersons from backward classes at any panchayat level. They may grant panchayats the authority to function as true institutions of self-government, including the devolution of powers to prepare plans for economic development and social justice. This extends to enabling panchayats to handle some or all of the 29 functions outlined in the Eleventh Schedule, such as agriculture, rural housing, and drinking water.
Financial empowerment forms another key pillar of these provisions. States can authorize panchayats to levy, collect, and retain taxes, duties, tolls, and fees; assign to them the proceeds of such levies collected by the state government; provide grants-in-aid from the state's consolidated fund; and establish dedicated funds to manage all panchayat revenues. Together, these measures enable states to build robust, financially independent local bodies capable of driving sustainable rural development.
PESA Act: Panchayats in Scheduled Areas
The Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996âcommonly known as the PESA Act or Extension Actâbridges a critical gap in India's constitutional framework for local governance. Part IX of the Constitution, which empowers Panchayats as institutions of self-government, does not extend by default to the tribal-dominated regions designated under the Fifth Schedule. Parliament, however, retains the flexibility to apply these provisions to such areas, tailoring them with appropriate exceptions and modifications as needed. In 1996, it invoked this authority to enact the PESA Act, ensuring that Panchayati Raj institutions could take root in these sensitive zones while respecting their unique socio-cultural fabric.
By 2019, ten states hosted Fifth Schedule Areas: Andhra Pradesh, Telangana, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan. Remarkably, all have risen to the occasion by amending their respective Panchayati Raj Acts, thereby enacting the necessary compliance measures to operationalize the PESA Act's vision of empowered grassroots democracy.
Objectives of the **PESA Act
Enacted in 1996, the Panchayats (Extension to Scheduled Areas) Act (PESA Act) seeks to empower tribal communities by adapting India's Panchayati Raj framework to their unique needs. At its core, the Act extends the provisions of Part IX of the Constitutionâgoverning panchayatsâto Scheduled Areas, but with tailored modifications that respect local realities. This extension lays the foundation for genuine self-rule among the bulk of India's tribal population, fostering autonomous governance at the grassroots level.
Central to PESA's vision is participatory democracy through the gram sabha, which serves as the nucleus of village-level decision-making and all socio-economic activities. The Act promotes an administrative structure aligned with traditional tribal practices, safeguarding their customs and cultural heritage from erosion. It strategically empowers panchayats at appropriate tiers with authority suited to tribal priorities, such as land management and resource control, while explicitly barring higher-level panchayats from encroaching on the gram sabha's powers. Through these measures, PESA strikes a balance between constitutional decentralization and indigenous self-determination, ensuring that tribal voices shape their own development.
Key Features of the **PESA Act
The Panchayats (Extension to Scheduled Areas) Act, 1996 (PESA Act) seeks to extend Panchayati Raj institutions to Scheduled Areas while respecting tribal traditions. State legislation governing Panchayats in these areas must align with local customary laws, social and religious practices, and traditional community resource management. A "village" is typically defined as a single habitation, group of habitations, hamlet, or cluster of hamlets that functions as a cohesive community under its own traditions and customs.
At the heart of PESA lies the Gram Sabha, comprising all persons listed in the electoral rolls for the village-level Panchayat. This body holds broad authority to protect community traditions, cultural identity, collective resources, and traditional dispute resolution methods. It must approve all social and economic development plans, programs, and projects before implementation by the village Panchayat and identify beneficiaries for poverty alleviation schemes. Village Panchayats, in turn, require Gram Sabha certification to confirm proper utilization of funds for these initiatives.
Reservations in Panchayats within Scheduled Areas are proportionate to the population of communities eligible under Part IX of the Constitution, with Scheduled Tribes (STs) guaranteed at least half of all seats. All Chairperson positions at every Panchayat level are reserved exclusively for STs. Where STs lack representation at intermediate or district levels, state governments may nominate them, limited to no more than one-tenth of total elected seats.
PESA mandates consultation with the Gram Sabha or relevant Panchayat before acquiring land for development projects in Scheduled Areas or resettling affected persons there, though state-level coordination handles actual planning and execution. Management of minor water bodies falls to appropriate-level Panchayats. Similarly, Gram Sabha or Panchayat recommendations are obligatory for granting prospecting licenses, mining leases, or auction concessions for minor minerals.
To function as true self-governing institutions, Panchayats and Gram Sabhas in Scheduled Areas receive specific powers, including enforcing prohibition or regulating intoxicant sales; owning minor forest produce; preventing land alienation and restoring unlawfully transferred ST lands; managing village markets; controlling money lending to STs; overseeing social sector institutions and functionaries; and directing local plans and resources, including tribal sub-plans.
State laws must include safeguards to prevent higher-level Panchayats from usurping powers of lower Panchayats or Gram Sabhas. Administrative structures at the district level should mirror the Sixth Schedule to the Constitution. Finally, any conflicting state law on Panchayats in Scheduled Areas ceases to operate one year after Presidential assent to PESA, though existing Panchayats continue until their term ends or earlier dissolution by the state legislature.
Finances of Panchayati Raj
The Second Administrative Reforms Commission (2005â2009) provided a comprehensive overview of the revenue sources for Panchayati Raj Institutions (PRIs) and the persistent financial challenges they face. While Part IX of the Constitution focuses extensively on empowering PRIs structurally, their true autonomy and effectiveness hinge on financial independence, particularly their ability to generate own resources. In practice, panchayats across India rely on several key funding streams: grants from the Union Government recommended by the Central Finance Commission under Article 280; devolutions from state governments based on State Finance Commission recommendations as per Article 243-I; loans and grants directly from state governments; programme-specific allocations under Centrally Sponsored Schemes and Additional Central Assistance; and, crucially, internal resource generation through taxes and non-tax revenues.
Despite these provisions, states have historically devoted insufficient attention to the fiscal empowerment of panchayats, resulting in meager own resources even in progressive states like Kerala, Karnataka, and Tamil Nadu. There, panchayats remain heavily reliant on government grants. Drawing from nationwide patterns, several stark realities emerge. Internal revenue generation at the panchayat level remains weak, stemming from a limited tax base and the institutions' own hesitancy to collect dues rigorously. Panchayats depend overwhelmingly on tied grants from Union and state governments, which come with little discretion over spending. Cash-strapped states, in turn, show reluctance to devolve funds meaningfully. For vital functions listed in the Eleventh Scheduleâsuch as primary education, healthcare, water supply, sanitation, and minor irrigationâstate governments often retain direct implementation control and bear the expenditure. The outcome is a troubling mismatch: panchayats shoulder significant responsibilities but lack commensurate resources.
Beyond mere funding volumes, a panchayat's financial health rests on its capacity for own resource mobilization, which transcends economics to foster democratic accountability. A robust local taxation system not only sustains operations but also draws citizens into the governance fold, holding elected bodies answerable to their communities. In this regard, Gram Panchayats enjoy a relative advantage, possessing a dedicated tax domain, whereas intermediate and district panchayats must rely solely on tolls, fees, and non-tax revenues.
State Panchayati Raj Acts typically vest most taxation powers with village panchayats, assigning intermediate and district tiers a narrower domain focused on secondary activities. These include ferry services, markets, water and conservancy services, vehicle registration, and cess on stamp duty, among others. A review of state legislations reveals that village panchayats command an array of taxes, duties, tolls, and fees. These encompass octroi, property or house tax, profession tax, land tax or cess, taxes or tolls on vehicles, entertainment tax or fees, license fees, tax on non-agricultural land, fees for cattle registration, sanitation, drainage, or conservancy tax, water rates or taxes, lighting rates or taxes, education cess, and taxes on fairs and festivals. Strengthening this fiscal foundation remains essential for PRIs to evolve from dependent entities into truly self-reliant pillars of local governance.
Reasons for the Suboptimal Performance of Panchayati Raj Institutions
Despite the constitutional recognition and safeguards provided by the 73rd Amendment Act (1992), Panchayati Raj Institutions (PRIs) have fallen short of expectations in delivering effective governance at the grassroots level. Several interconnected factors contribute to this underperformance, hindering their ability to fulfill the mandate of decentralized democracy.
A primary issue is the inadequate devolution of the 3Fsâfunctions, funds, and functionariesâto PRIs. Many states have failed to transfer the necessary powers, resources, and personnel, leaving these bodies unable to execute their constitutionally assigned roles. Even when State Finance Commissions (SFCs) submit recommendations to ensure fiscal viability, few states implement them meaningfully. Compounding this, funds allocated to PRIs are often "tied" to specific schemes, dictating activities that may not suit local needs across a district. This leads to mismatched projects, underutilization of budgets, or wasteful spending. Moreover, PRIs exhibit an overwhelming dependence on central and state government funding, with own-source revenues remaining negligible. Without generating local resources, panchayats rarely face pressure from communities to conduct social audits, further eroding accountability. Adding to these fiscal constraints, gram panchayats seldom exercise their devolved taxing powersâsuch as levying charges on property, businesses, markets, fairs, street lighting, or public toiletsâfearing backlash from their own constituents.
Bureaucratic overreach exacerbates these challenges. In several states, gram panchayats operate in subordination to block-level offices, forcing sarpanchesâelected representativesâto devote excessive time seeking funds or technical approvals. Such interactions undermine their leadership role and prioritize administrative hurdles over community service.
The potential of Gram Sabhas as tools for transparency, accountability, and inclusion of marginalized groups remains largely untapped. Many state acts fail to clearly define their powers, outline operational procedures, or impose penalties on officials who neglect them, rendering these village assemblies ineffective.
Parallel bodies, created ostensibly for faster implementation and better accountability, often undermine PRIs further. There is scant evidence that these entities escape pitfalls like partisan politics, corruption, elite capture, or unequal benefit-sharing. By bypassing mainstream programs with superior funding, they create institutional duality, alienate PRIs, and encroach on their legitimate domain, leading to demoralization.
Finally, infrastructural deficits and capacity gaps cripple PRI functionality. A significant number of gram panchayats lack full-time secretaries, basic office buildings, or databases for planning and monitoringâaround 25 percent operate without proper facilities. Elected representatives, many of whom are semi-literate, receive inadequate, irregular training on their roles, programs, procedures, and systems, impairing their performance. While district and intermediate panchayats are typically computerized, only about 20 percent of gram panchayats have computing access, and some states provide none at all. These shortcomings collectively stifle the promise of empowered local governance.